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To paraphrase Mr. Santayana:
Those who don't read history
are condemned to repeat the mistakes of their predecessors. Having
learnt that the postwar panacea "inflate out of recession" is no
panacea but a long-term prescription for disaster, they are now
reverting to the pre-war remedy of protectionism.
Protectionism cannot cure recession:
though it may
produce an apparently beneficial short-term effect it can only make
things worse in the long run. It seems to me rather like giving
a large brandy laced with a slow-acting poison to someone who is
ill already. Protectionism will harm the countries that practise
it as well as those at whom it is directed. As a headline in the
Asian wall Street Journal put it
can play but all lose".
Protectionism is "a Game many
All of which by way of background to and explanation
of the fears we expressed some time ago of the possible economic
effects upon us of a highly restrictive textile agreement with the
EEC, effects that could not be confined to our textile trade with
the Community.
As you know, Mr. Tran, the Community's Special Repre-
sentative, came to Hong Kong last August to "explain" what the EEC
had in mind for Hong Kong. He attempted to persuade us that
"sacrifices" would be required of Hong Kong and that it was
unreasonable for us not to accept this. It was necessary to protect
domestic producers from the "flood of imports" is this the most
overworked metaphor in any language today? and to distribute a
good deal of our trade as quotas to other developing countries.
He did not mention that it was only part of the flood of imports
that the Community wished to stem, just that part that happened to
come from developing countries. Nor did anyone who sought to
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