Jewish World Review March 15, 2004 / 22 Adar, 5764

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Finding a balance between free trade and protecting our national interest


http://www.jewishworldreview.com | The issue of so-called "free trade" is now before us. And be certain that neither Republicans nor Democrats are pleased with its arrival on the presidential campaign agenda. After all, President Bush is in the position of what, to this point, has been his administration's adamant adherence to free trade in the face of record trade deficits. And Sen. John Kerry had been defending the Clintonian free trade era of the '90s, which he supported with his votes on Capitol Hill.

The rising debate over both "free trade" and the outsourcing of American jobs to cheap overseas labor markets gives me newfound hope that this presidential election will actually turn on issues, policies and vision. Because so far, Americans have been offered nothing more than false choices on these matters.

Many proponents of globalization would have us believe that we must decide between protectionism, or economic isolationism as the president called it, and free trade. Maybe they also fear, however, that our policymakers may discover a middle ground for a desperately needed balanced trade policy in the national interest.

Earlier this month, President Bush said, "If we are to continue growing this economy and creating new jobs, America must remain confident and strong about our ability to trade. . . . Given a level playing field, America will outperform the competition." American workers can certainly compete with workers from any nation. But our highly skilled engineers, for instance, should not have to compete with engineers earning one-tenth of their salary in India.

Unfortunately, many would rather blame our nation's employment issues on American workers than on the U.S. multinationals outsourcing work to cheap overseas labor markets. Last week Alan Greenspan said, "We appear . . . to be graduating too few skilled workers to address the apparent imbalance between the supply of such workers and the burgeoning demand for them." But unemployment figures for technically skilled American workers tell another story. Seven percent of our computer hardware engineers were unemployed last year. Perhaps we should focus on re-employing our highly skilled workers now, before we begin addressing the specter of future shortfalls.


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We should also be working toward fixing our faulty trade agreements with nations like Mexico, Japan and China, instead of forging more costly agreements with a list of new countries including Singapore and Chile.

Sen. Byron Dorgan, D-N.D., told me, "Fifteen years after our beef agreement with Japan, (there is still) a 50 percent tariff on every pound of beef going into Japan. Two years after we did a bilateral trade agreement with China, they have a very large surplus with us. Our negotiators allowed them to have a 25 percent tariff on U.S. cars being shipped into China and only a 2.5 percent tariff on any Chinese cars that would be shipped here." Our trade deficit with Japan totaled $66 billion last year, while our deficit with China was a staggering $124 billion.

The portion of American manufactured goods that are exported has fallen roughly 1 percent in the last three years, while imported goods are increasingly penetrating our marketplace. Net manufacturing imports, in fact, were an alarming 5 percent of total U.S. gross domestic product last year.

As Rep. Marcy Kaptur, D-Ohio, put it, "It's as though (other countries) are siphoning off some of our wealth - and they are - and we're getting nothing for it in their homelands."

According to the National Association of Manufacturers, more than 75 percent of the $90 billion increase in our trade deficit in manufactured goods has been due to falling exports. And workers in the manufacturing sector are paying the price. Our manufacturing industry ended last year with fewer workers than at any time since 1958.

Our economy has lost 3 million jobs in the last three years, and millions more are still at risk. Many of my critics have recently suggested that I'm a protectionist because I want to curtail the export of American jobs to cheap foreign labor markets, eliminate our trade deficit and find a middle ground in regard to our nation's trade policies. If that constitutes protectionism, then I proudly stand accused.

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03/02/04: Election stakes are getting higher
02/24/04: Help wanted: Free trade policies hurt working Americans
02/17/04: All the news that's fit
02/04/04: American jobs must be protected
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01/20/04: U.S. selling itself short with "free" trade
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01/05/04: Business leaders should resolve to lead by example in 2004
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11/25/03: Free trade costs plenty
11/18/03: European Union is playing a dangerous game
11/10/03: This time, it's not the economy
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