Accompanying the president on his trip to China this week, U.S. Trade Representative Ron Kirk couldn’t resist repeating the old line that the United States is “the most open market in the world.” The chief U.S. trade negotiator was trying to rebut criticism from Chinese officials that the Obama administration, with its 35 percent tariff on Chinese tire imports and all that, has retreated from a commitment to free trade.
The administration’s “more open than thou” rebuttal is a weak one. As I write in Chapter 9 of my new Cato book, Mad about Trade:
If an Olympics were held for the most open economy, the United States would be out of medal contention. According to the most recent annual Economic Freedom of the World Report, people living in 26 other countries enjoy greater “freedom to trade internationally” than do Americans. The report considers not only tariffs on imports but regulatory barriers, exchange rate and capital controls, and actual levels of trade. Bragging rights for the most open economies belong to, in descending order, Hong Kong, Singapore, the United Arab Emirates, Chile, the Netherlands, Ireland, Hungary, Switzerland, the Slovak Republic, and Estonia. The United States lies back in the pack, in 27th place among the 140 ranked nations.
Despite the claims of openness, our government imposes significant barriers against imported clothing, footwear, leather products, glassware, watches, clocks, table and kitchenware, costume jewelry, pens, mechanical pencils, musical instruments, cutlery, hand tools, ball and roller bearings, ceramic wall and floor tile, railway cars, processed fruits and vegetables, rice, cotton, sugar, milk, cheese, butter and canned tuna.
Since the book was printed, a new Economic Freedom of the World Report has been published. The United States has slipped to the 28th “most open market in the world.”