The Issue: Free Trade
|
THE ISSUETariffs were originally set up to help protect American industries by Alexander Hamilton, the first U.S. Secretary of the Treasury. Later, Abraham Lincoln, then leader of the new Republican Party, similarly implemented a 44 percent tariff during the Civil War to protect American industries and to generate funds for the war and the construction of railroads. After World War II and during the Cold war, the U.S. government began lowering trade barriers and instituting what has been called “free trade.” America is now oppressed by the chains of “free trade” through treaties like the North America Free Trade Agreement, undemocratic and secretive trade regimes like the World Trade Organization and border tax inequities allowed by the WTO, such as the Value-Added Tax which is utilized by 150 of America’s economic competitors.  Shackled with these disadvantages, America is no longer able to compete economically on the world stage. Our nation is gradually allowing Japan, the European Union nations and emerging economies in China, India and Brazil to overtake the U.S. as the world’s lone economic superpower. Eventually, if all remains the same, NAFTA, the WTO and VAT will be responsible for America’s complete and total economic downfall. The nation is already well on its way, and without wholesale changes to our economic policy, we will certainly find ourselves in the economic gutter, so to speak. The North American Free Trade Agreement (NAFTA) NAFTA was sold to the American people with pie-in-the-sky promises, none of which have been delivered. Before NAFTA, the U.S. managed to hold a small trade surplus with Mexico. By 2007, that surplus had turned into a $91 billion deficit. The trade deficit with Canada and Mexico combined has increased 691 percent since its implementation. From 1993 to 2007, the U.S. went from 16.8 million manufacturing jobs to 13.9 million; most of those losses can be attributed directly to NAFTA. The deal has been a disaster for family farmers as well – 300,000 family farmers in the U.S. have disappeared in that time. In addition, NAFTA did little to improve life in Mexico as evidenced by the 300 percent increase in illegal immigration into the U.S. over that time. The World Trade Organization (WTO) The World Trade Organization has been just as disastrous. It was supposed to lift the standard of living of all people; however, the percentage of those living on less than $1 per day has actually increased since its implementation. Since the WTO was organized, 500,000 indigenous farmers have been displaced. A slew of medicines and foods contaminated with toxins made their way into the U.S., killing people and pets while making thousands of others very ill. There will be no recourse for this however, at least none known to the general public as all WTO actions are shrouded in secrecy and the organization has no accountability to the public at large. In addition, it is yet another example of how the WTO prevents the U.S. from acting in its own best self interest by usurping American sovereignty. If America did impose sanctions on the offending nations poisoning us, the WTO would then in turn punish the U.S. for putting up “trade barriers” even though they were put in place to save American lives. Since China joined the World Trade Organization in 2001, America has lost 2.3 million jobs. Those Americans lucky enough to stay employed witnessed their annual earnings fall by an average of $1,400. Also during that time, America’s trade deficit with China has increased by $30 billion each year. Values Added Tax (VAT) The VAT has also put America behind the eight-ball in trade. Currently 150 nations utilize the VAT, as the WTO allows countries using it to create an uneven playing field in the area of trade. The WTO grants countries using value added tax structure to issue rebates to their companies, working like an export subsidy for foreign exporters and an import tariff at the same time. This places us in a comparatively most uncompetitive situation. The U.S. is consistently hampered by VAT in trade. In 2006, VAT nations collected rebates totaling $218.2 billion while the U.S. was forced to pay $122.4 billion in taxes due to the VAT. Each year the VAT imposes roughly a $290 billion burden on U.S. goods exported and another $85 billion on services. This encourages outsourcing as American companies move offshore in order to circumvent the VAT and reap the same benefits as the companies producing in those nations.  So-Called “Free Trade” is not Fair Trade It is no wonder then that America is unable to compete in the global marketplace. The nation is consistently hamstrung by these unfair trade practices. If we are to one day reemerge as an economic superpower NAFTA must be renegotiated, the WTO must be disbanded and the VAT must be eliminated. Otherwise, America will continue to be chained by the detrimental effects of “free trade,” descending deeper into economic turmoil. EIC POSITIONSo called "Free Trade" agreements limit our ability to act in our own best interest. Organizations like the WTO are non-democratic, secretive global bureaucracy that usurps domestic sovereignty in the name of a trade agenda. NAFTA has rendered America uncompetitive in the world: it has destroyed our industrial base, caused us to outsource our production and has killed millions of blue collar American manufacturing jobs. The Value Added Tax (VAT) has placed the U.S. at an unfair disadvantage in global trade. We must renegotiate these agreements get out of them all together immediately. VIDEOS |
LIST OF RELATED ARTICLES
Obama Pushing for Korea Trade PactFriday, November 20, 2009
If passed, the trade pact would be the largest the U.S. has implemented since the North American Free Trade Agreement was signed into law in 1994.
