World Trade Magazine has some of the best editorials in the trade and business press about the importance of trading policy on global sourcing. One recent column suggests that the recent anti-trade rhetoric in the US is completely detached from economic reality. According to the piece, "Recently we have seen that many voters think we have trade policy all wrong. They blame the loss of U.S. manufacturing jobs on increased imports of manufactured goods. The facts don't support this. U.S. manufacturing output has increased 66 percent since NAFTA was passed in 1993." But NAFTA is one example of how free trading policies improve the economy. Another -- which has a negative impact on manufacturing employment -- is productivity. The column refers to rising production levels -- and declining employment -- in the domestic steel industry as one example to show how rising productivity levels rather than offshore production are the real enemy of blue collar union employment.
Despite this, the US still protects many industries from the market, forcing US companies to pay more for raw materials that other countries thanks to antidumping laws and countervailing duties. Products subject to these added import costs include "steel, bearings, magnesium, silicon, semiconductors, furniture and hundreds of others." In these areas and others, "The U.S. system imposes barriers that can have the effect of keeping imports out, even if they are not dumped or subsidized. When imports are kept out of the U.S. market, prices go up." And US competitiveness goes down -- both at home and abroad. Let's hope that the next President realizes how vital free trade is to our long-term economic interests.
- Jason Busch