The Resistible Appeal of Fortress Europe (Rochester Paper ; 1)

The European Union, by virtue of its size alone, is called upon to play a central role in establishing a prosperous and liberal world economy. But, says Martin Wolf, its historic approach--an uncomfortable compromise between liberalism and protectionism--raises serious doubts about whether it is capable of rising to the challenge. The Maastricht treaty has reinforced Europe's protectionist and centralizing tendencies, while the impact of new competitors upon the European economy may have also served to foster a "fortress" mentality. Such trends are very likely to encourgage similar developments elsewhere. Indeed, there is a very great danger that the "naive mercantilists" on both sides of the Atlantic will join hands to dance to the same protectionist tune, thereby putting at risk all that has been achieved by way of trade liberalization over half a century.