Rick Manning
Guest Columnist
A decade ago, “free trade” supporter Thomas Friedman of The New York Times appeared on CNBC with the late Tim Russert and declared there was no free trade agreement he would ever oppose.
“No. Absolutely not,” he said.
Friedman went on to acknowledge he had written “a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.”
Pride of ignorance is never becoming — especially coming from someone entrusted to educate and inform the public. As it turned out Friedman not only had no clue what was in CAFTA — he didn’t even know what its acronym stood for (“Central American Free Trade Agreement”).
This deal — which passed a GOP-controlled House in the dead of night by a single vote — expanded the broader North American Free Trade Agreement (NAFTA), a monument to crony capitalism that has wreaked havoc on our economy for years. This special interest bonanza subsidized the outsourcing of U.S. jobs, manipulated tariffs on behalf of select corporations, extended government-granted monopolies, established new environmental and labor bureaucracies and eviscerated the rule of law regarding international trade disputes involving U.S. companies.
According to one 2014 report by Public Citizen’s Global Trade Watch, NAFTA has increased America’s trade deficit by 580 percent, destroyed a million U.S. jobs and contributed to the erosion of middle class wages and incomes. It has also doubled the number of immigrants entering our country illegally.
With our economy struggling to rebound following the Great Recession, does this really sound like the sort of trade policy we want to put on steroids?
More to the point: Does it sound like the sort of deal GOP Senate Leader Mitch McConnell wants to entrust to a lame duck Congress?
Not surprisingly, NAFTA’s numerous negative outcomes ran explicitly counter to the lofty promises of those pushing the deal. These included many of the same special interests now behind Barack Obama’s Trans-Pacific Partnership (TPP) — which would effectively expand the NAFTA doctrine to twelve Pacific Rim nations (encompassing 40 percent of the global economy). True to his word, Friedman is among the cheerleaders-in-chief of TPP— referring to it as a “next generation” agreement that would “even the playing field for us.”
Friedman may have his acronym correct this time, but he couldn’t be more wrong about TPP’s impact — nor could he be any more disingenuous in calling it “free trade.”
Real “free trade” doesn’t need government intervention — at least not beyond a basic guarantee of private property rights. All real “free trade” requires — in fact, all it has ever required — are willing participants in exchanges, individuals and entities eager to part with what they have produced in the hopes of obtaining what they wish to consume.
Our nation’s Founding Fathers summed up their view of “free trade” concisely in Article I, Section 9 of the Constitution, stipulating “no tax or duty shall be laid on articles exported from any state,” and adding “no preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another: nor shall vessels bound to, or from, one State, be obliged to enter, clear, or pay duties in another.”
Such language defines a truly “even playing field,” one in which we embrace competition, reward productivity, stimulate innovation and create jobs and wealth via the simple economic principle of mutual self-interest.
Crony capitalist trade deals like TPP don’t facilitate these sorts of exchanges, though, they manipulate them — rigging the game to benefit connected multi-national firms at the expense of American consumers.
The text of the Trans Pacific Partnership (TPP) clocks in at just over 2,000 pages. It includes thirty chapters, many loaded with the same corporate handouts and regulatory overreaches that littered NAFTA’s 2,000-plus pages. Included are concessions to foreign automakers like Toyota, which is eager to undercut its U.S. competition and continue displacing American jobs, and sops to Big Hollywood and Big Pharma that would adversely impact American liberties and pocketbooks.
Sadly, TPP’s voluminous discussion of tariffs completely ignores the real tariff problem — the imposition of Value Added Taxes (VATs) on all U.S. exports. The deal also pays nothing but lip service to foreign currency manipulation and the use of slave labor in signatory nations. Worst of all, thanks to the passage of “fast track” trade promotion authority TPP cannot be amended — meaning we could wind up seeing a lame duck president and a lame duck Congress approve this measure without debate.
Fortunately, the two Republican presidential frontrunners Donald Trump and Texas Republican Senator Ted Cruz both have staked out positions against TPP, making that at least the nominal position of the GOP as a whole.
It therefore would be a slap in the face of voters if the Republican-controlled Congress were to adopt TPP in a lame duck session of Congress after electing either Trump or Cruz who oppose it.
America’s economy cannot afford another “rigged trade” deal. Since 2000, our nation’s annual gross domestic product hasn’t eclipsed four percent. Since 2005, it hasn’t grown by more than three percent. By contrast, from 1950-1980 it broke the five percent threshold twelve times and the four percent mark seventeen times.
If we are to return to the days of growth and prosperity, we must embrace real “free trade” — and reject deals like TPP. That is why voters must demand there be no lame duck TPP.
Rick Manning is the President of Americans for Limited Government.