The Temptation to Protect

Abstract

A new struggle between liberal and protectionist trade policies is rapidly replacing the old Cold War confrontation between communism and capitalism as the new divider of European nations. During the Cold War the dominating Western common policy had been to contain the spread of communism. As a result of this cooperative security stance, many otherwise fractional issues between the Western allies were also contained: foremost among these being the differences in economic ideology. Consequently, throughout this period, when the US’s main trading partners were also its military allies, liberal trade principles flourished and the West experienced nearly fifty years of unparalleled prosperity. With the fall of the Soviet Empire, however, an old rift was reopened between the traditionally Western European view of capitalism, in which the state, organised labour and state capital play central roles, and the freer-market model associated with the United States and the United Kingdom. Within the European Union, the differing attitudes toward trade have divided the member states into two broad groups: the ‘free traders’, Britain, the Netherlands, Portugal and Germany, and the ‘interventionists’, France, Spain, Italy and Ireland.