Commentary

Teach the Facts on Free Trade

After 18 months of wrangling, deal cutting, and capitulating to protectionist pressures, the Bush administration has finally secured the authority to pursue trade deals without concern that Congress could pick apart the agreements’ carefully negotiated provisions. While Trade Promotion Authority, or TPA, is vital and may lead to new agreements, the process of securing TPA did nothing to refute the myths or assuage the misgivings about trade. Instead, it endorsed those myths and misgivings.

By making side deals to protect textile producers, expanding benefits for workers “displaced” by trade, and agreeing to close congressional oversight of possible changes to the antidumping law - perhaps the most important offering at the negotiating table — trade advocates are compelled to answer: If liberalizing trade is so good, why build all the bomb shelters?

Some argue that kowtowing and compromise are essential to the legislative process, but seldom do the compromises reflect such lack of faith in the primary legislation and its objectives. This lack of faith is based, not on fact or objective analysis, but on the failure of trade advocates - in the administration, Congress, and the public policy community — to effectively challenge and expose the fallacies of trade’s detractors. Unfortunately, the goal of securing TPA at all costs involved suppression of honest trade advocacy in favor of a strategy to purchase protectionist quiescence.

Honest trade advocacy is not preaching the virtues of free trade to the world, and then agreeing to an elaborate web of safety nets to mitigate its presumed damage. It is not actively pursuing worldwide steel capacity reduction, while subsidizing U.S. producers with import barriers. It is not lambasting European and Japanese farm policies, then lavishing America’s bloated agro-businesses with massive subsidies. It is not acknowledging the connection between economic stagnation and terrorism, and then refusing to liberalize market access to Pakistani apparel exports. It is not endorsing the idea that workers who lose their jobs because of trade are more important than those who lose their jobs to domestic competition, technology gains or bad corporate governance. It is not promoting trade as a means for developing nations to develop, and then making it harder for them to export their most competitive products. These actions foster legitimate doubts, here and abroad, about the benefits of free trade.

The slope is steeper now, but all is not lost. It is incumbent upon President Bush and his trade representative, Robert Zoellick, to not only pursue and secure trade deals, but to blaze a trail that enables trade advocates to take the offensive. The central question of trade policy must be: Why should we barricade our markets and expose our businesses and consumers to higher prices and limited choices? Not: Why should we dismantle our trade barriers and expose our producers to foreign competitors? Protection of domestic industries is not an entitlement. It is costly and should be the remote exception.

Bush and Zoellick must argue the facts and be willing to engage dissent: Open economies are substantially more prosperous than closed ones; strong import growth is a sign of economic strength, not weakness; countries must export to afford our own exports; industries like textiles and sugar are not entitled to their perennial protection, which taxes America’s poorest families most adversely; workers who lose jobs because their industries are not competitive internationally, and who seek reemployment, usually find higher paying jobs in other industries before their unemployment insurance expires; steel tariffs imposed last March had nothing to do with dumping or “unfair” trade; trade agreements don’t degrade the environment; current antidumping regulations are blatantly protectionist and must be revised, and on and on. The facts are in the public domain. The facts are on their side. The record must be set straight once and for all.

They should not shy away from debate on these issues. Attempting to sweep criticism under the rug by lavishing subsidies or granting exemptions only ensures that the problems will fester and resurface. They must discredit the charlatanism of reckless professional protest groups like Global Trade Watch, which desperately attempts to equate trade agreements with perquisites for white-collar criminals. They must challenge hardcore protectionists like Robert Byrd (D-WV) who is incapable of admitting that factors other than imports have led to a reduction in the size of the steel industry. They must compel the casual protectionists in Congress to do their jobs better and read beyond the executive summaries into the facts and the arguments, so they can see for themselves that the rhetoric of “level playing field” and “unfair trade” are nothing more than populist smokescreens for traditional protectionism.

Until the terms of the debate are wrested from trade’s detractors, advocacy of trade liberalization will have a defensive tone. The process of securing TPA ignored this requirement. That must change starting now.

Dan Ikenson is a trade policy analyst at the Cato Institute.