Trade Versus Security

Campus Report ^ | April 8, 2009 | Alanna Hultz

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Trade Versus Security

by: Alanna Hultz, April 08, 2009

Measures to ensure national security and consumer safety by regulating imports often come at the cost of reduced trade. David Hummels of Purdue University said at the American Enterprise Institute (AEI) recently that “economists believe free trade is welfare maximizing and mutually beneficial for both sides.”

He also said that free trade could produce economic gains and national security losses. He then went on to describe food security and discussed problems with the supply chain within China.

China has had contaminated baby food, toys and pet food and Hummels believes the border screening is inadequate. He said “the solution is to increase point of production inspections inside foreign countries.”

As a solution to the problem, Hummels proposed the 10+2 rule for cargo screening. The 10+2 rule requires imports to submit security fillings with data elements.

There are 10 elements that are required twenty-four hours before sailing and in addition to the ten, two elements will be required within 48 hours of vessel departure from the last foreign port. Hummels said “this will reduce the risk of smuggling drugs and bombs.”

Hummels also discussed costs and how time delays affect trade. He said “the value of trade by ocean is cheap but slow.”

“The airplane is a faster transportation mode but it’s expensive, but you pay more for speed to evaluate how firms value time,” Hummels said. “Firms exporting manufacturers pay an average of 0.8 percent of goods value per day to avoid time delays.” He suggested a new view that “non-tariff barriers are more important than tariffs in impending trade.”

Stewart Baker of the Center for Strategic and International Studies said that the “World Trade Organization talks had an enormous success in taking down tariffs.” ...

[veracious]

Absolutely hilarious. The worship of money, i.e., cost has made actual security (sanity), irrelevant. There are plenty hereon who don’t see any problem with our food, medicine and backbone industrial production being sent abroad. Many of them are even American citizens...