Free Trade Is Always Fair
Written by Brian Garst, Posted in Free Markets
First term Democratic Congressman Phil Hare has a piece at Politico calling for “fair trade.”
I certainly support free trade. But trade must also be fair. Unfortunately, the pending trade agreements with Peru, Panama, Korea and Colombia follow the same flawed NAFTA model that resulted in the hemorrhaging of good paying jobs in America and a race to the bottom in Mexico.
I have seen the effects of unfair trade policies in my home state. The manufacturing sector, historically a key component of a once-thriving Midwest economy, has seen 3 million jobs lost to NAFTA. And our trade deficit has gone from $100 billion to over $700 billion since its passage.
There are indeed many countries we trade with that utilize practices inconsistent with a free market. They place restrictive tariffs on American goods while demanding open access to U.S. markets. But those policies hurt themselves more than us, just like it would harm ourselves more than them if we retaliated in kind. Nor is it unfair for other countries to compete with our labor force. The benefit of cheaper labor is cheaper goods. Artificially protecting American labor is itself a form of “unfair” trade practice.
Claiming that we need to ensure that free trade is also fair underscores a sad misunderstanding of what free trade means. If it’s not fair, then it’s not free. It is right to demand that trade be fair, but we must remember that the best way to ensure fairness is to guarantee that it is free. And the way to do that is not through protectionism.
As one of eight freshmen in the House Trade Working Group, I am committed to fighting for a new direction on trade that protects American jobs while promoting labor and environmental standards. Fortunately, these two goals reinforce each other.
What Congressman Hare calls for is unfair trade in which “protections” are offered for such and such groups. Exactly the type of practices he would condemn in another country.