Colin Grabow discusses the importance of balancing industry protection and free trade for national security. Strategies include deregulation, immigration reform, and collaboration with allies like Japan and South Korea to strengthen US manufacturing and address protectionism effects on the shipbuilding industry.
Free trade is vital for national security and should be prioritized over protectionism.
Government should focus on pro-market approaches to industry growth before resorting to immediate intervention.
Deep dives
The Role of Free Trade in National Security
Free trade, economic robustness, and strengthening trading ties are crucial elements in enhancing national security. While protectionism is often justified using national security concerns, experts like Colin Grebo argue that freedom to trade plays a significant role in national security. While some protectionist measures may have valid reasons related to national security, many are seen as overblown or used by politicians to push their agenda. It is essential to balance the need to maintain certain industries for national security with preventing the abuse of national security exceptions.
Promoting Industry Growth through Pro-Market Means
Before considering government interventions to support critical industries, efforts should focus on pro-market approaches to promote industry growth. Examples include deregulation to alleviate the regulatory burden on the economy, immigration reforms to provide access to skilled labor, elimination of tariffs on intermediate goods, and engaging in free trade agreements. These measures aim to support industry development and competitiveness without resorting to immediate government intervention.
Assessing the Effectiveness of Protectionism on Industry
Historical data and research suggest that protectionist measures, such as those seen in the Jones Act, often fail to achieve their intended goals of bolstering domestic industries like shipbuilding. Despite theoretical assumptions that protectionism promotes industry growth, evidence shows a decline in areas like US shipbuilding and shipping under such measures. The comparison with other leading manufacturing countries and the real-world outcomes highlight the limitations and shortcomings of protectionism in achieving a robust and competitive industry.
Protectionism is frequently justified on national security grounds, but there are strong reasons to liberalize trade in the name of American security, as well. Colin Grabow explains.