Trump and Clinton are Both Wrong: Free Trade is Good for People

Capitol Confidential ^ | 9/9/2016 | Jarrett Skorup

[MichCapCon]

If the government prevented people from shopping outside of their own town or state, they would be outraged and recognize it as limiting their freedom. If Michigan businesses were prevented from buying or selling their products to people from other states, most people would understand that to be economically destructive.

Yet when it comes to the issue of foreign trade a lot of people from both sides of the political spectrum are opposed to allowing a similar free flow of products and services between countries. That’s why the two main presidential candidates are able to run their campaigns with antitrade sentiments as key planks.

But international free trade is a good thing. It allows people to sell their products to a much larger group. It gives consumers more choices in what they are buying, making goods and services better and less costly because of the increased competition.

Antitrade sentiment often plays well politically in Michigan. Many people blame foreign trade for the loss of some jobs, though that was occurring before trade agreements were made and is more related to technological advances and labor laws. Even leftist economists at the Economic Policy Institute only blame NAFTA – the trade agreement most frequently cited as economically destructive – for the net loss of 43,600 jobs in Michigan, a state with 4.8 million jobs. This, of course, doesn’t make it any easier for the people who lost these jobs, but it nevertheless shows that even the highest estimates of the negative impact of NAFTA on Michigan workers can find only a minuscule effect.

But it is likely that trade leads to more jobs overall. A new report from The Heritage Foundation looks at trade as it relates to Michigan. In particular, it looks at the benefits from trade – the number of jobs supported by exports, foreign investment in the state, and jobs gained from trade agreements. Here are some facts from the report about trade in Michigan:

1. There are more than 14,500 Michigan businesses that export goods around the world, supporting almost 271,000 jobs.

2. Service exports have more than doubled in the last decade to $13.4 billion while total exports have increased to $53.2 billion. Transportation companies export $26 billion worth of equipment to 165 countries.

3. Since NAFTA was signed in 1994, the state has gained 281,700 jobs overall and has a lower unemployment rate.

4. Michigan is home to 1,733 automobile and auto parts companies, 26 percent of which are foreign owned.

5. The state imports $124 billion worth of goods, mostly from Canada and Mexico. This competition lowers the costs of goods for consumers and provides products for Michigan workers to sell.

6. Michigan has significantly increased its exports to Mexico (16 percent) and China (27 percent) in just the past three years.

7. The 30 percent steel tariffs imposed under the Bush administration harmed Michigan companies – the increase in cost made Michigan lose more jobs than all but three states.

Lowering trade barriers can provide new competition to businesses competing with foreign producers. But it also provides new opportunities for other local businesses, which might benefit from selling goods to new buyers in new markets. The historical evidence is overwhelming: Free trade always accompanies economic growth and prosperity, and countries that allow their people to take part are, on balance, much better off.

[VitacoreVision]

How the Free Trade Agenda Is Knocking Down America
-- The New American (PDF) Special Report
http://www.thenewamerican.com/files/TNA2917.pdf

The Special Report includes the following articles:

- The "Free Trade" Agenda Threatens Our Rights
- Global Merger: Piece by Piece
- The EU: Regionalization Trumps Sovereignty
- Trade Promises... and Trade Reality
- North American Union: From NAFTA to the NAU
- Fast-track: Enabler of the "Free Trade" Agenda
- Regional Scheme for the Pacific Rim
- EU/U.S. -- Transatlantic Convergence

[Vigilanteman]

Giving China (who has missiles aimed at us) the identical trade treatment as Japan (who is a faithful ally and has a reasonable balance in trade) is neither free trade nor common sense.

[JPJones]

But international free trade is a good thing. “

Yeah I love buying oil from muslimdom.

[1rudeboy]

Well, seeing that neither Japan nor China have a freetrade agreement with us, you have a point.

