Many observers have long worried about protectionist pressures even as the economy operates at full-employment. What, I wonder, will occur when the economy slows appreciably and unemployment increases, against a backdrop where the safety of imports is already at issue? Those of us who believe that a open and free trading regime is preferable to a restrictd trading regime should be concerned.
Now, here it may appear that there is a non sequiter between trade and safety regulatoin — but I think there is a link in the popular mind. I think the Administration, in abdicating responsibility for enforcing the regulations that currently exist, has unintentionally (aside from steel tariffs back in 2002-03, which were intentional) aided the cause of protectionists. All one has to do is to consider the current uproar over imports of lead-tainted toys, melanin contaminated pet food, anti-freeze laden toothpaste, all sourced from China. The current trade regulation regime allows for restrictions of imports that are deemed to be unsafe; these “sanitary and phytosanitary standards” have been a long-standing fixture of the international trade regime (specifically, Article XX of the GATT, as well as separate agreements on food safety and plant and animal health).
But in order to use these regulations, one needs a regulatory infrastructure with sufficient resources, and policy level backing, to operate. Otherwise, there will be a temptation to implement more blunt tools of outright protection.
However, instead of maintaining the regulatory framework that was in place, the current Administration has spent the past seven years essentially dismantling the regulatory apparatus — CPSC, FDA, USDA — that would be able to monitor the goods coming into the country (for discussion, see , ,  ; a CRS report lays out current deficiencies). Indeed, until the uproar over Chinese food imports, the Administration was intent on closing FDA labs.
Regardless of one’s stance toward whether these regulatory agencies are a good thing or not, the very fact that the general public now distrusts some imported goods that are circulating within the borders of the U.S. means that there is incipient pressure to restrict goods from a specific country (China) (see Drezner’s post making this point). Yielding to such pressures might allay some fears (although it is not clear that on a proportional basis, China is the biggest violator of phytosanitary standards — see Table 3 of this CRS report, which notes that Mexico is ranked first for number of refusals), but it would put the US in violation of the nondiscriminatory clause of the WTO’s articles, thereby justifying retaliation on the part of China. Should we find cause to reject imports from other countries, they too will have cause to retaliate against the U.S.
My impression is that the current Administration will likely take a “just say No” approach. With the balance of power shifting ever away from the executive, and toward the legislative branch, I suspect that this approach will not be sufficient to stanch the protectionist surge.
So what is to be done? Fortunately, so far, polling data does not indicate a push for more protection as a consequence of these events — but one (well, okay two) more recalls by toy manufacturers, and who knows?
If the Administration really wants to stem the tide of protectionism, it might have to consider actually enforcing the regulations in place (see , again, for detail). That would require a high profile commitment to fund the agencies that are charged with monitoring the safety of goods that we all consume, thereby allaying consumer fears. The Administration has an opportunity to do exactly that, in response to the report of the special Presidential panel, set to present its report on September 17th. And, as an aside, a little more than lip service to reducing the uncertainty facing workers exposed to international trade competition wouldn’t hurt, in terms of trying to sustain the pro-free trade constituency.