Be VERY Careful What You Ask For!!

I happen to know that a good number of my clients and friends are not sympathetic to my resistance to the present protectionist (call it America first, if you like) tone.

And while I suspect that those who I'm new to (who don't know my political bents) see my position as somewhat political, I assure you, it's not! It's about business and, frankly, it's about freedom.

With regard to business, consider the impact a three-year-old Canada-first policy is having on the Canadian meat industry:

Three years after former Prime Minister Stephen Harper tightened restrictions on foreign workers to force employers to hire more Canadians, processors from British Columbia to Nova Scotia say the move compounded a labor shortage from which they have not recovered. The Canadian Meat Council estimates the industry has 1,650 vacancies at 19 rural abattoirs, or 9 percent of total employment at those facilities.

“We are really concerned going forward how we’re going to be able to fill our positions,” said Claude Vielfaure, president of HyLife Ltd., a Manitoba-based pork processor that exports C$650 million of meat annually to countries including the U.S., China and Mexico. “If we don’t have the people, we’re just not going to grow, and we’re going to fall behind.”

Ironically, and this is my chief concern, history shows time and again that populist-styled country-first policies -- carried out over time -- ultimately create country-last results.

Here's from a speech by Cato's Daniel Grizwold, where he tells how China once went from first to last:

In 1400, China was in every way superior to West: in technology, living standards, and global influence. But the country became enveloped in a smug self-sufficiency, cultural and economic inwardness, a closed and centralized political system, and an anti-commercial culture. In the 15th century, China turned its back on the world economy.

Marco Polo testified to the vigor of China’s international trade during his visits in the late 13th century. The commercial city of Hangzhou had 1 million residents by then, including a merchant class and uprooted refugees. The city embraced relative freedom, change, and travel, and was open to Arab and Hindu learning. The citizens of Hangzhou had a saying: “Vegetables from the east, water from the west, wood from the south, and rice from the north.”

In those days, Chinese plied the Indian Ocean with fleets of ocean going merchant junks, 100 feet long and 25 feet wide, carrying 120 tons of cargo and 60 crew. Those ships visited Indonesia, Ceylon, and the west coast of India. By the 13th century, the Chinese had developed dry docks and gunpowder bombs—300 years before those were seen in the West.

Beginning under Emperor Zhu Di, the Chinese launched seven official naval expeditions between 1405 and 1431 to Indonesia, India, Arabia, and East Africa. The expeditions were lead by the eunuch officer Zheng He. These “Treasure ships” were the largest in the world, 400 feet long by 160 feet wide (vs. 85 feet long for the Santa Maria). The ships were multi-decked, with nine masts and sails of red silk traversed with laths of bamboo for more durability and precise steering. Each ship carried hundreds of sailors and had 15 or more watertight compartments, and 60 cabins. At 7,800 tons of displacement, they were the largest ships in the world until those of the British Navy after 1800. In all, China built 250 such ships as part of a major shipbuilding program that would have been unimaginable in Europe at the time.

In 1400, China was in every way superior to West: in technology, living standards, and global influence. But the country became enveloped in a smug self-sufficiency, cultural and economic inwardness, a closed and centralized political system, and an anti-commercial culture. In the 15th century, China turned its back on the world economy.

So for more than 500 years, from the 15th to the 20th century, China’s economy slipped further behind the rest of the world. As late as 1820, the gross domestic product of China was still 30 percent higher than the total GDP of Western Europe and its settlements, but it was only one-twelfth the size by 1950. The Chinese economy was not open in the 19th century despite trade treaties and Western encroachment. Its trade was conducted in self-contained trade zones with little impact on the rest of China. The share of exports in China’s GDP was only 1.2 percent in 1913 at the height of pre-war globalization in the West.