Going protectionist over a fantasy highway

The U.S. is known for its “paranoid style” of politics, so brace yourself for the next Big Scare coming down the pike (literally) -- the Trans-Texas Corridor. Isolationist conservatives, emboldened by their jihad last year against the Dubai Ports World deal, have identified this road project as the spearhead of a conspiracy to dissolve the United States of America.

The corridor is a proposed two-phase project meant to ensure that the Lone Star State has the transportation infrastructure necessary to handle the growing international commerce coming across the border. The 1994 North American Free Trade Agreement has doubled U.S.-Mexico trade, three-fourths of which flows through Texas. And the movement of goods through the state is expected to increase exponentially in the near future as Asia routes more exports through the newly expanded Panama Canal.

Texas awarded a planning contract in 2005 for the first phase of the corridor to Cintra, a Spanish multinational company, and its San Antonio partner, Zachry Construction. (Cintra also won a $1.3-billion contract last year to build a 40-mile extension of Highway 130, a state toll road connecting Austin to San Antonio that was conceived separately from the corridor, although conspiracy activists claim otherwise.) The first 600-mile section, planned to include such features as tollways, freight-rail and truck-only lanes, will run parallel to the cramped, north-south Interstate 35 from the border town of Laredo to Oklahoma. Construction contracts for that portion haven’t been awarded.

The second phase of the corridor, whose planning contract has yet to be handed out, would build a similar highway from the western edge of the Mexico border to east Texas. This might one day link to a separate, federally initiated eight-state expansion of Interstate 69, which currently runs between Port Huron, Mich., and Indianapolis.

This is all too sinister for Jerome Corsi, the Vietnam War veteran who helped lead the Swift Boat charge against John Kerry. Corsi has knitted disparate strands of each of these separate road projects to help convince fellow xenophobes such as Pat Buchanan, Phyllis Schlafly, Lou Dobbs and the John Birch Society that the corridor is the first leg of a secret federal project called the NAFTA Superhighway, a four-football-field wide monstrosity that would run from Mexico’s Yucatan to Canada’s Yukon.

Never mind that I-69 originated in a 1991 federal transportation law -- pre-dating NAFTA -- and that the planning for the Trans-Texas Corridor has been fully documented on the Web.

Yet even Texas Rep. Ron Paul, a libertarian Republican candidate for president, has fallen for the paranoia. You’d think that Paul would be chanting hosannas to anything that facilitates free trade, but he too fears that the “superhighway” is part of a scheme by foreign companies to erode U.S. borders and create a North American Union combining the United States, Mexico and Canada -- complete with a single government and a common currency called the “amero.”

Superhighway opponents regard even routine dialogue between the three neighbors as a treasonous assault on U.S. sovereignty. They are apoplectic about the Security and Prosperity Partnership of North America (SPP), a forum created in 2005 for bureaucrats to discuss such radical topics as how to snag terrorists before they enter the continent and how to speed up cross-border traffic for just-in-time deliveries.

All of this could be dismissed as the paranoid rantings of a protectionist fringe -- except that it is beginning to have a tangible negative effect on public policy.

Montana’s Legislature this summer overwhelmingly passed a resolution condemning the superhighway and any union of the three countries, and 18 other states are considering similar legislation. El Cajon Republican Rep. Duncan Hunter successfully amended the 2008 Transportation Appropriations Act to prohibit use of federal funds for any SPP working group. Virginia Republican Rep. Virgil H. Goode Jr. has introduced a House resolution against both the mythical superhighway and the fantasy union.

After the Dubai Ports debacle, in which anti-terrorism hysteria forced Congress to thwart the transfer of U.S. port management leases held by a major British ports operator to a company based in Dubai, the atavistic idea that foreign investment erodes American sovereignty is back into vogue.

Hunter, for instance, has added hoops to the review process that foreign bidders for U.S. companies must go through to prove that they’re not a national security threat. This limits the pool of buyers for U.S. companies, thereby lowering their value and the value of 401(k) plans that invest in them. Hunter has also extended the review process to foreign companies vying to build “critical infrastructure.” Should his definition include transportation projects, state governments would be deprived of crucial capital and knowledge to modernize their infrastructure.

The paradox of protectionism is that it damages the very thing it seeks to protect. Labor unions, for example, almost killed U.S. auto and steel companies by helping erect barriers against foreign companies, which made domestic products globally noncompetitive. But the impact of today’s isolationists threatens to affect the entire economy. If unchallenged, these ideologues of fear will kill the United States’ prosperity in the name of protecting its sovereignty.

Shikha Dalmia is a senior analyst and Leonard Gilroy is a senior policy analyst at the Reason Foundation.