For many years, it was “fashionable” in the world of international commerce to be considered a proponent of free trade. In principle, free trade means that market forces – not artificial trade restraints, such as tariffs and quotas – are the best means for nations to ensure vibrant domestic and international economies.
Just ask Japan, which trade analysts in the early 1980s were forecasting would soon crush American economic interests. Thanks to Japanese protectionism, which walled off both its domestic and international markets over the next two decades, the island empire’s economy remained frozen in concrete, unable to adjust to market forces. While the U.S. economy went through its ups and downs, it remained flexible and was able to adapt better to changing conditions. But Japan, with its rigid and corrupt system, stalled in what now is nearly a 20-year-old recession.
So why, then, even if America has fared better than Japan, is it no longer fashionable to for Americans to worship at the alter of free trade? The answer is simple: Many of our trading partners, such as China, Brazil, Canada and Mexico, have not ceased using government-applied price controls, quotas, tariffs, onerous regulation and the failure to protect intellectual property rights as a means to distort trade and commerce. While we Americans, in our infinite naivete, talk of open markets, trading partners such as these have other ideas.
Their trade negotiators – perhaps more skilled in the “art of the deal” than our own – have won trade concessions from American diplomats, without having their own countries’ sufficiently reciprocate by opening their markets. As a result, trade treaties such as NAFTA, GATT and the U.S.-Chile Free Trade Agreement – which in theory should equally aid all signatories – have been skewed against American interests, increasing foreign imports into our country without sufficiently promoting our exports. And, American trade negotiators have failed in other respects as well.
Perhaps the best example of America’s weak trade diplomacy is found in the reasons behind the recently enacted and fiscally irresponsible Medicare legislation. In their infinite “wisdom,” U.S. Senate and House leaders enacted legislation which amounts to a $534 billion tax on American consumers to help pay for and, in effect, subsidize the high price of pharmaceutical drugs sold domestically.
The reason that Congress opted to bust the budget with handouts to the needy, rather than force competition in the drug industry, which would have lowered the price of drugs without taxing the people, stems not only from powerful drug-industry lobbyists having lined the pockets of senators and representatives with campaign contributions and other forms of legalized “bribery,” but from the failure of U.S. trade negotiators to demand that foreign countries remove controls on the maximum price of drugs sold overseas.
Over the years, American drug manufacturers moved about 70 percent of their production facilities overseas, where products could be manufactured more cheaply. However, while American drug companies were “off sourcing,” the foreign host governments, which installed socialized systems of medicine, were preventing U.S. pharmaceutical interests from allowing the market to set prices. As a result, in most countries, American drug companies are forced to sell the same product for half the price U.S. consumers can buy it.
In effect, the reason American drug companies are charging U.S. consumers double is because they cannot get a reasonable price for their product overseas. Rather than demand, under threat of sanctions, that the foreign governments remove the price ceilings on drugs – and allow the market to set prices domestically and internationally – our trade negotiators have “rolled over.”
Given that our Senate and House leaders have spent the country into bankruptcy, a strong trade policy is all the more important. Not only should American companies be encouraged not to send production facilities and jobs overseas by “outsourcing” through various incentives to retain production facilities in the United States, but our trade negotiators must be “set free” to drive a hard bargain to ensure that trade relations are fair, not simply free.
What is free is rarely worth anything – and this can be said of not only our congressional leaders, who hand out hard-earned taxpayer money like drunken sailors, but our trade negotiators, who have given away the store to foreigners.
As a former international trade lawyer, Reagan Justice Department prosecutor, chairman of Judicial Watch and, God willing, Florida’s next U.S. senator, I will not allow either Congress or our trade negotiators to sell out American interests, particularly without getting equal value in exchange from foreign countries. What counts is fair trade. Free trade is out! The well-being of our economy and our citizens is at stake.
A vibrant economy, with jobs for all Americans, and a return to Judeo-Christian values and ethics, along with a strong national and homeland defense, are the keys to preserving liberty.