This is why free trade is in trouble...

The ever-growing pet food contamination story is picking up steam. It seems the Chinese wheat gluten may have entered the human food chain.

Del Monte Foods has confirmed that the melamine-tainted wheat gluten used in several of its recalled pet food products was supplied as a “food grade” additive, raising the likelihood that contaminated wheat gluten might have entered the human food supply.

“Yes, it is food grade,” Del Monte spokesperson Melissa Murphy-Brown wrote in reply to an e-mail query. Del Monte issued a voluntary recall Saturday for several products under the Gravy Train, Jerky Treats, Pounce, Ol’ Roy, Dollar General and Happy Trails brands.

Wheat gluten is sold in both “food grade” and “feed grade” varieties. Either may be used in pet food, but only “food grade” gluten may be used in the manufacture of products meant for human consumption. Published reports have thus far focused on tainted pet food, but if the gluten in question entered the human food supply through a major food products supplier and processor, it could potentially contaminate thousands of products and hundreds of millions of units nationwide. [More]

When we talked about this on USFR last week, I was struck by the seemingly bizarre idea that we needed to import Chinese wheat gluten when our wheat farmers export about half their crop. How out of balance do economic systems have to be to make that work?

Update: why we import wheat gluten

All of this leads me to the conclusion that you can stick a fork in trade expansion talks. Free trade cheerleaders blithely assumed the losers would quietly go extinct, but somewhere in their calculations they underestimated how many there would be.

And the next time an economist explains patiently why free trade is good for (almost) all, ask him if he is on tenure. It makes a difference. Our academia has badly dropped the ball on educating and balancing the costs and benefits of free trade.

But on the bright side, think of all the wonderful papers they can write about the inefficiencies that are about to overtake us.