Free Trade: A Step Towards Revitalizing the Economy
According to Chris Frates’ article this morning in Politico,
After years of wrangling, labor and business groups are gearing up for an epic showdown over free trade this summer as President Barack Obama pushes Congress to approve pacts with Panama, South Korea and Colombia.
This is a debate we should all be aware of as it unfolds in the next few months because it will have far-reaching consequences in our economy that’s still showing signs of struggling.
Markets in the 21st century span the globe, bringing wealth and opportunity to people worldwide. Economic globalization is not a force that we can stop, nor should it be a goal of ours to interfere in the development of global markets — lest we end up with economic stagnation similar to the current state of North Korea.
Since the early part of this year, the president and Congress have appeared to be making it a priority to tear down some trade barriers keeping American businesses out of these global markets. Too little too late? Some think so.
The Council of the Americas submitted a statement to Congress saying,
U.S. reluctance to move ahead [with these agreements] has opened the door widely to interest from other nations now deemed, rightly or wrongly, to be more reliable. Some of those nations, like China, routinely lack the same emphasis or standards in terms of personal freedom, human rights, and transparency. This emerging reality is not just harming U.S. exports, it is also undercutting broader U.S. interests throughout the Western Hemisphere.
But to most, the proposed trade agreements with Colombia, Panama, and Korea are a start. And better late than never. The agreements would virtually eliminate market-disrupting tariffs with these key trade partners, creating opportunities for businesses and lowering prices for consumers in all the affiliated countries.
Critics, such as labor unions, say that removing the tariffs will be devastating to the United States’ job market as agriculture and manufacturing jobs move elsewhere. The AFL-CIO has already vowed to fight the measures and has already started mobilizing a grass-roots campaign effort against them.
What these critics fail to realize is that the loss of these sectors is not a bad thing! Tariffs artificially prop up industries that the market has decided need to go. By allowing competition to eliminate such legacy industries, capital and resources can flow to growing sectors instead. It is imperative that we shed those sectors that drain our resources, and nurture those that ignite growth.
This “creative destruction” is an inherent characteristic of the market economy, and the U.S. is better for it.
Someone, please, tell those critics.