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The Folly Of Government-Run “Free Trade”

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AMERICA’S ALPHABET SOUP TRADE DEALS ARE NOT “FREE”

|| By FITSNEWS ||  We’ve received several messages from elected officials of late questioning our opposition to TPA and TPP.  For those of you busy with real life and unhip to the D.C. alphabet soup, TPA is “trade promotion authority” – or “Fast Track.”  It refers to the ability of U.S. president Barack Obama to unilaterally write and enforce TPP, which is the “Trans-Pacific Parternship,” a massive trade deal with Pacific Rim nations.

TPA is a process by which the U.S. Congress would surrender its role in American trade negotiations to Obama … while TPP is a deal which would basically endorse foreign currency manipulation, subsidize the outsourcing of U.S. jobs and erode America’s rule of law.

Collectively, we refer to the two proposals as “Obamatrade.”  And we’ve been adamant in our opposition to both.

According to some of our leaders, though – who communicate regularly on such matters with us – opposing TPA and TPP is inconsistent with our stated support for free market economics, which includes free trade.

Really?

We hate to break it to our “free market” brethren (ahem, Mark Sanford) but there is a huge difference between “free trade” and what American has now – which is managed trade (if we’re being polite) and corporate whoring at the expense of U.S. workers and consumers (if we’re being honest).

MARK SANFORD

MARK SANFORD

What, then, is “free trade?”

For that, we need to look to the most ignored document in America these days … the U.S. Constitution.  According to Article I, Section 9 of our nation’s founding (now all but forgotten) document – “free trade” is what the framers explicitly envisioned for the states of the union.

“No tax or duty shall be laid on articles exported from any state,” they wrote.  “No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another: nor shall vessels bound to, or from, one State, be obliged to enter, clear, or pay duties in another.”

That is free trade …

What wasn’t free trade?  The 1994 North American Free Trade Agreement (or NAFTA).  That deal – “fast-tracked” for the administration of former U.S. president Bill Clinton – was aggressively pushed by the same “pro-business Republicans” currently backing Obamatrade.

In November of 1993 – before the deal passed – these establishment types joined together under the banner of the National Association of Manufacturers (NAM) to tell us how NAFTA was critical to the creation of hundreds of thousands of new U.S. jobs.   One report even projected it could create 170,000 new positions within the first two years of its implementation.

What did NAFTA really do?

Several things (none of which were good): According to a report released last February, the agreement exploded America’s trade deficit by 580 percent, cost the country a million jobs, doubled immigration from Mexico, sapped middle class wages and perpetuated income inequality in our country.  How’d it do all that?  Easy: By carving out new protections for foreign companies looking to move jobs out of America – the same “subsidized outsourcing” that is at the heart of Obamatrade.

BARACK OBAMA

BARACK OBAMA

In fact Obamatrade is NAFTA on steroids – especially when (not if) China joins the party.

The adverse impact of NAFTA on the U.S. economy isn’t up for debate.  Nor is the adverse impact of TPP – even though the same big corporate chieftains who pushed the former deal are making the same promises again this go-round.

The question is whether opposing something that’s demonstrably bad for American workers and consumers is somehow inconsistent with our stated free market ideology.

Well, we’ve got a three-word answer to our critics:  It is not.

NAFTA did promote international competition – but only up to a certain point.  It didn’t eliminate tariffs, it manipulated them for the benefit of specific corporations.  It also extended government-granted monopolies via patent and copyright “reforms” (similar to the Hollywood handouts envisioned by Obamatrade).  Additionally it created environmental and labor bureaucracies – and empowered them with the ability to levy sanctions and fines.  All while shredding the rule of law related to disputes involving American corporations.

Any of that sound like “free trade” to you?  Of course not.

As much as its supporters insist otherwise, NAFTA picked winners and losers in the marketplace.  If you were an executive at a foreign or U.S.-based corporation able to lower your bottom line (and pad your profits) by accessing cheap labor in Mexico, you won.  If you were an American worker looking to hold onto your job and your salary, you lost.

And if you were an American consumer sold on the allure of cheaper goods … chances are you lost too.

“U.S. workers without college degrees have lost roughly 12.2 percent of their wages – even after accounting for the benefits of cheaper imported goods,” columnist Leo Hendrey, Jr. wrote recently for Reuters.

Free trade doesn’t require laws (beyond basic property protection provisions).  It doesn’t require manipulation, regulation or coercion. It simply requires letting the market work.

In fact, it is utterly baffling that those who support such demonstrably harmful “rigged trade” deals would accuse us of being opposed to “free trade.”

We’re not … they are.

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