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The serious and growing financial problems gripping the United
States are affecting nations around the globe, evidence of the vast
sweep and integration of the world's economies. Stock markets are
reeling from London and Tokyo to Buenos Aires and Johannesburg.
Currencies have fluctuated wildly. And prices for copper, oil and other
commodities -- driven up by strong international growth, to the benefit
of developing nations where they are produced - have fallen in
anticipation of a global downturn that will surely cut demand. Rarely
has the expression "It's a small world," sounded more like a curse. The
temptation, then, will be strong in many countries to try to
shield themselves from future shocks as they work through the crisis.
Such protectionist instincts are understandable, but they are also
shortsighted. Amid a global credit crunch that is stifling commerce in
nations both large and small, the world needs more flows of investment,
services, commodities and manufactured goods to right the ship, not
less of them.U.S. Secretary of Commerce Carlos Gutierrez told business
Rio de Janeiro recently that nations with open economies will pull out
of the current crisis faster than those that cut themselves off. "More
than ever, trade is essential," Mr. Gutierrez said. During the Great
Depression of the 1930s, he noted, the U.S. erred greatly in raising
import barriers hoping to protect its economy. Instead, it sparked
retaliation from other nations and worsened the global economic
contraction. Thanks to computers, improved transportation and
financial markets, the world economy is even more integrated today.
Improved regulation and market transparency surely will be needed, but
the international community must work together to face the challenge.
That means continuing to take advantage of comparative advantages by
trading with and investing in each other. Now is not the time to raise
the drawbridge and try to retreat to
self-sufficiency, if such a thing were even possible. No nation can
prosper, so to speak, when its citizens merely take in each other's