Congress Urged to Take Tougher Stance on ChinaFriday, November 20, 2009
If China is allowed to continue amassing huge amounts of U.S. wealth, China will simply pour it back into the American economy, creating more bubbles that could burst and lead to economic calamity.
Trade Enforcement Priorities Act of 2009Monday, November 16, 2009
China Violating International Trade LawsMonday, November 16, 2009
Beijing has been known to engage in illegally subsidizing domestic manufacturers, dumping its products in foreign markets, selling products below market value and systematically manipulating its currency.
Obama Ignores Trade with JapanSaturday, November 14, 2009
While President Obama stressed that the two economic superpowers "have been and will continue to be equal partners," the reality is far different.
WTO Chief: Rising Unemployment Threatening TradeThursday, November 12, 2009
The head of the World Trade Organization said in an interview Thursday that the biggest threat to trade worldwide was rapidly rising unemployment rates.
Trade Enforcement Priorities Act of 2009Thursday, November 12, 2009
Trade Distorting Practices Undermining U.S.Wednesday, November 11, 2009
According to the CPA, foreign consumption taxes, or value-added taxes, and currency manipulation are the two most important trade barriers affecting U.S. exports.
Obama Failing on Trade PolicySaturday, November 07, 2009
President Obama's pragmatic, nuanced and compromising approach to handling tough issues is drawing sharp rebukes from both the left and the right for his administration’s trade policy - or lack thereof - thus far.
Some Realities of Today's WorldThursday, November 05, 2009
While we talk about free markets and government non-interference, other nations are busy subsidizing and building up key sectors of their economies and, in this process, destroying key sectors of ours.
Lugar Paving Way for Job-killing FTAWednesday, November 04, 2009
Senate Resolution 311, introduced by Senator Dick Lugar, would direct U.S.T.R. Ron Kirk to negotiate a free trade agreement with the Association of South East Asia Nations (ASEAN).
U.S., China Talk Trade Ahead of Presidential VisitTuesday, November 03, 2009
U.S. and Chinese officials met last week for the annual Joint Commission on Commerce and Trade meeting ahead of President Barack Obama’s scheduled China visit next month.
American Economy Decimated in Phantom Trade War Attributable in Great Measure to “Free Trade”Monday, November 02, 2009
American economy decimated in phantom trade war, we lost it because we didn’t even know we were in it so we planned no defenses.
Trading on Thin IceFriday, October 30, 2009
The US-Colombia free-trade agreement is dangerous, outdated and out of touch with trade treaties across the globe.
Out of Afghan - Into Trade WarFriday, October 23, 2009
Like world peace, free trade is an admirable goal, but it will never exist in our lifetime. Instead, we must recognize an intense Trade War that ensues.
Saving Capitalism: Pat Choate speaks at the CPAThursday, October 22, 2009
View economist Pat Choate's slide show outlining the fundamental transformations the U.S. must undergo to emerge from our current crisis.
Mum's the Word on “Free Trade”: Money ControlsSaturday, October 17, 2009
Zero Investment in the U.S. - LiterallyTuesday, October 13, 2009
Because we have net imports, our trade deficit subtracts directly from GDP.
Chinese Glass in New World Trade Center Causing OutrageMonday, October 12, 2009
A report by the EPI found that China has risen to become the world’s biggest glass producers mainly through illegal subsidies to manufacturers.
Rep. Sander Levin's debunking myths in the 421 Tire CaseFriday, October 09, 2009
Congressman Sander Levin has a comprehensive web page explaining how the Obama Administration's decision on the tire case was pro-trade. |
Through currency manipulation, dumping, illegal subsides, and other illegal trade practices, foreign competitors have put U.S. manufacturers at a severe competitive disadvantage.