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Free trade is anything but free; it hurts national security |
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Written by Bryan McCanless ::
April 5, 2002
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Aaron Schavey of The Heritage Foundation, in a March guest column, argued that there are many benefits of free trade, disregarding our President’s current Economic Report, which says trade deficits slow down the U.S. economy. Because the trade deficit is annually running around $350 billion, with 25,000 jobs lost for every $1 billion of trade deficit, we don’t agree.
History teaches us that dominant nations who embrace free trade cease to be dominant; they lose their economic prosperity and power.
Thomas Jefferson was a free trader prior to the War of 1812. He allowed the military and defense of America to decline because of our involvement in trading with foreign nations. We thought we were going to be the one big, happy family the world over, until the War of 1812.
After Thomas Jefferson almost lost the War of 1812, he became a trade protectionist. Jefferson stated, “As long as I am President, America will not import anything we can make for ourselves.” The War of 1812 taught Jefferson that international trade is a national security issue.
In his article Aaron Schavey used as examples Chrysler in Toledo, Ohio, and Awareness Technology Inc. of Florida as supposed beneficiaries of free trade. The Chrysler plant was cited as producing one in four vehicles overseas, and Awareness Technology was cited for its sales increase of $5.2 million from 1995 to 1999 with three-quarters of jobs supported by overseas sales.
What the article doesn’t say is that those few jobs created don’t begin to offset the millions of jobs lost as a result of free trade.
Schavey continued to name so-called benefits of free trade by mentioning that 2,400 foreign firms are operating 5,700 businesses in the United States. However, 5,700 foreign firms don’t even represent a quarter of one percent of the 24 million businesses in the United States. Therefore, no economic benefit is possible.
Schavey claimed that foreign businesses paid on average 12 percent more than American firms, and they helped Americans enjoy lower prices. That is simply not true. Aaron Schavey doesn’t provide any documentation for this false assertion.
In his article, Schavey stated that foreign companies open plants that buy American-made parts and steel, creating more jobs — a free trade benefit. This is not free trade benefit at all since American manufacturing profits would produce capital formation, creating more jobs and wealth, foreign plants just ship profits back to their own countries.
Another questionable claim made by Schavey was that high tariffs make American jobs less secure. The fact is, the Founding Fathers of America believed in the protective tariffs. It is the abolition of tariffs and the promotion of free trade that makes jobs less secure. Schavey got it backwards.
As an example of the danger to American national security, foreign nations we trade with, such as China, have used money from trading with America to purchase nuclear missiles which are now aimed at American cities. Obviously, this is a free trade benefit to foreign countries, not America.
Schavey stated that economic policies should benefit as many people as possible. He believes policies that promote free trade do that. However, the current economic report of the President says that trade deficits slow down the American economy. When the economy slows down, we see an increase in unemployment, bankruptcies, and financial strain on families and individuals. Clearly, free trade produces economic policies that do not benefit everyone.
Manufacturing job have a net loss; they have not remained constant as Schavey claimed. An increase in manufacturing jobs would be a better goal than remaining constant.
Imports jumped from $62 billion in 1950 to $1.3 trillion in 1999, coinciding with the most rapid streamlining of manufacturing procession in world history. This streamlining of manufacturing caused the loss of manufacturing jobs, putting Americans in a financial bind. Americans are deeply in debt, thanks in part to declining income due to job loss brought to us by free trade.
Schavey stated that foreign trade brings cheap products for Americans to buy, saving the average family $2,040 in savings. The facts is, those illusionary savings aren’t doing the average family any good, because the average family is drowning in debt.
There is simply no way to justify free trade agreements. The benefits are too few. The hazards are too great.
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