‘Free’ Trade was Never Really About Trade
by Stan Sorscher
We need to think differently about trade.
First, let me say that I am 100% in favor of trade. Trade is when we do what we do best, they do what they do best, and we trade. Trade, done right, will raise living standards.
If trade is good, then free trade must be better, right? So consider this old joke about “free trade.”
- It’s not free.
- It’s not trade.
Twenty years after NAFTA we can add that it doesn’t work. It’s bad for millions of workers, families and communities around the world.
“Free trade” is not free. Our free trade policy encourages production to leave the country. We’ve lost millions of manufacturing jobs. More than 60,000 manufacturing plants were closed between 2000 and 2010 as production moved overseas. These costs are real.
“Free trade” is not trade. Basically, trade is when each country makes things of value for export and gets things of comparable value in imports. In modern globalization, other countries manipulate their currencies, use tax strategies that distort exports and imports, and apply effective well-designed industrial policies to build manufacturing capacity. They export more products to us, and import fewer products from us.
Our trade deficits since NAFTA are over $8 trillion. With trade deficits this large, we are not trading. We are letting other countries produce for us. We borrow, de-industrialize, and ultimately fail to capitalize on future production opportunities. That’s not trade. That’s getting picked clean.
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