Job Protection and Free Trade

Report Outline
Revival of Protectionism
Parallels to Past Periods
Steel's Case for Protection
Special Focus

Revival of Protectionism

Conflict Between Free Trade and Jobs

Americans are buying imported goods in greater quantities and dollar amounts than ever before. At the same time, jobs in many domestic industries are in jeopardy—or have been lost—as a result of foreign competition. The convergence of these trends has created an important policy issue—how much government protection can and should be given to American industries threatened by foreign imports? There are no simple answers. Freer and expanded international trade would benefit many segments of the U.S. economy. At the same time, already high unemployment rates and fear of future increases have resulted in mounting pressure on the Carter administration and Congress to restrict imports.

AFL-CIO President George Meany recently declared: “Free trade is a joke and a myth. And a government trade policy predicated on old ideas of free trade is worse than a joke—it is a prescription for disaster. The answer is fair trade, do unto others as they do to us—barrier for barrier—closed door for closed door.” The 900 delegates to the AFL-CIO's biennial convention, held earlier this month in Los Angeles, approved—without dissent—a resolution calling for import quotas, curbs on business investment abroad and other stringent protectionist measures.

Those whose jobs and businesses are threatened by imports claim that American industries are at an unfair disadvantage because foreign manufacturers (1) pay lower wages and taxes, (2) do not have to comply with health, safety and environmental standards as stringent as American ones, and (3) can raise capital more cheaply and easily because of government assistance. Those whose standards of living and livelihoods depend on the availability of imports see the other side as chauvinistic and shortsighted. The lines cross and blur.