'Bush League' Trade Policy

Abstract

Benjamin Powell critiques the Bush administration's consideration of "safeguard" quotas to protect U.S. textile and apparel industries from rising Chinese imports. He argues that protectionism harms consumers and fails to protect overall employment in the U.S. The Multi-Fiber Agreement's end led to a significant increase in Chinese imports, sparking calls for protectionist measures. However, historical evidence shows that trade policies do not affect total job numbers, as employment depends on labor force size. Powell emphasizes that free trade reallocates labor and capital to more productive areas, benefiting consumers with lower prices. Imposing quotas would raise consumer costs and reduce economic productivity, counter to economic theory and free trade principles.