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The Case Against Free Trade, NAFTA, and the WTO by Jack Davis, Chairman Save American Jobs Association In Engineering 101, we were taught, "If the facts don't support the theory, the theory must be wrong." "Free trade" is like apple pie, motherhood, liberty, and free speech: Americans are for it. Very few Americans criticize free trade. Ever heard a debate on free trade? This suggests job protection and tariffs are deemed by many as un-American. Wrong - trust me. Un-American is not fighting to keep America strong. Free trade means no tariffs or duties at the border. Free Trade as an economic theory originated 160 years ago in the British Empire when they were the super power. They now have a standard of living lower than Italy and Spain. The theory is that free trade allows access to low cost consumer goods, therefore improving the standard of living faster than wages increase. The theory also goes that workers who lost their jobs to imported foreign products would quickly find other jobs and that the trade deficit would decrease. That is, we are better off and have a higher standard of living due to free trade. Wrong. None of this has happened in America. We have been misled. The truth is, the free trade theory works only when climate, natural resources, and physical features are major factors. When wage rates, capital, and technologies are the major factors, the country with the lowest wage rate has the advantage. Over the last 20 years, for the 3/4 of the U.S. labor force, those that lack college degrees, the effect of free trade has been a lower standard of living. The Chinese communist government has stated they want to be the world's manufacturer. They have declared economic war and they are winning. There are 60 million unemployed Chinese willing to work for $1.00 per hour. The U.S. manufacturer's average labor rate is $20/hour. No U.S. manufacturer can compete with labor rates of 5% (that is 1/20) of their rates. The U.S. has lost 3,000,000 private sector jobs in three years with no signs of a let up. In 2003, the payroll jobs were down to 130.3 million, the lowest in four years. The average hours worked was 34, the lowest number since the government started keeping track in 1964. There are over 15,000,000 unemployed. The number of under employed is also huge. Not since the depression have we lost jobs three years in a row. Don't believe the unemployment numbers from the federal government: when you run out of benefits, or stop looking for work, you are not counted as unemployed. America needs a strong agricultural and manufacturing base. Free trade will cause a continuing hemorrhage of industries and jobs and will leave the U.S. in debt and defenseless. We have lost complete industries to free trade; for example, entertainment electronics, garments, toys and leather goods. We are losing automobile, ceramics, glass, steel, furniture, plastics, tool and die machine tools and others. There is not a business that has not been affected. After 30 years of free trade, look at the facts;
In Engineering 101, we were taught, "If the facts don't support the theory, the theory must be wrong." I don't think they teach this theory in the University's economics or political science departments. In an article in the Los Angeles Times on Monday, February 9, 2004, the Bush administration said "The movement of American factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation." Washington elected and elite, both Republicans and Democrats, believe that free trade is good for America. They are as wrong about this as they were about prohibition. Union and non-union workers have known for 30 years that it was bad for them. No one did anything. The Wall Street Journal article by Michael Schroeder is quoted "A majority of Americans now say free trade is not worth it because local jobs are lost." The poll also found that 54% believe the U.S. companies that send work overseas are giving away jobs. Twelve months ago I was a free trader. Not any more. It was not until I researched the free trade issue that I was able to see the damage it was causing America. Free trade is the basis for NAFTA and WTO, i.e. nations that belong to North American Free Trade Agreement and the World Trade Organization, in general simple terms, agree to not charge you tariffs, if you don't charge them tariffs. There are a lot of problems with NAFTA and WTO. First, the Chinese, Japanese, South Koreans, Germans, French and Mexicans and many others don't believe in free trade. Some of them cheat. Second, if they didn't cheat they still take our industries and jobs for their wage rates that are lower. Remember one of my first points; "No U.S. manufacturer can compete with wages 5% (that is 1/20) of their rates." Buffalo is a good example of this. To save American manufacturing and jobs, we have to convince our elected officials that free trade is a mistake and we must get out of NAFTA and WTO. Articles:
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Copyright 2006 | jack@jackdavis.org