Protectionism: the wolf in sheep's clothing


beansBritain's leading microbiologist, Professor Hugh Pennington, reckons that the German e-coli outbreak that has claimed 22 lives has all the hallmarks of originating from bean sprouts, and that the organic farm fingered by the authorities is almost certainly the source. But you rarely get definitive evidence in such outbreaks, and initial tests at the farm have proved negative. Maybe not surprising. As Pennington told the BBC, the affected bean sprouts have probably all been eaten.

So why have we destroyed thousands of tonnes of Spanish cucumbers and German tomatoes? Why is Russia banning imports of all European vegetables?

The answer is simple protectionism. The phenomenon is as old as commerce itself. You pinpoint some defect in an import product, and that gives you an excuse to ban it and so favour your own producers. We saw it between 2000 and 2002, when France imposed a ban on imported British beef after the BSE scare. The ban continued long after British beef got a definitive all clear. It was only after the EU, to its credit, started imposing fines of £100,000 a day on France for its illegal ban that the lock-out was reversed.

Very often it is not some real or alleged defect that stimulates protectionism against imported goods – just the fact that they are cheap. In 1990 French (again!) protesters burnt alive a cargo of 219 British lambs, poisoned 94 and doused another truckload with insecticide to prevent their meat from being sold – simply because British lamb was cheaper than the expensively-produced French equivalent. One can see why domestic producers get agitated when they see their livelihood being threatened by those in other countries.

If the cheaper producers were home-grown, we'd call it competition and judge it a good thing. Is it any different, just because they happen to come from another country?