Everyone has their reasons

In the US, national security has been cited by proponents of protectionism for a wide variety of products, ranging from computer chips to automobiles to shipbuilding. But when it comes to foreign countries, our protectionists often have a blind spot. They cannot even imagine that any other country might also have good reasons for national security concerns.

“Everyone has their reasons” is a famous line from the classic French film Rules of the Game. I was reminded of this line when I read a Bloomberg article about Swiss trade policy. Switzerland eliminated all tariffs on the manufactured goods, but continues to protect its agricultural industry:

Switzerland’s bid for a US trade deal risks sparking a showdown with one political force at least as feisty as President Donald Trump: its own farmers.

A country whose lush Alpine pastures, cowbells and cheese underpin the national identity, and whose agricultural lobby wields outsized influence to match, is in danger of a tough reckoning over what that’s worth when economic prosperity is at stake.

Countries such as Japan and Switzerland do not have a comparative advantage in agriculture. Nonetheless, they often protect their farmers for various reasons, including “national security” considerations. I presume the Swiss were glad that they had an intact farm sector during WWII, when they could not rely on food imports from Germany.

At an international level, the political influence of farmers is inversely related to their share of the population, which is a problem for many theories of politics. In poor countries, farmers are numerous but politically weak. In almost all developed economies, farmers are a small minority. But they are viewed a sympathetic lobby, even by city dwellers:

Acceptance of the current design of the domestic food market is widespread, despite its burden on consumers, fostered by a national belief in self-reliance. But bigger economic interests may prevail when set against agriculture, which represents a small fraction of gross domestic product.

The voice of farmers is often amplified in advanced economies, as seen with recent tractor protests from London to Paris and Brussels. In Switzerland, their influence pervades the political system.

Long time readers know that Switzerland has my favorite political system. The Bloomberg article mentions one more advantage of direct democracy:

“Don’t underestimate Swiss diplomacy,” he said. “Whatever deal the Swiss may strike, it would probably have to be accepted by parliament, possibly even by referendum. That could strengthen Swiss negotiators because they can honestly say: Look, we won’t be able to get this through with our people.”