[VitacoreVision]

Trump Correct About TPP and China
http://www.thenewamerican.com/usnews/politics/item/21945-trump-correct-about-tpp-and-china

Is Trump Right About Trade?
http://www.thenewamerican.com/economy/markets/item/23145-is-trump-right-about-trade

Trump Attacks Clinton’s Support for NAFTA and Other Trade Agreements
http://www.thenewamerican.com/usnews/politics/item/23533-trump-attacks-clinton-support-for-nafta-and-other-trade-agreements

Trump Threatens to Leave World Trade Organization
http://www.thenewamerican.com/usnews/politics/item/23777-trump-threatens-to-leave-world-trade-organization

[JPJones]

Here are some facts from the report about trade in Michigan:”

Wow! I’m packing up the kids and moving to Detroit!

Oh wait......

[Blood of Tyrants]

It iw good so long as the countries you are trading with even the playing field.

[Amendment10]

Thank you for referencing that article MichCapCon. Please note that the following critique is directed at the article and not at you.

Note that free trade does not necessarily mean equitable, win / win trade. And Trump has repeatedly indicated that he is tired of incompetent federal lawmakers that make bad deals for the US, deals that screw citizens out of jobs.

[Mr. K]

When the hell did Trump say he was against Free Trade?

He is just against UNFAIR trade.

Like when a country uses slave labor to produce a product at a fraction of the cost to produce it here.

Hell we do that right hre- a state will find a nice successful business and ofer tax advantages to ANOTHER company to "start up" a similat producton facility- the new company gets tax breaks and the politician gets to brag about "creating jobs" but the original company goes out of business because he does not get the same tax breaks...

It's how a government pays back its cronies by letting them take over in a successful market without all that pesky self-risk. Or they use their tax code to do the same thing

Or they STEAL technology, and then start up a company which does not have to recoup those research costs.

[RegulatorCountry]

Free trade has been a boon to the underdeveloped economies of the world, but not so much to the developed economies. Loss of domestic employment in the developed economies has led to an increase in social spending and dependence upon government. Not everyone is cut out for a retail or service job. There is a tremendous issue with employment prospects for unskilled and even skilled labor. Yet, we keep bringing in more unskilled laborers by the hundreds of thousands every year. It won’t come to a good end, in my opinion.

Also, a major war breaking out in the future is a matter of when, not if, and being dependent upon imports for much of what was formerly manufactured domestically will prove to be a big problem.

It’s an ideological position, “free trade,” rather than an economic one. How so many erstwhile conservatives managed to convince themselves that transnationalism was the way to go, over the interests of their own country, is something of a mystery in hindsight.

[DiogenesLamp]

But international free trade is a good thing. It allows people to sell their products to a much larger group. It gives consumers more choices in what they are buying, making goods and services better and less costly because of the increased competition.

When Patrick Buchanan ran for President back in 1996 (I think) He said something which has stuck with me ever since.

He said that foreign nations do not have to abide by our labor laws. They do not have to abide by our pollution laws. They can produce goods and services in a manner that would be illegal to do in this country, (such as the use of prison labor) and as a result of these unfair advantages, they can sell their products more cheaply than domestically produced goods.

This is a good point. You can't say "competition" is good when the foreign competitor starts out with a completely unfair advantage for one reason or another.

If they are not required to operate under the same rules and guidelines as those that exist in America, then it isn't really "free trade", is it?

[arrogantsob]

Sure Free trade is good for everyone BUT we don’t have “free” trade just managed trade. When the original assumptions for perfect competition are violated the conclusions drawn from them are nullified.

For free trade one has to have a small non-interventional government. That bridge was crossed long ago.

[trisham]

Well said.

[stockpirate]

Free trade is great as long as both sides play to benefit both sides.

Problem is our learders are globals wanting to redistibutes Americas wealth to 3rd world countries

[1rudeboy]

Detroit isn't a good place for kids, unless you can afford sending them to a charter school. But if you're single and willing to work your tail off, please come to Detroit. You'll find a good, dirty, smelly manufacturing job in days. I did.

If you're a Millenial, or otherwise limp-wristed, we don't need you (although there are coffeeshops around).

[Parley Baer]

I think the operative word is “free”. Nothing about our trade deals favor America.

[stocksthatgoup]

Level playing field?

[RegulatorCountry]

Thanks.