So it goes with free trade. Free trade is only good, if it is good for us. Last December, we reported that the German and the European steel industry can think of nothing more foolish than to endlessly complain about Chinese dumping (see here). Since then, these voices became louder and more outspoken. One of the main protagonists is Germany’s most outspoken free trader. His name is Sigmar Gabriel, social democratic Federal Minster of Economy and Energy.

According to the news agency dpa (see the Spiegel Online), Gabriel and five other Ministers of economics wrote in a letter from February 5 that

“The European Union cannot remain passive when job losses and closures of steel plants show that there exists a substantial and imminent risk of collapse of the European steel sector.’’

That is great, but we know that it is not true. Even the collapse of an entire industry is ultimately in the best interest of the country where it is taking place. Who knows this better than export surplus world champion Germany? If a competitor is able to produce a product for less money, the loser has to adjust or go down, that is the law of the market.

Does Germany not require from others in the world that they increase their competitiveness and follow the German example? The Federal Minister himself says so on the home page of his department that ‘‘Investment is a key to higher competitiveness in Germany and Europe.’

What is really going on? If a country in the world – and if you follow the talk of some German politicians you may not believe this, but China is of this world – invests and increases its competitive advantage, Sigmar Gabriel comes around and threatens to close the borders.  The Federal Department of Economy will argue that China is able to dump its steel on the world market because the Chinese economy is governed and heavily subsidised by the Chinese state. This argument is often used. The Western countries unjustly refuse to recognise China as a market economy within the framework of the World Trade Organisation (WTO).

Of course, Germany would never do anything like that! The German government would never put pressure on the social partners to ensure that wages are rising much less than possible so that German competitiveness increases artificially. The Social Democrats would not in a thousand years consider anything that stupid. The European Central Bank would also never weaken the euro in order to increase European competitiveness.

What we are left with is nothing but a collection of hollow phrases. Politicians say anything that makes them look good. But all of this is very serious. They simply do not realise that they are destroying the last chance to make globalization work for the majority of countries. All the rest is just mere talk. Where, in fact, is the much-vaunted German ‘Ordnungspolitik’ to which all must adhere to make the global market economy work?

One wishes that China would find the courage to fight off the attack of the biggest mercantilists on the planet with protectionist measures and that it would go to the WTO to enforce its right to do so. The German politicians should be careful for what they wish for. Anyone who wants to start a trade war can get one for sure, but it is certain that the export surplus world champion (who, incidentally, saw its automobile sector be saved by exporting like hell to China in 2010) will lose out the most.

Beyond all the ideology, there are obvious logical errors everywhere. Even the quote in the picture about investments being essential to increased competitiveness for Germany and Europe is factually wrong. Investments are a key to many things, but not to competitiveness. Who would know this better than the German Social Democrats who improved German competitiveness by means of wage moderation, only to find to out that investment does not pick up? This is a fact that they complain about almost daily in their diatribes.

One can only hope that the Americans will notice the superfluousness and the hypocrisy of the European charge of dumping against China. Then they will fully realise with which sort of great free traders they have to deal with in the TTIP.