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THE FAST TRACK TO FREER TRADE

by Daniel T. Griswold

Introduction

Americans suffer a kind of schizophrenia toward trade with other nations. We

export more goods and services than any other nation, yet we endlessly worry about our

ability to "compete." Our economy has created millions of net new jobs since 1980,

during a time of dramatically rising imports, while many Americans still believe more

imports mean fewer jobs. In the 50 years since the signing of the original General

Agreement on Tariffs and Trade, Western nations have enjoyed a historic period of peace

and prosperity, yet the debate about trade today is full of the metaphors of war.

The current controversy in Washington about granting the president fast-track

authority for trade negotiations contains the same paradox. The flow of goods, services,

and investment across our borders is booming, incomes are rising, and the unemployment

rate has fallen to a 25-year low. Yet the public is ambivalent about free trade1 and

Congress is deeply divided on renewal of fast-track authority.

Failure to pass fast-track authority to reduce trade barriers would be a mistake.

Congress should approve the authority for the president soon, without the baggage of

environmental and labor language. If Congress fails to pass a clean fast-track bill,

agreements to liberalize trade will be virtually impossible for the president to negotiate.

Progress toward freer trade, economic integration, and a more efficient and prosperous

U.S. economy will be hindered.

Free Trade and America's Future

Free trade, like the free market in general, allows people to live freer and more

prosperous lives. A policy of free trade reduces the power of government and special

interests to dictate the shape of an economy, leaving that task to the countless daily

decisions of decentralized producers and consumers in the global marketplace.

Free trade among nations increases global prosperity by allowing people to

specialize in what they produce relatively more efficiently. As Adam Smith argued more

than two centuries ago, it would be foolish for a family to insist on making its own shoes,

tailoring its own clothes, and growing all its own food when it could buy them more

cheaply from the shoemaker, tailor, and farmer. "What is prudence in the conduct of

every private family, can scarce be folly in that of a great kingdom. If a foreign country

can supply us with a commodity cheaper than we ourselves can make it, better buy it of

them with some part of the produce of our own industry, employed in a way in which we

have some advantage."2

Daniel Griswold is director of trade and immigration studies at the Cato Institute.

2