Recently, a couple of editorials caught my attention. One piece argued that the benefit of free trade for US consumers comes at the expense of American workers. A second editorial suggested that trade widens the income gap in the United States. Both editorials merely promote anti-free trade sentiments. However, neither author presents any solutions that would help to remedy their concerns.
Everyone likes low prices, but what price are we really paying for these cheap goods?... We must stop these misguided 'free trade' agreements and make sure that average Americans are the ones benefitting from our trade policies, not multinational corporations. (See Who's Getting Rich Off Free Trade, Economy in Crisis, Aug 1, 2013)
I agree that everything must be done to ensure that international trade policies are beneficial to the average American. What the article fails to say is that President Barack Obama fought hard in 2011 to ensure just that without throwing out free trade agreements. While pushing to get Congress to approve the long-stalled trade agreements with Colombia, Panama and South Korea, President Obama also fought hard to renew the Trade Adjustment Assistance Act (TAA). The TAA provides financial support to those workers, particularly in the manufacturing sector, who have been displaced as a result of foreign trade. However, the TAA was criticized by some members of Congress as wasteful spending, because it was an addition to the unemployment benefits that are guaranteed to all American workers.
If we stop free trade agreements, the only option would be to go back to protectionism. A protectionist trade policy would include high tariffs and quotas on imported goods. Other countries would enact their own protectionist policies, which would limit their access to technology, medicine, research and other goods and services that they may not be able to produce at home but could use. A more balanced argument to end free trade would also incorporate a discussion on the costs of protectionist trade policies.
President Obama publicly deplores growing economic inequality in the United States. At the same time, he is pushing for a new Trans-Pacific Trade Agreement on top of the trade agreements he won in 2011. Evidently, he sees no inconsistency here, but a growing body of economic research points to the adverse effects of lowered tariff barriers on manufacturing workers and their communities.
International trade cannot be isolated as the sole explanation for the increased economic inequality in the United States. Economic inequality persists regardless of the trade policy that the United States embraces. Minorities and women, in particular, have faced a number of barriers that have made it difficult for them to achieve the same earning power as Caucasian males. Other systemic and structural factors must be taken into account, such as unequal access to quality education, job training and health care, to understand the income inequality in the United States. Blaming free trade ignores the reality of the domestic policies that have perpetuated problems at home before the start of the 21st century.
The second piece, like the first, fails to offer any real policy solutions to address the economic situation in the United States.
