Ceramic Industry

INTERACTIVE: Up for Discussion<br>The Case Against Free Trade

February 1, 2004
This new interactive column is designed to give readers a forum to discuss opinions on industry issues. This month's topic is "free trade." Read the column, then share your thoughts with other readers online.

Americans were led to believe that free trade would allow access to less expensive consumer goods and therefore improve our standard of living faster than our wages increase. We were also led to believe that American workers who lost their jobs to imported foreign products would quickly find other jobs, and that the trade deficit would eventually decrease. However, none of this has happened-we have been misled.

An Economic Fallacy

Free trade is an economic fallacy that originated 160 years ago in the British Empire, when it was the "super power." England now has a standard of living lower than Italy and Spain. Citizens of many other nations-including China, Japan, South Korea, Germany, France and Mexico-have never believed in free trade. Their governments protect their jobs.

Look at the facts and see if you still believe that free trade is good for Americans:

  • Over the last 20 years, for most of the 3⁄4 of the U.S. labor force that lacks a college degree, the effect of free trade has been a lower standard of living.
  • The government official unemployment rate was still at 6% in October 2003, despite an economic growth of 8.2% in the third quarter. Nearly nine million people are unemployed, and the number of "under-employed" (i.e., people who have taken lower-paying jobs because they can't find work in areas for which they are qualified) is also huge.
  • The U.S. has lost more than three million private sector jobs in the past three years, with no signs of a let-up. According to the U.S. Labor Department, nearly 800,000 payroll jobs have been lost (as of November 2003) since the declared end of the latest recession in November 2001, making the latest economic recovery the most "jobless" since World War II. Additionally, the average workweek is only 33.8 hours long-the lowest number since the government started keeping track in 1964.
  • In an effort to stimulate the economy and create jobs, the government has lowered the interest rate to about 1%, the lowest in 45 years. This has caused a significant reduction in the standard of living for retired Americans and others living on savings, causing their stock market value and dividends to decrease.
  • In a further attempt to stimulate the economy and create jobs, the federal income tax rates have been reduced. In 2003, the U.S. budget deficit was estimated at $450 billion-and U.S. taxpayers will eventually have to pay that debt.
  • We have already lost complete industries to free trade, including electronics, garments, toys and leather goods. If our free trade policies don't change, we will soon lose other industries as well, including automotive, ceramics, steel, furniture, plastics and machine tools.
  • In 2002, the U.S. had a record trade deficit of $435 billion-$125 billion of which was with China. Most of this deficit was in manufactured goods. Although the numbers have not yet been released for 2003, there is no doubt that our trade deficit was even higher. The U.S. trade deficit over the last 17 years totals $3.8 trillion.


Protecting U.S. Jobs

The Chinese communist government has said it wants to be the world's supplier of manufactured goods. China has declared economic war, and it is winning. Our free trade policy is economic suicide.

Over 60 million unemployed Chinese workers are willing to work for $1 per hour. No company operating in the U.S. can compete with wage rates that low. Floating the value of the Chinese currency (Yuan) is not going to be enough. The difference in hourly wage rates between China and the U.S. is just too great-about 20 to 1. A tariff on Chinese imports is needed to stop the job hemorrhage.

Free trade is destroying our standard of living. We must work together to encourage our government representatives to change our nation's trade policies.

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If you would like to get your opinion on an industry-related topic "Up for Discussion" in a future issue, please e-mail the Editor at grahlk@bnpmedia.com.