Tuesday, June 30, 2009

Free Trade Agreements Are Not Free Trade

From a Ron Paul column in 2000:
The economic argument for free trade should be no more complex than the moral argument. Tariffs are taxes that penalize those who buy foreign goods. If taxes are low on imported goods, consumers benefit by being able to buy at the best price, thus saving money to buy additional goods and raise their standard of living. The competition stimulates domestic efforts and hopefully serves as an incentive to get onerous taxes and regulations reduced.

If one truly believes in free trade, one never argues a need for reciprocity or bureaucratic management of trade. If free trade is truly beneficial, as so many claim, unilateral free trade is an end in itself and requires neither treaties nor international management by politicians and bureaucrats. A country should promote free trade in its own self-interest -- never for the benefit of someone else.

Those not completely convinced of the benefits of free trade acknowledge a "cost" of lower tariffs for which they demand compensation and fair management. Thus, we have the creation of the WTO. By endorsing the concept of managed world trade through the World Trade Organization, proponents acknowledge that they actually believe in order for free trade to be an economic positive, it requires compensation or a "deal."
He goes on to discuss how it is also a threat to national sovereignty, but that is more distracting then helpful. Free trade is good with or without state agreements. Free trade is by definition the free exchange between individuals. American would benefit from open and free trade even if every other nation had a complicated system of tariffs and restrictions. Now whether the WTO gives us a net higher or lower amount of free trade is uncertain. Go here to your senators votes on free trade.

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