Americans can be forgiven if they're a little confused
about free trade. After all, many of our leaders certainly
are.
In the last year, various members of congress have introduced more
than 250 specific bills to waive tariffs that harm their
constituents. Clearly these leaders understand that lowering
tariffs (a key component of free trade) on an industry-by-industry,
state-by-state basis will improve the economy.
Yet when given the chance to lower tariffs in a more efficient way
-- through comprehensive trade agreements with other nations --
many of these same lawmakers seem to forget what they know about
the benefits of freer trade.
It's a puzzling contradiction. Congress might as well decree that
feathers make sense, but birds are dangerous.
You can see all this at play in Massachusetts. A Lowell Sun article
recently revealed that the commonwealth's two senators have
introduced no fewer than 17 "suspension of duty" bills that
directly lower tariffs paid by some state businesses.
In an effort to "help Massachusetts companies get a fair shake" and
help local firms "be as competitive as possible in the national and
global marketplace," Sens. Kerry and Kennedy want to drop tariffs
on many things, including leather, rubber and synthetic basketballs
and volleyballs.
They rightly note that U.S. trade barriers raise the cost of doing
business. Lowering these barriers for Massachusetts will "grow the
work-force and save consumers money." Yet both men opposed CAFTA,
the 2005 agreement to expand free trade throughout the
Americas.
In fact, lowering tariffs across the board would promote more
competition and more efficient use of resources. If lowering
tariffs for a golf-club manufacturer in Massachusetts is good, then
it follows that lowering tariffs will be good for all U.S.
golf-club manufacturers.
For some 50 years, the free-trade movement has largely flourished,
and the U.S. and the world have reaped the economic benefits.
Indeed, the U.S. government has been a leading advocate of trade
liberalization.
In the coming months, Congress will need to ignore the siren song
of protectionism and look beyond state borders. Free trade
agreements with Oman and Peru, for example, will be on the table
and lawmakers should objectively debate and then approve them. They
also should continue to support U.S. leadership and negotiations
for new bilateral agreements and in the World Trade Organization
(WTO) Doha Round.
As former U.S. Trade Representative Rob Portman recently said, "We
all must fight the protectionist forces with the facts, which show
that benefits from trade are substantial."
The $12 trillion U.S. economy is bolstered by free trade, a pillar
of America's vitality. American exports support one in five U.S.
manufacturing jobs. Jobs directly linked to exports pay 13 to 18
percent more than other U.S. jobs. Moreover, agricultural exports
hit a record high in 2005 and now account for 926,000 jobs.
Because today's global economy offers unparalleled opportunities
for the U.S., it is in America's economic interest to expand trade
by lowering barriers. Freer trade policies have created a level of
competition in today's open market that leads to innovation and
better products, higher-paying jobs, new markets, and increased
savings and investment.
Free trade can lift America's already high living standards if
trade barriers can be broken down further. Gary Clyde Hufbauer of
the Institute for International Economics estimates that trade
liberalization over the last 50 years has brought an additional
$10,000 per year to the typical American household.
If all trade barriers were eliminated and global trade and
investment became truly free, Hufbauer estimates American
households would gain an additional $5,000 per year.
Freer trade enables more goods and services to reach American
consumers at lower prices, giving families more to save or spend on
other goods and services. Moreover, the benefits of free trade
extend well beyond American households. Free trade helps spread
freedom globally, reinforces the rule of law and fosters economic
development in poor countries.
Despite more than five decades of evidence demonstrating the
benefits of liberalizing trade, the impact of international trade
and open markets on the U.S. economy somehow remains a contentious
national issue. Fortunately, in past battles, free trade won the
day, providing greater economic opportunity to Americans and
allowing the U.S. to maintain its role as a leader in the
international economic community.
Defending free trade and fighting for new trade agreements are
central tasks for Congress this year. Expanding global trade is one
of the keys to building a stronger economy at home and promoting
better relationships abroad. As that state's senators know, trade
is key to prosperity in Massachusetts. It's a pity they won't work
to share that prosperity nationwide.
Daniella
Markheim is the Jay Van Andel Senior Analyst in Trade
Policy at The Heritage Foundation.
First appeared in FoxNews.com