Ensuring protection without protectionism

The U.S., by and large, is a very open economy, with the free movement of goods across American borders a key pillar of national prosperity. For decades, criminals have used cargo containers, trucks, and train cars to bring narcotics, weapons, and people across U.S. borders illegally. In today's world of global conflict, however, this dynamic trading system also can be exploited by terrorists. The worst-case scenario would involve a weapon of mass destruction entering the country via trade channels. In "Protection Without Protectionism: Reconciling Homeland Security and Trade," Aaron Lukas of the Cato Institute's Center for Trade Policy Studies, Washington, D.C., examines ongoing efforts to make international trade more secure.

"The challenge for U.S. policymakers is to improve security while minimizing the loss of liberty and the benefits of economic openness," he stresses. "Trade is the lifeblood of the U.S. economy and cannot be curtailed without greatly restricting U.S. standards of living. Exchanging the possibility of a terror attack for the certainty of a poorer nation is not a wise course of action."

Lukas reports that the Bush Administration has made progress in improving trade security, but that the jury is still out on how effective its initiatives ultimately will be. He cautions that, while guarding against terrorism is important, it is vital that security does not become an excuse for domestic protectionism. Moreover, Lukas points out how the Department of Homeland Security wastes scarce resources on efforts to "protect" Americans from low-priced goods rather than from terrorists.

Lukas maintains that not all security measures should be the responsibility of government. "Just as 'national defense' does not entitle every homeowner to a Federally funded burglar alarm, it does not relieve private businesses from the responsibility of providing much of their own security," he notes. "Federal rules and regulations are often necessary, but should be as open-ended as possible, setting security goals and verifying how well the private sector meets them, rarely mandating specific technologies or processes."

Lukas concludes with a warning to those who would respond to the threat of terrorism with higher barriers to trade: "Economic openness is a progressive force in global affairs. Trade brings nations together in peaceful cooperation, offers hope to the world's poorest people, and spreads new ideas and ways of doing things. Trade promotes democracy, private property, and the rule of law. Our enemies know this. They targeted the World Trade Center because they recognized--and continue to believe--that trade is a threat to the tyranny they represent."

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