I am still troubled by the Wall Street Journal lead article on October 4, 2010 with the headline "Recession-Weary Americans Sour on Free Trade." I asked myself why would Americans who live in an economy built successfully on the principles of capitalism and free enterprise be against international trade? The WSJ article stated that a poll concluded that 53% of Americans said free trade hurt, rather than helped, the U.S. economy, a statistic that increased from 46% in 2007 and 32% in 1999. My bold prediction is that 2011 will be the year that the Obama Administration successfully finalizes free trade agreements with South Korea, Panama, and Colombia, and then Congress passes laws approving them.
Americans sometimes want their cake and eat it too. They want American companies to make and export more airplanes, more tractors, and more wheat and corn, all the while shopping at their local department stores and buying merchandise made in, and exported from, China, Indonesia, and Mexico. As stated in the WSJ by my law school friend Myron Brilliant, Senior Vice President at the U.S. Chamber of Commerce:
When we knock down [trade] barriers in those [foreign] markets, we create jobs here [in the United States]. We’ve got to trade to create jobs in our country.
Boeing employs tens of thousands of employees in the United States to produce airplanes to sell overseas. American farmers grow wheat and corn in amounts far beyond what could be consumed in the United States. Caterpillar sells more tractor equipment overseas than it does in the United States. According to CNN.com, the U.S. International Trade Commission has estimated that reducing customs duties in the U.S.-Korea trade agreement will increase exports of American goods to South Korean by at least $10 billion per year.
With the Republicans now in control of the U.S. House of Representatives, and the Democrats maintaining control of the U.S. Senate, it is my hope that both my Republican and Democratic friends who understand and appreciate the benefits of international trade will embrace free trade agreements. That sure would help achieve President Obama’s ambitions of doubling U.S. exports within 5 years. Customs duties imposed by the United States on foreign made, imported products, and customs duties imposed by Panama, South Korea, and Colombia on U.S. made products is really just another form of taxation. Since we all detest taxes, let’s join together and pass these free trade agreements in 2011.
From your blog to God’s ears…
Reducing trade barriers is a “win-win” only when accompanied by regulations ensuring that trade is fair. We benefit from low priced Chinese goods, but our addiction to them has been facilitated by currency manipulation by the Chinese government to which the world has largely turned a blind eye. At the cost of a net loss to good paying manufacturing jobs doubtless measuring in the hundreds of thousands, if not millions. Exceptions (Boeing, Caterpillar) notwithstanding.