One of the main reasons our Free Trade Agreements (FTAs) do not work is due to the fact that other countries immediately implement a value-added tax system after joining the World Trade Organization (WTO), while the U.S. still has not implemented a VAT. Free Trade Agreements either eliminate all or most of the tariffs between two countries. Once a country joins the World Trade Organization (WTO) that country then almost immediately implements a VAT system or raises their VAT to replace their tariffs. The VAT acts just like a tariff but is entirely in line with WTO standards. The result of this system is that American exports are essentially economically blocked by other nations.
Tag Archives: Trade Deficit
There are two great debts the American people have, yet there is only one the nation talks about. These twin debts are the national debt—money borrowed from the nation against itself compiled with money borrowed from other nations—and the trade deficit: money given to other nations for imported products and services that will, at some point, come back to buy out the United States.
“Free trade” has essentially led to the most massive wealth transfer in the history of the world. The United States has not witnessed a trade surplus since 1975, and since then trillions of dollars have been lost through trade deficits caused by “free trade” on our end and protectionism on the other. The most significant flaw with all of our “free trade” agreements is that they are impossible to enforce, and because of this competition is impossible. “Free trade” depends on the premise that all countries will play by the same rules. However, in the real world, assuring that this occurs is incredibly expensive, time-consuming and inefficient to contest.
For almost two decades the U.S. has been living with the results of joining the World Trade Organization (WTO). The WTO is a self-serving and undemocratic organization that operates outside of our control. The U.S. Constitution states that all treaties made under the authority of the United States become supreme law of the land (Article VI). When our government signed the WTO treaty, unbeknownst to most Americans — including our legislators — our sovereignty was given away.
The United States’ trade deficit is a big problem. This is an ongoing issue with no end in sight as the disastrous so-called “solutions” our politicians propose are actually the main problem. Exports are great, but not at the expense of a flood of job-killing imports. When we open up our borders through “free trade” we do far more harm than good.