Baloney About Free Trade and Terrorism

For once, nobody’s talking economics, because international terrorism has everyone’s attention. Now terrorism itself isn’t my area of expertise, but I did want to quickly note that there’s considerable sophistry being spewed about connections between it and free trade.

 
 

Lie number one is that an open-borders world, which obviously has considerable connection to terrorists being able to move internationally and do what they do, is somehow the sine qua non of our prosperity and something we must not give up at any price.

 
 

That is utter nonsense. Yes, reasonably open movement of goods, businesspeople, tourists etc. is economically beneficial. But there is absolutely zero evidence that taking openness to extremes does any economic good. Effective border controls for security reasons would not impose a meaningful economic cost.

 
 

Indeed, given that terrorism (and ordinary international crime) imposes real economic costs of their own, not least the increased security expenses attendant upon having to chase threats inside the border when they are not stopped there, strong border controls may well cost less than zero, i.e. be net savers of money.

 
 

And you certainly don’t need open borders to have an integrated global economy. For example, Europe’s economy was highly integrated even before the Schengen Agreement removed border posts from a host of Northern European countries. (This is the agreement that is currently being rolled back.)

 
 

And how about Japan, China, Korea et cetera? Anyone who’s been there can attest to the strictness of their border controls. Are they exactly losing out in international trade? No. They’re doing very well, thank you, racking up trade surpluses while we stagnate.

 
 

So appropriate (I’m not advocating extremism in the other direction) border security doesn’t harm international commerce.

 
 

Lie number two is that free trade is somehow a way to fight terrorism. This nonsense goes back years. For example, just over a week after 9/11, U.S. Trade Representative Robert Zoellick used counter-terrorism as an argument for expanding presidential fast-track authority to negotiate trade agreements, in an editorial in the Washington Post: “Countering Terror With Trade,” September 20, 2001. See also, for example, Brink Lindsey, “The Trade Front: Combating Terrorism with Open Markets,” Cato Institute, August 5, 2003. There are other more-recent examples, and I’m sure there will be more.

 
 

But, as I wrote in my 2010 book Free Trade Doesn’t Work,

 
 

Attempts to link free trade to counter-terrorism don’t stand up, either. The U.S. is the world’s leading free trader, but somehow the world’s biggest terrorist target anyway. Free trade’s widespread global unpopularity combines with the perception that America is behind it to antagonize peoples and governments around the world as often as it rallies them to our side. Occasionally, free trade may bribe foreign governments to cooperate with the United States, but it also enriches nations, like Saudi Arabia and Venezuela, whose elites are knee-deep in funding terrorism and other international mischief. Hard-coding free trade as a legal obligation, as the WTO does, frustrates our ability to use trade concessions as leverage to win foreign cooperation against our enemies.

 
 

So please, everybody: let’s not exploit tragedy to push a free-trade agenda, or let fanaticism about free trade interfere with border security measures necessary for other reasons. Economics does not support either.

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