by John Murphy

Dartmouth economist Douglas Irwin, one of the country’s leading historians of trade, has a great piece in the Wall Street Journal today on “How ‘Protectionist’ Became An Insult.”  Irwin notes June 17 was the 80th anniversary of the Smoot-Hawley tariff, which

slashed U.S. dutiable imports by about 15%, for example. Even worse, it spawned protectionism abroad. America's trading partners, notably Canada, did not turn the other cheek. Outraged at being kicked out of the U.S. market, the pro-American Canadian government retaliated …U.S. imports of eggs from Canada dropped to 8,000 dozen from 13,000 dozen after Smoot-Hawley. But U.S. egg exports to Canada dropped to 14,000 dozen from 920,000 dozen as a result of Canada's retaliation.

That’s a tiny sample of the spiraling cost of protectionism. As the collapse of world trade in the early 1930s added to the misery of the Great Depression, the American people paid a price in misery that re-echoes to this day.  However, there were valuable lessons learned. First, this made “the term ‘protectionist’ an insult rather than a compliment.” Also:

Another lesson is that active commercial diplomacy is needed to keep trade open. If the U.S. trade agenda remains inactive, other countries will move ahead and pursue trade agreements that put U.S. exporters at a competitive disadvantage in world markets.

On this score, the Obama administration should work to end the stalemate in Congress on the trade agreements with Colombia and South Korea. These agreements should be no-brainers because they are one-sided: The U.S. is already open to their goods, but this is not reciprocated. All the agreements do is level the playing field. And just as Smoot-Hawley had bad political effects abroad, trade agreements could have good ones—something to keep in mind as South Korea faces North Korea and Colombia struggles with Venezuela.

The good news for Colombia is that the Canadian House of Commons approved the Canada-Colombia free trade agreement by an overwhelming margin on Monday, and it is expected to enter into force soon.  Good news for Colombians … and Canadians … but bad news for American workers and farmers, who are about to be priced out of the Colombian market, as Patrick Kilbride recently explained.