ANALYSIS: Out of Gaps In Treaties, First Salvos Of Trade War, By Anthony Faiola, Washington Post, February 1, 2009; Page A01
Basic message we've heard before: rules in place prevent widespread protectionism and so far nobody transgressing those rules. But what they are doing is exploiting every loophole.
Gary Hufbauer, FDI expert and friend who attended my FDI economic security exericse atop TWC1 in early 2001, puts it most succinctly:
"There are lots of institutional firewalls to prevent trade wars that exist today that did not exist during the Great Depression," said Gary Hufbauer, senior fellow with the Peterson Institute for International Economics. "That could help now. But there is still a lot of room for damage, maybe pretty bad damage, that can be done in the gray area of the rules."
Worrisome? You bet. But not time to freak out yet. Amidst this much stress, you gotta expect governments will do everything allowed under law and pretty darn much anything not specifically outlawed.
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