Posted on 08/05/2016 7:02:35 AM PDT by 1rudeboy
Ronald Reagan was an advocate of free trade throughout his presidency. But just like today, many Americans in the 1980s opposed free trade and pushed for measures that would keep the nation out of the global economy.
Fortunately, Reagan argued persuasively in support of trade, and his success led to rapid growth in the U.S. economy.
He knew that protectionist policies might benefit some industries, but they hurt others.
When the government gets involved in trade, special interests get a chance to game the system. These groups excel at making it hard to tell how their policies harm Americans.
In his 1987 economic report, Reagan explained how protectionism hurts consumers:
Whatever the motive, protection in any form redistributes income and wealth. And because the redistributive effects are usually not readily apparent, special interest groups sometimes favor and governments often choose these methods over other more visible and much less costly forms of subsidy. Protection raises the price of imports and domestically produced import-competing products.
Reagan realized that history provides many examples of the damage unfree trade policies can do.
Speaking to the nation in the summer of 1983, he reminded Americans that the United States has gone down the road of protectionism before—with disastrous results. He said:
One economic lesson of the 1930s is protectionism increases international tensions. We bought less from our trading partners, but then they bought less from us. Economic growth dried up. World trade contracted by over 60 percent, and we had the Great Depression. Young Americans soon followed the American flag into World War II.
Free trade has the opposite effect, which Reagan knew well. Speaking at a reception in Tokyo on Nov. 10, 1983, he succinctly summarized his philosophy on trade, stating:
The message I want to leave with everyone here tonight is simple. It’s a lesson history has taught us again and again. Protectionism hurts everyone, but free trade benefits all.
Ronald Reagan was right about trade, and the exceptional economic growth during his presidency provides proof.
Research conducted by The Heritage Foundation shows a clear correlation between low trade barriers and economic prosperity. Today, we must remember that free trade leads to more prosperity for all, while protectionism hurts American consumers and producers.
Just giving the hornets’ nest a good whack.
Americans, just as today, were highly suspicious and distrustful of “free trade”.
They did however have a high degree of trust in Mr. Reagan.
They have not held that level of trust in any President since.
No argument there. There always was a large portion of the population that expects Uncle Sugar to do all sorts of things. And now it’s even larger.
Under Reagan trade was still tied to human rights.
That started to degrade under GHWBush and was gone with Clinton.
Does it matter any more ? with the state of deviancy being defined downward in the U.S., not hardly.
Not a dime's worth of different between the Bushes and Clintons. Why do you think so many Bush Republicans are voting for Hillary? Got to keep the Dynasty going.
Ditto. You could kind of see where this was heading when Bush did NOT come to the aid of the Democracy Protesters in Tiananmen Square.
Words are not deeds. Unfortunately, a look at the Reagan record leads to the question: With free traders like this, who needs protectionists?
Consider that the administration has done the following:
— Forced Japan to accept restraints on auto exports. The agreement set total Japanese auto exports at 1.68 million vehicles in 1981-82, 8 percent below 1980 exports. Two years later the level was permitted to rise to 1.85 million.(33) Clifford Winston of the Brookings Institution found that the import limits have actually cost jobs in the U.S. auto industry by making it possible for the sheltered American automakers to raise prices and limit production. In 1984, Winston writes in Blind Intersection? Policy and the Automobile Industry, 32,000 jobs were lost, U.S. production fell by 300,000 units, and profits for U.S. firms increased $8.9 billion. The quotas have also made the Japanese firms potentially more formidable rivals because they have begun building assembly plants in the United States.(34) They also shifted production to larger cars, introducing to American firms competition they did not have before the quotas were created. In 1984, it was estimated that higher prices for domestic and imported cars cost consumers $2.2 billion a year.(35) At the height of the dollar’s exchange rate with the yen in 1984-85, the quotas were costing American consumers the equivalent of $11 billion a year.(36)
— Tightened up considerably the quotas on imported sugar. Imports fell from an annual average of 4.85 million tons in 1979-81 to an annual average of 2.86 million tons in 1982-86. Not only did this continued practice force Americans to spend more than other consumers for sugar, but it created hardships for Latin American countries and the Philippines, which depend on sugar exports for economic development. The quota program undermined President Reagan’s Caribbean Basin Initiative and intensified the international debt crisis.(37)
— Negotiated to increase restrictiveness of the Multifiber Arrangement and extended restrictions to previously unrestricted textiles. The administration unilaterally changed the rule of origin in order to restrict textile and apparel imports further and imposed a special ceiling on textiles from the People’s Republic of China.(38) Finally, it pressured Hong Kong, Taiwan, and South Korea, the largest exporters of textiles and apparel to the United States, into highly restrictive bilateral agreements. All told, textile and apparel restrictions cost Americans more than $20 billion a year.(39) The Reagan administration has stated several times that textile and apparel imports should grow no faster than the domestic market.(40)
— Required 18 countries—including Brazil, Spain, South Korea, Japan, Mexico, South Africa, Finland, and Australia, as well as the European Community—to accept “voluntary restraint agreements” to reduce steel imports, guaranteeing domestic producers a share of the American market. When 3 countries not included in the 18—Canada, Sweden, and Taiwan— increased steel exports to the United States, the administration demanded talks to check the increase. The administration also imposed tariffs and quotas on specialty steel. These policies, with their resulting shortages, have severely squeezed American steel-using firms, making them less competitive in world markets and eliminating more than 52,000 jobs.(41)
— Imposed a five-year duty, beginning at 45 percent, on Japanese motorcycles for the benefit of Harley Davidson, which admitted that superior Japanese management was the cause of its problems.(42)
— Raised tariffs on Canadian lumber and cedar shingles.
