Free trade hurting U.S.

By WILLIAM A. COLLINS

The United States long enjoyed one of the world’s highest standards of living. This has now ended. The chief tool for ending it has been “free trade.” The purpose of that policy is to allow American corporations to acquire products and services in foreign lands where labor rates, benefits, and taxes are dirt cheap. These products are then imported freely here and sold at full U.S. prices for hefty profits.

There’s also an export side to these trade laws, aimed largely at Mexico and Central America. Under the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), subsidized U.S. grain enjoys cheap access to Latin markets, driving down agricultural prices there and thus forcing farmers off their land. Hungry, many join the flood of illegal migrants heading north by risking death in the Sonoran Desert. Thus U.S. agribusiness is making a killing by selling subsidized grain down there and hiring desperate migrants up here.

In NAFTA’S early days, the promised job-creating sweatshops did indeed sprout throughout Mexico, especially near the U.S. border, siphoning off many American jobs. No more. As corporations got sophisticated and the U.S. worked out further trade deals worldwide, many of those sweatshops closed down, replaced by new ones in Asia. Labor there is even cheaper and the brutal working conditions are even more remote from the clouded eyes of American journalists.

The results of this trade policy are plain enough. The U.S. is awash in shuttered factories and unemployed workers. The Labor Department reported in July that the nation currently lists 2.4 million available full-time jobs for 14.5 million unemployed citizens. Much of this gap is presently due to the Great Recession, but the recession also masks the basic problem that many of those jobs simply don’t exist anymore. That’s how Wall Street can report profits while average families experience losses.

To make matters worse, even some of our newly trumpeted savior industries are false prophets. Take green energy and those long-awaited green jobs. The guy who comes to insulate your attic is surely local, but the guys who make the windmills are likely Danish. And it probably won’t be long now until the Danes similarly lose out to China or Thailand.

Likewise with organic food. Our image is of local farmers just out past the suburbs. That probably remains true for rhubarb, but organic soy has already gone off to China, with other crops soon to follow.

Another potentially mortal result of our economic race to the bottom is the trade deficit. Naturally it’s smaller now since we can no longer afford to buy much from abroad, or anyplace else. But it persists.

Arbitration

Less publicized, but similarly damaging, are certain rules we agreed to in establishing NAFTA and joining the World Trade Organization. These allow arbitration to overrule U.S. and state laws. Obscure arbitration bodies have already let foreign multinational corporations kill state environmental laws and set aside professional licensing rules, plus they have allowed foreign truckers to undercut our domestic haulers.

Among the leading opponents of any proposed cures for these suicidal trade practices is The New York Times. It has railed steadily against the dangers of “protectionism,” as it in turn protects its own multinational investors, advertisers, and Wall Street readers. Meanwhile, U.S. median family income was already shrinking and the rich-poor disparity growing even before the recession began.

X Columnist Collins is a former state representative and a former mayor of Norwalk, Connecticut.