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.
