N o vem b er 17, 2010
Çortlanb (Observer
Page 15
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Free Trade: A Corporate Scam
A race to the bottom for wages
W illiam A. C ollins
Free trade isn't the only thing
ruining America, but it's a biggie.
The most obvious reason is that
so many jobs have gone overseas,
You'd thinkeconomists might feel a
duty to explain to our leaders what's
gone wrong. Well, that's their job,
but most economists these days
work for industry, largely the very
same employers who benefit from
cheap foreign or imported labor,
They're surely not going to sound
the alarm.
Other economists work for uni-
versifies, where they're still caught
stake—always—is greed.
Manufacturers and mar
keters don't know avoca
dos from blueberries. But
they do crave cheap labor
anywhere they can find it,
from Poland to Palau,
What's more, they pay big
money to lobbyists and to political
campaigns to get it. Afterall, Ameri-
can workers aren't their responsibil-
ity. They answer to investors.
Agribusiness is the same. It's
heavily subsidized by Congress and
loves selling its low-cost products
tariff-free in lands where nocompet-
up in ancient post-mercantilist ide-
ology. Early in Econ 101, you learn
the mantra of "comparative advan-
tage." In other words, each country
or region should do what it does
best and then trade its surplus out-
put to other countries with a mini-
mum of restriction. Mexico should
send avocados to Maine and get
blueberries in return. That way ev-
eryone makes a profit.
Such is the foolish logic that presi-
dents of both parties have used to
sell free trade agreements to Con-
gress, and which Congress buys all
too often. Unfortunately what is at
ing subsidy exists. That may drive
local farmers out of business, but
the companies don't care. They're
not our brothers' keepers.
Most nations have imposed tar-
iffs or quotas to protect local indus-
tries against such cheap foreign
competition. This healthy protec-
tion is what free trade agreements
seek to overcome.
Expanded to the grand scale of
world trade, these actions have led
to our rampant unemployment, a
depressed economy, and an unsus-
tainable trade deficit. Two current
examples: Whirlpool is moving more
by
production to Mexico and GE is
closing its last light bulb plant in
America.
So why not impose
more tariffs to raise prices
for specific foreign goods
and services? Not only
would this save and pos
sibly create jobs, we could
use the law to prohibit
entry o f those products whose
manufacturer destroys the environ-
ment or abuses workers,
g o v ern m en t fails to p u rch ase
enough goods at home. The long-
established Buy America Act re
quires only that a product bought
with federal tax money be 50 percent
American. Additional loopholes
take that down to about 25 percent
in practice. Further, in 2008, there
were 65,000 waivers granted to avoid
the law altogether.
There's more, way more. Corpo
rations, lobbyists, importers, politi
cians, news media, and many econo
mists are in on the deal. They kow
i
t
i
r tow to employers, investors, and
. . . t / l C T C S ¿7 l O t O J advertisers who make a bundle off
f
i
i
the "race to the bottom" for wages.
T D O T IC y t O D C ITICICIC
If by chance you would like to do
/ J p v t r n v i r i Q th f>
your bit for the economy, you can
"
urge your members of Congress to
C U V l T O I l l l I C I l t C llic l
oppose the upcoming free-trade
agreem ents with Colom bia and
South Korea. They would only make
unemployment worse.
And, don't pay attention to econo
Well, there's a lot ofm oney to be mists on trade issues. Too many
made in destroying the environment have sold out. They warn of trade
and abusing workers. That's why wars, but ignore the collateral dam
multinational corporations invest age of the trade peace we're suffer
big bucks in the legislative process ing today.
to assure they can continue to do
OtherWords columnist William
just that. Only citizen protests slow A. Collins is a former state repre
them down.
sentative and a former mayor of
Disappointingly, even our own Norwalk, Conn.
abusing workers.
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