Gooooooooooooal!

Story Highlights:

• Protectionism can pop up in unexpected places, like professional soccer.
• Like professional soccer leagues, many countries block or discourage free trade and foreign investment.
• However, history shows foreign investment is positive, increasing growth, wealth and jobs.

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Protectionism. That's the watchword. The US blocks free trade with Colombia. Japan discourages foreign investment. Socialists ban multinational companies. The UK taxes foreign non-domiciles. And the International Federation of Association Football (FIFA) wants to cap foreign . . . footballers?

EU Assembly Rejects Blatter's Quota Plans
By Darren Ennis, The International Herald Tribune
https://www.reuters.com/article/uk-soccer-eu-fifa-quotas/eu-assembly-rejects-blatters-quota-plans-idUKL0875185520080508

FIFA proposed limiting European soccer clubs to five foreign starters each. This proposal stems from the fear super-power clubs with multiple foreign starters rob domestic players of valuable opportunities. Discontent over foreign workers "stealing jobs" . . . sound familiar?

Thankfully, the EU rejected FIFA's plan. Members of European Parliament agree it violates EU labor laws, discriminates based on nationality and, perhaps most egregious, yields boring games. Who wants to see Barcelona without Ronaldinho or Lionel Messi? Or Manchester United without Cristiano Ronaldo? Yeah, neither do we.

It's curious then that the EU's decision doesn't translate into sensible trade policies around the globe. After all, the issues are identical: Like clubs with foreign players, countries with freer trade perform better over time. Free movement of soccer players increases gate receipts, jersey sales and excitement, while free trade and foreign investment spurs growth and innovation.

Unfortunately, governments don't get it and nationalism can creep in—even in otherwise capitalist states. Even in the US, some believe foreign involvement threatens sovereignty and jobs. If jobs "leave," foreign companies are the scapegoat. When sovereign wealth funds invest here, we fear they'll exploit American companies for political gain.

But these fears aren't valid. Time and again, free trade and foreign investment have proven to increase jobs and wealth. Consider the UK. The death of British Coal decimated Welsh mining towns in the 1980s. Today, Wales is thriving. Why? Foreign companies moved in, offering jobs and higher wages than coal ever did. Most recently, Amazon.com opened its largest British distribution center in South Wales, creating 1,200 full-time jobs. Are they better off working dangerous mining jobs for domestic firms or working better-paying, safer jobs for foreign firms? Probably the latter.

Still think foreign investment is scary? If so, riddle me this: What do Egypt, Slovakia and Peru have in common?

Pasha Heir's Partnership With Egyptian Socialist Powers Mideast
By Mahmoud Kassem, Bloomberg
https://www.bloomberg.com/apps/news?pid=20601109&sid=aSrbvRQiBekc&refer=exclusive

Slovakia Secures Commission Approval for Euro Entry
By Meera Louis and Radoslav Tomek, Bloomberg
https://www.bloomberg.com/apps/news?pid=newsarchive&sid=aG0A3s0J7qYE

Peru Takes the Other Path
By Mary Anastasia O'Grady, The Wall Street Journal

Each did some or all of the following: dumped dictators, privatized state-run companies, increased foreign investment, slashed regulations and cut taxes. The result? Egypt's stock market gained 1,340% in five years. Slovakia achieved a stable, growing economy and entry in the euro. Peru's economy grew better than 6% annually since 2000. Each saw increased wealth, jobs and productivity.

This trend isn't limited to developing nations. Northern Ireland gets it too.

Northern Ireland Works to Draw Foreign Investment
By Jonathan Saul, The International Herald Tribune
https://www.nytimes.com/2008/05/06/business/worldbusiness/06iht-irecon.4.12614527.html

Unfortunately, Northern Ireland is shackled by the UK's high corporate taxes and that "non-dom" super-tax. While Northern Ireland covets foreign investment, the UK faces an exodus as the same companies that arrived in the post-coal era threaten to leave. Where are they going? The Republic of Ireland, where the grass truly is greener. Losing these foreign companies will cost the British economy what London mayor-elect Boris Johnson calls "stonking quantities of dosh."

Of course, this is the nation whose MPs authored their own motion to limit foreign footballers, so the message may sink in slowly. If countries can't grasp the simple truths of the soccer pitch, how can they fathom the joys of free trade and foreign investment? Like the English Premier League needs Carlos Tevez, growing economies need foreign investment. Score another goal for capitalism!