Free Trade's Hidden Price

Saturday, March 1, 2003

Free Trade’s Hidden Price by Pat Choate (NAPSA)—Which trade policy most benefits the people of the United States—free trade or protectionism? Considerthis: For almost two centuries, the United States government defended its industries against predatory foreign trade _ practices and Ameriy can workers against penny-wage foreign labor competition. Consequently, the U.S. economy grew ' vigorously, workers’ Pat Choate ——_——_ incomerosesteadily and American factories produced virtually everything needed for our national defense and that of our allies. And America became the world’s largest creditor. In the two decades following the implementation of the Tokyo Round GATT Agreement in 1979, the United States used a free trade agenda. The result has been an accelerating liquidation of the U.S. economy. Where the U.S. once produced nearly all of the manufactured goods it consumed, it now imports more than half. Once its domestic companies dominated global industries such as consumer electronics, machine tools, apparel, textiles, shoes, steel, automobiles, fasteners, computers, among a host of others. Now, the over- whelming majority of companies in those industries are eithercrippled or headed to bankruptcy. One result is the United States now suffers trade deficits of more than $1.5 billion per day. Another is that America has become the world’s largest debtor. Equally destructive, these free trade policies are destroying more than traditional U.S. manufacturing jobs. Now in the so-called “Third Wave”of globalism, U.S. corporations are exporting their back office work—the jobs that constitute the backbone of most corporate headquarters, such as accounting, insurance, financing, engineering, design, computing, software development and architectural services. As to the great trade debate between free trade and protectionism, America accumulated great power and wealth when it defended its industries and workers. But since the adoption of a free trade global strategy, America has been consumingits wealth and exporting its best jobs and industries. Which trade policy is best for America now? We think the answeris obvious. Pat Choate is director of the Washington, DC-based Manufacturing Policy Project.