NCPA - National Center for Policy Analysis

Trade and Terrorism -- in Theory and Practice

October 29, 2001

International relations specialists have long recognized the strong tie between world trade and global peace. Countries which 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 which 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 textile imports from Pakistan, steel from Kazakstan, and Islamic countries which 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. steelmakers, risking the anger of such steel-exporting countries as Kazakstan -- 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 subsidizing 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

For Pakistan text


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