The Follies of Free Trade
America is in open competition with the very countries from whom we buy our goods and finance our government. These countries supply our consumption while simultaneously competing fiercely against our companies in international markets. India, Japan and China consistently rail against “protectionism” in the U.S., because they do not want their unfettered access to the U.S. market tampered with.
The U.S. is told that it must oblige to its commitment to free trade — not because it is in OUR best interest, but because it is in our foreign creditors’ best interest. Foreign exporters finance our government so the U.S. can continue functioning, and then they make all of their money back through the goods we buy from them. The U.S. government then pays back its finance charges, and over time foreign financiers virtually double their investments. The United States is told that it must keep up its end of the free trade bargain, while other nations seem to skirt the rules. They often use hostile practices to put American companies out of business and capture sectors of the market.
Other countries limit and restrict the amount of American-made goods flowing into their markets. The United States puts up no such regulations, and is thus flooded with foreign-made goods. The WTO, NAFTA, and other free trade agreements favor the major producers in this equation, and right now, the U.S. is not one of them. We are told by these international trade regimes that we cannot protect our own economy, because we must instead open our markets up to all foreign interests.
Our government has softened its own regulations regarding capital infusions, mergers and acquisitions, and foreign-takeovers. To make matters worse, many successful American companies are for sale on an open stock market. As a result, the U.S. has lost thousands of companies to foreign takeovers in the past 30 years, and stands to lose even more if the economic crisis deepens. The same cannot be said of other countries, where takeovers are closely regulated, and major industrial champions rarely get purchased by an overseas interest.
It is crucial that we start to follow the successful examples set by these other countries. The United States cannot continue allowing the rest of the world to walk all over our economy.