Free trade? Catch that thing. Wrap it up. Throw it in the garbage. That’s the tune of much of the presidential campaign this year and it leaves us wondering what would happen if some wrong-headed promises got translated into reality. Disaster, that’s what. Cruelty to the people, especially the poorest among us.
Among the candidates, there are a couple of especially scary ones on this topic, namely Donald Trump and Bernie Sanders. Trump wants tariffs that would likely lead to calamitous trade wars even though he himself has offshore clothing operations in Mexico and China. Sanders wants to ditch existing treaties, thinks they are a case of the rich getting richer while others suffer, and once said the following:
“I was on a picket line in the early 1990s against NAFTA (the U.S. trade deal with Canada and Mexico) because you didn’t need a Ph.D. in economics to understand that American workers should not be forced to compete against people in Mexico making 25 cents an hour.”
No, you don’t need a Ph.D. to reason about trade, but you do need at least a slight acquaintance with the facts. For starters, Mexicans today make $8 an hour in benefits and wages in the auto plants Sanders was discussing, and that’s not exploitation. It’s a major gift. Once, while living in El Paso, Texas, I crossed the Mexican border to tour some American-owned plants where most of the workers were women. For many, I learned, these were the only jobs available besides prostitution. They added immensely to the welfare of their families.
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The truth is that nothing has spurred wealth growth among the down and out more than the boom in world trade. Some undeveloped countries have experienced incredible economic growth, hundreds of millions have fled destitution and people are living much, much longer than ever before.
But what about people here? Aren’t they hurting because of trade? The obvious answer is that some operations do shrink or close as a consequence but the overall enriching of the economy boosts employment. Sanders contends that NAFTA has cost millions of jobs in the United States, but 31 million have been added since the deal was first struck, and some of that had to do with trade.
A major benefit of trade is lower prices, billions and billions of dollars of savings for shoppers, more a boon to the poor than all kinds of government programs. Sanders, a minimum wage-hike cheerleader, favors a host of policies that would raise prices every direction you look. What he does not grasp is that low prices are as important to higher purchasing power as are higher wages.
Error may be written into some of our trade deals, but there is not a one of these deals that does not profit us overall. Imports contribute mightily to our well-being, and the dollars spent for them will someday come back in a variety of ways, such as investment. Our exports? They are crucial to inspiriting the economy and creating work.
People say manufacturing has declined, but productivity and output have grown more here than just about anyplace else in the developed world. It’s true that jobs have been lost, but that is mostly because of improved technology, and there are tens of thousands of jobs unfilled right now because of inadequate training. High schools could do more to teach the missing skills and young people could turn more to community colleges at which Pell Grants pay tuition for the poor. Higher tariffs are a wish of union lobbyists and rent-seeking corporations looking for less competition to the detriment of consumers.
No, our trade arrangements are not picture-perfect, but they come closer to that end than the proposed policies of a couple of presidential candidates.
Jay Ambrose is an op-ed columnist for Tribune News Service. Readers may email him at email@example.com.