Emerging from hardscrabble Afghanistan, the September 11 terrorist attacks were one threat to world peace and security. Another threat is emerging in the elegant halls of the US Congress.

Reason seems to have loosed its grip on Congress as it plows ahead with a plethora of protectionist legislation. By far the most dangerous is a bill that would multiply US farm subsidies.

That bill could be the final shot that pushes a world already edgy about increased US protectionism into a trade war – a war that would have far more devastating consequences than the war in Afghanistan or the war against terrorism. A trade war would cut off opportunity for third world nations and leave all nations poorer and more suspicious of each other.

That’s the way the first era of globalization came undone. That era lasted from the end of the Napoleonic wars – when leaders intentionally opened borders in an attempt to bind nations together and make the horrors of war less likely – to the opening decades of the 20th century.

In those first decades of the 20th century, nationalist groups – like those operating today – undermined public support for trade. Governments bowed to the pressure. Trade barriers rose. The process culminated in the notorious Smoot-Hawley Tariff Act, passed by the US Congress in 1930.

Smoot-Hawley was designed to protect US “sovereignty” and jobs. Instead, it launched an international trade war that destroyed millions of jobs worldwide, laying the groundwork of suspicion and desperation that led to World War II.

Many of today’s anti-globalists, like Maude Barlow of the Council of Canadians, strongly support European farm subsidies. So, presumably, they’ll support the US agricultural bill, which will still leave US farmers less subsidized than European ones. The anti-globalists will also be delighted by the trade disruption these disputes cause.

Canada has greatly reduced farm subsidies, from 33 per cent of total farm receipts in 1986-88 to just under 20 per cent now. Over the same period, US subsidies fell slightly, from 25 per cent of total farm receipts to just over 20 per cent. European Union subsidies remain the big problem, still almost 40 per cent of total farm receipts. (These estimates encompass direct subsidies and policies that create indirect subsidies, like marketing boards which artificially raise prices by restricting competition.)

Although US subsidies will remain relatively low compared to Europe, the United States had signed on to an international effort to reduce farm subsidies. The US bill at the very least violates the spirit of this effort. Several nations are launching complaints with the World Trade Organization (WTO) and are preparing their own retaliatory measures.

The US agricultural bill comes on top of new US tariffs on steel, the softwood lumber dispute, and a bill that would subsidize Alaska natural gas and the Alaska pipeline route. This could undermine Canada’s alternative Mackenzie Delta project.

The world of trade isn’t the world of physics, yet it’s still approximately true to say that “every action generates an opposite and equal reaction.” US protectionist measures will spur “opposite and equal reactions” around the world, threatening the sort of global trade war that erupted in the 1930s.

It’s difficult to say why this is happening now. Perhaps, US legislators are fed-up with democratic nations that quietly expects the United States to protect freedom and democracy and then loudly complains every time the United States does so. In the United States, this understandably generates a “let’s go it alone” approach in both military and trade affairs.

We have one advantage over the 1930s – trade institutions like the WTO and the NAFTA (North American Free Trade Agreement) Secretariat that have some powers to resolve trade disputes. Anti-globalists detest these organizations, but they are our best bet to avoid the tragedies the world suffered the last time a global trade war threatened on the horizon.