August 11, 2015

How free trade hurt America

Economy in Crisis - “Free trade” has essentially led to the most massive wealth transfer in the history of the world. The United States has not witnessed a trade surplus since 1975, and since then trillions of dollars have been lost through trade deficits caused by “free trade” on our end and protectionism on the other. The most significant flaw with all of our “free trade” agreements is that they are impossible to enforce, and because of this competition is impossible. “Free trade” depends on the premise that all countries will play by the same rules. However, in the real world, assuring that this occurs is incredibly expensive, time-consuming and inefficient to contest. We have simply been unable to create a universally free market. Like communism before it, true “free trade” works only in theory, on a large scale and when utilized by all.

The reality is, tariffs are not the only barrier to fair trade. Trade is impacted by much more intangible state-sponsored “trade weapons” such as currency manipulation, technology transfer requirements, joint-venture policies, selective customs policies, underhanded government subsidies and countless other tools. Under “free trade” agreements, the U.S. essentially relies on faith-based economic policy with other countries. We agree to play ball by the rules and, because of the nature of the game, are unable to ensure that others play fair.

Without the presence of tariffs, a “free trade” agreement places the country with lower overall wage rates in a superior position. When two countries with huge differences in labor costs engage in “free trade” eventually all the production that benefits the country with higher wage rates will be transferred to the country with lower wage rates. This is not theoretical—it has happened in China. The transfer was supposed to be offset with lower prices being enjoyed by our consumers, but in actuality it has led to the destruction of the manufacturing capabilities of the United States and a wider disparity in income among our citizens.

1 comment:

Capt. America said...

Free trade works for the rich only, no matter how "fair" it is. Free trade is trade war. No difference whatsoever. The U. S. has become a poor country with a few rich people in it.