Trade and terrorism – in theory and practice

International relations specialists have long recognised the strong tie between world trade and global peace. People that have a strong stake in buying from or selling goods to clients in other parts of the world are loathe to make war on them – or support policies of their own governments that might lead to fighting.

Expanded trade wraps the world more tightly in a web of commerce – lifting living standards in impoverished countries and eliminating an important cause of war and terror.

But other parties involved in the equation see expanded trade as inimical to their own interests – and those are, of course, domestic manufacturers who want to be protected through tariffs from overseas competitors.

Such is the case now with regard to American textile imports from Pakistan, steel from Kazakhstan, and Islamic countries that want to increase sales of agricultural products to the U.S.

Pakistan is a critical U.S. ally in the Afghan war and Pakistani officials want the Bush administration to lower tariffs on their textiles.

But access to the U.S. textile market remains tightly controlled by a domestic industry with considerable political clout in Washington.

Last week, the U.S. moved closer to blocking imported steel at the behest of U.S. steel-makers, risking the anger of such steel-exporting countries as Kazakhstan – another important ally on the Afghan border – and Russia, which could be the most important partner in a worldwide campaign against terror.

Countries such as Pakistan, Egypt, Indonesia, India and Morocco all want the U.S. to stop subsidising its own farmers and to slash tariffs on agricultural goods and clothing.

Sources: Bob Davis, The Outlook: Trade Craft Is Employed on War's Economic Front, and Helene Cooper, Pakistan's Textile Bind Presents Bush Team With a Tough Choice, both in Wall Street Journal, October 29, 2001.

For Outlook text http://interactive.wsj.com/articles/SB1004323780631454720.htm
For Pakistan text http://interactive.wsj.com/articles/SB100432372562283680.htm
For more on Terrorism http://www.ncpa.org/iss/ter/

FMF Policy Bulletins\6 November 2001