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Fortune: On how US politicans ensure principles of free trade lose out to the practice of protectionism

A Weekly Digest of The World's Financial Press

N. Gregory Mankiw
Tuesday 30 March 1999 17:02 EST
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THE THEORY is that Brazil, Japan and Russia are `dumping' steel - (selling below the cost of production) - on US markets. Taken as a whole, US policy conveys a strange message. We Americans should happily send our dollars to ailing economies, but we should object if they send us steel in return. This defies all logic.

Policymakers would do everyone a favour if the they heeded the old slogan: "trade, not aid." An open trading system is one of the surest ways to promote growth around the world. Sadly, current American policy is getting things exactly backward.

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