Press Release and Petition: 1 April 2009
The following press release was issued by the Free Market Foundation earlier today. If you would like to know more, or to sign the petition regarding free trade and the dangers of protectionism, visit here and click on “free trade petition”.
Freedom to Trade Coalition will hold G20 to account
The Freedom to Trade Coalition – comprising over 60 civil society organisations from 44 countries – launched an open letter calling on all governments to eliminate trade barriers.
Signatories include Nobel Prize winning economist Vernon Smith; former US Secretary of State George Schultz; former Prime Minister of Estonia Mart Laar MEP; former Finance Ministers of New Zealand (Ruth Richardson), Chile (Rolf Luders), Ukraine (Viktor Pynzenyk), and Poland (Leszek Balcerovicz); former Kremlin chief economist Andrei Illarionov; Indian businessman and author Gucharan Das; noted Chinese economists Xia Yeliang (Peking) and Mao Shoulong (Renmin); Alexander Graf Lamsdorff MEP; political scientist and author Francis Fukuyama, and many eminent economists, philosophers and other academics. In total, over 2000 people have so far signed the letter, including over 1000 academics.
Leon Louw, Executive Director of the Free Market Foundation said, “Protectionist tariffs introduced by the US Hoover administration in June 1930 sparked an international trade war. Not being able to sell into the US market, other countries were forced to cut back on US imports, which devastated American agriculture. Thousands of farmers went bankrupt; many rural banks failed, taking down hundreds of thousands of their customers. Instead of abandoning the tariffs, Hoover increased taxes to subsidise farmers. So the downward spiral of the Great Depression was exacerbated, later to be aided and abetted by the interventionist activities of Franklin Roosevelt, who took over in 1933. South Africa must not follow this path to economic destruction.”
Warning of the dangers of resurgent protectionism, the letter observes:
“Protectionism creates poverty, not prosperity. Protectionism doesn’t even “protect” domestic jobs or industries; it destroys them, by harming export industries and industries that rely on imports to make their goods. Raising the local prices of steel by “protecting” local steel companies just raises the cost of producing cars and the many other goods made with steel. Protectionism is a fool’s game.”
Moreover, mindful of the tragic consequences of the protectionism of the 1920s and 30s, which contributed to the Great Depression and to the poverty and nationalism that led to the Second World War, the letter observes that “Protectionism destroys peace.” By contrast:
“Trade promotes peace … by uniting different peoples in a common culture of commerce – a daily process of learning others’ languages, social norms, laws, expectations, wants, and talents … [and] by encouraging people to build bonds of mutually beneficial cooperation. Just as trade unites the economic interests of Paris and Lyon, of Boston and Seattle, of Calcutta and Mumbai, trade also unites the economic interests of Paris and Portland, of Boston and Berlin, of Calcutta and Copenhagen – of the peoples of all nations who trade with each other.”
The open letter is available at a new website which will feature news stories, exclusive webcasts, statements by signatories of the open letter, and many other items.
In addition, the Freedom to Trade Coalition has committed itself to monitoring the actions of governments around the world – and will challenge attempts to institute protectionist policies.
The Free Market Foundation’s website
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