Reason‘s Matt Welch comments on the story that the Bush Administration is going to refuse to allow bids for Iraqi reconstruction work from companies that are located in countries that did not support the coalition.

1) It [costs] the Iraqi people and the American taxpayer, by making them pay above-market prices for reconstruction. 2) Assuming that it is remotely possible that the United States might some day be wrong about something it cares about, the ban incentivizes allies to swallow any potentially legitimate objections to American action, thereby stunting the flow of information. 3) It confuses companies with countries, which is a concept that should make true free traders wince.

I made similar points in Don’t Smoot the Weasels.

For Discussion. Would the U.S. be better off or worse off in a world in which countries based their trade policies on these sorts of political calculations?