Free Trade Frenzy Leaves Me Wondering What’s Really Going On

I am puzzled by the urgency of President Bush’s appeals to Congress to approve a flurry of free-trade agreements. I know somebody must benefit from the pacts, but who? Certainly not the United States of America!

I realize that when we let foreign products into America without charging tariffs, American shoppers save a few dollars. But what are we going to sell to these countries in return? I don’t think the South Koreans will drop their tariffs on American cars, for example. And even if they did, do you think Koreans would buy an American car instead of a Hyundai? Most Americans won’t do that.

Why is Bush so eager to do away with American tariffs? To me, tariffs represent one of the most effective tools a government has in implementing its policies. I don’t know what the situation is today, but when I was a boy in Jamaica, there was some kind of deal that allowed salted codfish from Nova Scotia – and a few other staples – into the island duty-free (or at a very low tax rate). The result was that even the poorest Jamaican could count on getting enough salt-fish and ackee, stewed peas, pickled herring, and so on, to keep from starving. On the other side of the coin, alcoholic beverages that competed with native-made rum were – if my memory can be trusted – heavily taxed to give the local product an advantage.

chineseI concede that abolishing tariffs lowers consumer prices – but at what cost? The actual price of buying a Chinese-made pair of shoes at Wal-Mart is measured in shuttered American factories and lost American jobs. And what do we have that China might want to buy? Not much. We even import fish, milk and dog food from China (Chinese fish farm shown in photo at right). And what do we send them? Pieces of paper emblazoned with some past President’s picture, which the Chinese send back to America as loans to keep our government functioning.

If Americans grew more food than we could eat, I would see where open markets around the world would be desirable. If we made cars that other countries were clamoring for (as they did once), I could see some sense in promoting free trade. Indeed, if we had a robust manufacturing base, there might be justification for the free-trade frenzy.

I could understand Great Britain’s concept of the metropolitan state, where the far-flung empire produced raw materials, which were processed in the Motherland and exported back to the colonies as finished goods. The argument was that there were economies of scale in that process that made it more practical than manufacturing raw materials in the colonies themselves.

The British metropolitan state is long gone. There is not one English-owned car manufacturing company left, for example. But the concept made Britain very rich for a long time. You would think from the Bush free-trade policy that America was a metropolitan state, but you would be mistaken. It is China that has become the metropolitan state, with other Asian countries emerging as its competitors. (For example, China buys mostly commodities such as copper, soybeans, iron ore and fish meal from Latin America, and sells sophisticated goods to the region in return.) America increasingly relies on foreign-made products, while a purely service-based economy evolves at home. To me, that’s a road to disaster.

The real beneficiaries of America’s free-trade policies are global corporations, which have no nationality or loyalty to any one country. The corporations are free to find the cheapest labor and the most indulgent governments. They are able to ignore environmental and health standards, employment benefits and human rights in order to maximize the return on their investment.

So I ask myself: Is George Bush really the President of America? Or does he represent a global power elite that recognizes no borders and cares for nothing but their own profits? And where does he go from here? Is his reward awaiting in some palatial board room somewhere? But how in the world will he sleep at night?