Fair Trade Blows Free Trade Out Of the Water
Look around the United States and you’ll see that our trade policy has failed. We no longer produce the products we need every day because our factories have been forced to go out of business, sell out, or move their operations overseas because of unfair foreign competition.
This has been the result of the misguided pursuit of free trade instead of fair trade. “Free trade” means uncontrolled, unrestricted access to our economy for goods often made at less than $4 per hour, tariff- and duty-free. This has devastated our economy and put some of our best companies out of business. “Free trade” has been incredibly costly for the United States. We have seen a steadily rising trade deficit as a result of these failed policies. The United States has not had a trade surplus in 37 years!
We do not need to be isolationists. There is a place for trade in the U.S. economy, but it must be fair trade. We have foolishly opened our borders to other countries who hold numerous advantages over us. In addition to low wages and nonexistent environmental and safety standards, these countries almost always employ a VAT, which acts as a tariff against U.S. goods.
Meanwhile, we have no such protections for our companies. Our companies are taxed through our outdated tax system and must pay both a corporate tax in the U.S., and take the hit of a VAT overseas. This encourages many American companies to invest overseas and keep their profits outside the U.S., crippling domestic investment.
Our government is unfortunately pursuing more of these misguided, multilateral free trade agreements. These kinds of agreements have failed the U.S. again and again. We need bilateral fair trade agreements instead that can create a mutually beneficial relationship for us and our trading partners on a level playing field.
U.S. manufacturing can be a powerhouse once again, but this cannot happen unless we replace free trade with fair trade. Our companies can still thrive if we give them the right conditions. This is just smart economics.