Protectionism wears the skin of health and safety

Regulations wrapped in red tape

Trump is an unusual figure among the world’s politicians. It is not that he is a nativist and a protectionist, but that he is open and direct about his nativist and protectionist beliefs. Trump says that foreign companies are harming American companies by undercutting on price, and that foreigners are stealing American jobs by working in America.

There are many reasons to attack these beliefs and to tell Trump he’s wrong. Here are some reasons give on the left or the right, maybe you agree with one of them:

  • If foreign companies sell for cheaper, than that means blocking foreign goods raises prices. And raising prices (aka inflation) directly harms all American consumers way worse than foreign goods harm a single American company
  • “Oh your company can’t compete? Sounds like a skill issue. Your company deserves to go bankrupt, free market in action.”
  • Foreigners do jobs Americans don’t want to do
  • It’s unethical to prevent foreigners from moving to America to look for a better life
  • “Oh you can’t compete against foreign workers? Sounds like a skill issue. You deserve to go bankrupt, free market in action.”
  • Trade barriers will wreck the economy by driving up prices, and any claims of fairness are necessarily secondary to this single overriding truth: trade barriers are bad for the economy

Politicians in and out of America have made each of these arguments in turn as they argue against Trumps new tariffs. But the single-minded opposition to tariffs hides something deeper: almost every politician globally throws up trade barriers just like Trump, but they have different excuses.

  • “Those goods contain chemicals that harm our health”
  • “Those goods contain chemicals that harm our environment”
  • “For national security or data privacy, we cannot allow foreigners to hold our market or buy our data”
  • And the old reliable: “those goods and services don’t comply with our regulations.”

This last one is pernicious because of how vapid and all-encompassing it is. It only works because people have a knee-jerk reaction against deregulation, but as I have pointed out, there’s a lot of anti-consumer regulation out there raising our prices and harming our economies. Regulation doesn’t actually mean “good,” but enough people believe it does that politicians can hide all their protectionist bullshit behind an aegis of “regulations.”

I say all this because I’m bashing the EU again today. A former EU minister of parliament put out a post which demonstrates a lot of this BS EU protectionism. I had already known that the EU uses “regulation” to protect its market from foreign goods, what is commonly termed “protectionism.” What I did not know is how much EU countries use this to protect their national markets from the single market itself.

The whole idea of the single market is free trade and free movement. If a company is allowed to sell goods in one country, it should be allowed to sell goods in all of them. If a person is allowed to work in one country, they should be allowed to work in all of them. This reduces barriers, brings countries closer together, and is much more efficient economically than a world of barriers and tariffs. It should bring everyone prosperity.

But the countries of the single market still want to “protect” their national markets and their national workers, just like Trump does. But unlike Trump, EU countries are legally forbidden from erecting tariffs. So they use health, safety, and regulation instead to do their dirty work. Here’s some examples from the article:

  • Denmark claiming that adding vitamins and nutrients to breakfast cereal “could be toxic,” with absolutely no justification whatsoever. The cereals are consumed EU-wide, and one would think the burden of proof would be on the accuser in that case. But no, a baseless “could be toxic” claim is enough to ban a product in Denmark unless the company making it is willing to go through a long court battle against a national government.
  • Spain and Italy trying to force foreign chocolate (consumed in every EU state, legally chocolate by EU law) to be explicitly marketed as “not true chocolate” even though every law says its chocolate.
  • France forcing Dutch biodiesel to comply with expensive testing that is waived for French biodiesel.
  • Germany forcing foreign professionals to undergo expensive “equivalence checks” before allowing them to work in the country. This is just more BS occupational licensing by the way, a horse-groomer shouldn’t need a license to begin with let alone an “equivalence check” to make sure their Italian license is valid in Germany.
  • Adding new national regulation that must be complied with *on top* of any EU regulation. This is the most pernicious, because most EU regulations explicitly mention that they are there to “harmonize” the market, make goods acceptable in every country. But EU regulations in the past decade have not decrease trade barriers, because countries have learned to add a new national regulation on top of every EU one, forcing foreign companies to increase their compliance cost if they want to break into a national market.

For years and years, Europe was indeed a continent of decreasing trade barriers. While they continued to be strongly protectionist against the outside world (erecting anti-GMO laws primarily as protectionism for EU farms), they were at least reducing barriers within the block. But Europe is not immune to the anti-globalization sentiment that has swept across Britain and America since 2016. It’s just that much like Biden, European politicians are caught between maintaining their appearance as internationalists while still wanting to be protectionists and nativists.

So rather than erect tariffs, the EU countries have recently relied on “soft” barriers, barriers which don’t *technically* forbid entry of foreign goods, but which do place onerous costs on anyone who wants to enter the market. And a supposed internationalist has to justify their protectionism somehow, they don’t have Trump’s luxury of just honestly stating their beliefs. So they rely on their old faithful excuses: health and safety.

Biden claimed that foreign goods were a national security issue. China was the security threat that we were supposedly countering, but we countered China in part by banning Vietnamese solar panels, Mexican cars, and Canadian lumber.

And for the EU countries health, environmentalism, and data privacy are paramount. They’re part of what separates Europe from America after all. So who cares that added calcium isn’t unhealthy, or that Dutch companies are making biodiesel the same way French companies do, if it’s foreign we can claim it’s unhealthy and unsafe by default. And then we ban it until they comply with our expensive tests, or until they start making the product in our country, or until they stop being foreign and sell themselves to locals.

This is exactly what Biden and Trump wanted: American goods instead of foreign goods. But the EU countries use regulation to achieve this goal since they can’t tariff the single market.

And this is one of the main reasons I push back against regulation. I’ve said over and over, regulation is not intrinsically good or bad. Good regulation is good, bad regulation is bad. But I’ve seen over and over how politicians hide their protectionism behind a coat of regulation. And I’ve seen how most people have an intrinsic distrust of deregulation, meaning whenever I point this protectionism out I’m accused of wanting to destroy health and safety.

“Foreign cereal is unhealthy,” “foreign biodiesel is bad for the environment,” “foreign Tech companies will steal our data,” it’s very easy to just claim this without evidence and get people on board with you. And it’s *surprisingly* easy to do when “foreign” just means another country in the EU, wasn’t Europe supposed to have solidarity?

And it’s impossible to prove a negative, so proving that the cereal is no less unhealthy, the biodiesel is no different, the foreign Tech has the same policies as the native Tech, this is a losing proposition and expensive to boot. So protectionism goes on unabated, and then people wonder why the EU is still falling behind economically. Well Mario Draghi told you why, it’s because even before Trump the EU was putting tariffs on itself.

I write this in part out of frustration and in part as an attempt at education. People are negatively polarized against Trump, and so even people who never heard or cared about tariffs are deciding that tariffs are bad and we shouldn’t do them. Some neoliberal Democrats are hoping that this lets them finally remake the coalition, and kick out the protectionists like Biden and Sanders in favor of rebuilding the Clinton-Bush-Obama consensus of free trade.

But even if this happens, I’ve seen way too much evidence that this will not be a radical remaking of ideology. Protectionism will, as it has in the EU, simply become the purvey of health and safety. Even the neoliberals of the party have trouble arguing against health and safety, especially when Democrats as a whole are so negatively polarized against deregulation.

So that’s what I really wanted to say: regulations are not always good. They are not always bad, but they are not always good. Don’t assume that just because the government banned something, it was right to do so. Be open to the possibility that they’re protecting their markets just like Trump is.

One thought on “Protectionism wears the skin of health and safety

Leave a comment