One fact that most economists agree upon is the widespread benefits of free trade, including improved efficiency, faster economic growth, lower prices and more consumer choices.  Unfortunately, the same consistency cannot be said of politicians.   For many members of Congress, it apparently is too difficult to stand up to special interests seeking protection from competitors.

This was exhibited last week, as the House of Representatives voted for limits on foreign steel by a vote of 289-141.  While in recent years the substantial influence of labor unions has pushed the Democratic Party firmly into the protectionist camp, Republicans apparently are no longer a bastion of free trade.  Indeed, 91 Republicans voted for steel protection, versus 128 voting against.

These steel quotas fortunately face high hurdles in the Senate.  If they do become reality, however, they would translate into higher costs for businesses using steel, and in the end all consumers, including individuals, families and small businesses.  In addition, protectionist retaliation is likely among our trading partners, thereby damaging U.S. exporting businesses who already are hurting due to slower economic growth elsewhere around the globe.

Let's understand what's really at issue here.  It's not so-called "dumping" of steel in U.S. market, but instead, it is the long decline of big steel which is facing competition not only from abroad but also, as Robert W. Crandall of the Brookings Institution noted in the March 19 "Wall Street Journal," from minimills in the U.S. 

Crandall noted that "the large integrated steel companies, with their ponderous bureaucracies and unionized workforces, simply cannot build and operate minimills in competition with the smaller, entrepreneurial companies." Later, he concluded: "In short, the end is approaching for Big Steel as the new entrepreneurial companies continue to replace them...  No amount of trade protection will change that balance."