The Iraq war will fade. The global economy will not. Trade is on the way to replacing war as the dominant international challenge. And countries that don't get that will suffer. Unfortunately, the presidential candidates, Republican and Democrat alike, insist on pandering to the fears of those who insist on "fair" trade instead of telling the truth that free trade is an irresitible force for which there is no immovable object. The one candidate who surprisingly, to me at least, seems most grounded in common sense on the issue is Barack Obama:
"Global trade is not going away, technology is not going away, the Internet is not going away. And that means enormous opportunities, but [it] also means more dislocations." In a 2005 essay he said: "It's not whether we should protect our workers from competition, but what we can do to fully enable them to compete against workers all over the world."
We can nudge trade with our agreements, but we can't realistically dictate the terms. The markets will be served:
It's widely assumed that trade opportunities will be unfair unless balance is negotiated with foreign governments. Not so. U.S. imports and exports are tied into an integrated market system. The economy must export goods (or sell off assets) to pay for the imports it chooses. Because the system pays for its imports with exports, reciprocity is automatic. If imports are taxed or obstructed, that acts as an obstruction to exports too. We need a president who is wise enough to recognize that protectionism impedes our exports as well as our imports.
The candidates should not forget that whatever Washington does will be imitated (or retaliated against) by other countries. What goes around comes around. It's up to the U.S. to set the best example.
Comments
Shades of MAX HEADROOM...and the "Corporate" Wars that drove their version of a possible future.
Life can still imitate art.
B.G.
Free trade is not inevitable.
As Pat Buchanan says, Free trade is the serial killer of industry and the trojan horse of transnational government.
The problem is that "free" trade has really become a euphemism for labor arbitrage. It is a way for multinationals to avoid regulation and short circuit wage growth
Does any one really believe that third world countries were going to buy US goods and services in any meaningful way?
The bottom line is that "free" trade and its cousin voodoo economics should be tossed on the scrap heap of history - it does not work for US workers and middle class.
Afterall foreign producers NEED the US markets to sell their junk, not the other way around
With my patchwork comprehension of globalization/free trade, it doesn't make sense that anyone's talking seriously about "enforcing" on behalf of American labor, or gearing American labor "to compete in the global market." What with the free movement of capital and labor across borders, is there even such a thing as American labor?
Not anymore Pete, unfortunately. Bcause of unfettered "free" trade the US is being reduced to a consuming rather than a producing economy, and a colonial exporter of raw materials rather than finished goods
So let's clarify AJ. You always have and will continue to be willing to pay substantially more for all your products as long as the products are made only here?
"Because the system pays for its imports with exports, reciprocity is automatic. If imports are taxed or obstructed, that acts as an obstruction to exports too."
Since when did we pay for imports with exports? That's called the trade deficit and we "pay" for it by borrowing massive amounts of money from foreign governments. Meanwhile the problem with nearly every single trade agreement we have is that OUR exports are obstructed by our trading partners.
"Free" traders need to realize there is no such thing - at least not in practice. Our workers can compete in the global marketplace if the politicians in DC didn't sabotage them every step of the way. Right now it's a completely uneven playing field because our government allows it to be.
The idea that the world will somehow shut American buyers out if we try and negotiate fair trade policies is not based in reality. The world needs American money - even if it is losing its value...