Another November is upon us, and one of the most pertinent issues
in American politics is not on the agenda. The revision of the global
economic order through free trade that has taken on an accelerated pace in the last
thirteen years is not being discussed. And the “free-trade”
agenda is taking a negative toll on the twin causes of social justice
and national security.
two sides of the issue are thus—one
would seek to place a tax on various imported goods (or “tariff”), for
the express purpose of ensuring U.S. based companies have a built-in
advantage over their competitors. The other side would seek to
eliminate these advantages and create a global free market through free
trade. The latter has been successful in getting what it wants. I think
their success has been bad for the United States.
Free trade is built upon a flawed
foundation. A free market presumes neutrality. The federal government
is neutral as to whether a textile plant should set up shop in
Massachusetts or South Carolina, because the United States is a
“free-trade zone” among our fifty states. But why should the American
government be neutral as to whether an auto plant is set up in Detroit
or in Mexico? While manufacturers cannot be forced to build a plant
anywhere, the government can steer industry to a desired end by a
tariff. If you build the plant in the U.S., you don’t pay the tariff.
If you go abroad and take advantage of cheap labor, that advantage will
be wiped out by the tariff. Our society has a stake in the free
decisions that industry makes—and therefore it is appropriate for our
trade policy to reflect that.
In the current global order, free
trade serves to create an economy geared more to retail and less to
manufacturing. Industrial and textile jobs go abroad in search of a
cheaper labor market, knowing there will be no penalty when it’s time
to ship the products back to the American market. Retail stores are the
beneficiary, as the cheaply made products (i.e., shirts) are shipped
back in. But the growth of the retail business does not compensate for
a loss of jobs in manufacturing. Retails jobs typically pay less and
are less likely to come with benefits. Hence, wages continue to stay
stagnant even during periods when unemployment rates are low.
shift has implications for national security as well. When the United
States starts effectively outsourcing its steel industry and its
computer industry, it is giving up economic sectors that are absolutely
vital to the military. Over time, this could have the disastrous
results if our nation is placed in a position of dependence on
countries that are either neutral or hostile to our security interests.
free trade movement has made steady progress since the end of World War
II, and that progress has only been accelerated the last thirteen
years. In 1993, Congress passed the North American Free Trade Agreement
(NAFTA), which drastically reduced tariffs on products coming from
Mexico. In 1994, the General Agreement on Tariffs & Trade (GATT)
was approved, ensuring the United States would participate in the World
Trade Organization. The WTO, as it is called, has been given the power
to regulate trade, and all the member nations agree to comply. Hence,
officials never elected by Americans are given the right to veto
congressional laws on the environment, wages and tariffs. And in 2005,
the Congress passed the Central American Free Trade Agreement (CAFTA),
which took the vision of NAFTA and expanded it further south.
of the promised benefits have taken place. Shortly after NAFTA was
passed, the peso collapsed, and then-President Clinton needed to
provide a $20 billion bailout to Mexico to prop it back up.
Manufacturing jobs continue to be lost. Prosperity has not come to the
Third World nations, as free trade proponents assured us it would.
Manufacturing jobs continue to decline in the United States, pushing
more workers into the retail markets.
Politically, neither party
has shown the will to confront this long trend towards free trade. In
an age characterized by fierce animosity between Republicans and
Democrats, the elites of both parties have been in almost astonishing
agreement as to the benefits of free trade. The monied merchant class
of the GOP has found common ground with the Limousine Left of the
Democrats, and it has come at the expense of the rank-and-file of both
That may be changing. The Democrats woke up one day and
had to figure out how they began losing the working-class vote. Last year, their
membership in the House of Representatives did not go along with CAFTA,
and it was passed over their protests. While I don’t support House
Democrats for other reasons (abortion, bioethics, and their psychologically
deranged hatred of the current president), this was a heartening sign
of a move in the right direction on at least one major economic issue.
Political necessity will eventually force the Republicans to rethink
their free trade agenda as well. The industrial state of Ohio used to
be a GOP stronghold, but President Bush had to fight down to the wire
to hold on to it (and with it the presidency) in 2004. In fact, had
Bush not made one key concession on trade issues—the imposition of
temporary steel tariffs in 2002—he may well have lost both Ohio and
West Virginia, and suffered a bigger defeat in Pennsylvania.
trade is the most important economic issue today. It defines the
structure of an economy. Republicans want to talk about cutting
taxes. Democrats want to talk about social programs. But whichever of
these approaches you prefer, both serve only to nibble around inside
the problem, without making the core philosophical change to alter the
economic structure. Providing American industry with real tariff
protection would advance the cause of social justice and working-class
incomes that so many rank-and-file Democrats worry about. Protecting
vital industries would advance the national security interest that
Republican voters care deeply about. So it’s time for voters to start
asking candidates about their views on this vital issue as another
election season beckons.