— Forced the Japanese into an agreement to control the price of computer memory-chip exports and increase Japanese purchases of American-made chips. When the agreement was allegedly broken, the administration imposed a 100 percent tariff on $300 million worth of electronics goods. This episode teaches a classic lesson in how protectionism comes back to haunt a country’s producers. The quotas established as a result of the agreement have created a severe shortage of memory chips and higher prices for American computer makers, putting them at a disadvantage with foreign competitors. Only two American firms are still making these chips, accounting for a small percentage of the world market.(43)
— Removed Third World countries from the duty-free import program for developing nations on several occasions.
— Pressed Japan to force its automakers to buy more American-made parts.(44)
— Demanded that Taiwan, West Germany, Japan, and Switzerland restrain their exports of machine tools, with some market shares rolled back to 1981 levels. Other countries were warned not to increase their shares of the U.S. market.
— Accused the Japanese of dumping roller bearings, because the price did not rise to cover a fall in the value of the yen. The U.S. Customs Service was ordered to collect duties equal to the so-called dumping margins.(45)
— Accused the Japanese of dumping forklift trucks and color picture tubes.(46)
— Failed to ask Congress to end the ban on the export of Alaskan oil and of timber cut from federal lands, a measure that could substantially increase U.S. exports to Japan.
— Redefined “dumping” in order “to make it easier to bring charges of unfair trade practices against certain competitors.”(47)
— Beefed up the Export-Import Bank, an institution dedicated to promoting the exports of a handful of large companies at the expense of everyone else.(48)
— Extended quotas on imported clothespins.
Yet he was the most protectionist president since Hoover.
Big dif between free trade and FAIR trade. Reagan was for the latter, and not the former as his policy in regs to Japans car imports into this country..IE.
Trump is for FAIR trade. Some dont and cant, or wont, get that. I wonder why..
Reagan understood that the concept of “you tax me 0% and I tax you 0%” is fair. The rest is just politics (bearing in mind that he had a Dem Congress on his plate).
The Republicans got in bed with globalists big time in the 1990's. What did they expect an increase in individual liberty under a globalist NWO? We have a dismal situation of both parties as useful and well paid tools of the NWO international corporate pseudo governance.
Learn more here about global labor arbitrage: link
Is that why Reagan was in favor of a FTAA? Or why he jump-started the Uruguay Round that led to the formation of the WTO?
-- Meet the new boss
The only folks complaining about the trade deficit back then were the Dems. What foresight. /s
President Reagan himself joined the chorus of protectionist statements when a 100 percent tariff was placed on selected Japanese electronics products. “The health and vitality of the U.S. semiconductor industry are essential to America’s future competitiveness,” he said. “We cannot allow it to be jeopardized by unfair trading practices.” Again playing into the hands of the most staunch protectionists in Congress, industry, and organized labor, he claimed he imposed the tariff “to enforce the principles of free and fair trade.”(20) White House spokesman Marlin Fitzwater reinforced this presidential use of a bogus distinction when he said the tariff was a signal “that we want to be fair traders as well as free traders.”(21)
We don’t have a Free Trade Agreement with China, so let’s take that off the table. Mexico, on the other hand, falls within Reagan’s vision of NAFTA. So we can start there.
Reagan was close personal buds with Brian Mulroney, which I think explains his fondness for NAFTA.
Also I think he had fallen for the line from his advisors that this would pump-up the Mexican economy to the point where illegals would no longer have any impetus to come here.
Just like how he fell for their line that after one amnesty they would seal the border.
Ain't that the truth? And it hasn't even come close.
You don't suppose it has something to do with treating cheating countries like Communist China, Mexico and Vietnam as equals to allied countries like Japan, Canada and the United Kingdom?
Well, the thing about “pumping up the Mexican economy” is a two-edged sword, when you have people simultaneously arguing that our jobs have gone to Mexico and the Mexicans have come here to take our jobs.
The Mulroney friendship is documented, but after Reagan signed the FTA with Canada, he announced his intention to expand it to Mexico (NAFTA). It is not clear whether the friendship had much to do with it.
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