Politics & Policy

Why Should Washington Control Our Buying and Selling?

A cargo ship docked at the Port of Los Angeles. (Joel Klamar/AFP/Getty)
Worried about TPA? There’s an answer.

President Barack Obama and congressional Republicans probably are not going to get the trade-liberalization accord they desire. A broad coalition — Left, Right, and the always mush-brained center — opposes not only the trade measures currently in question but free trade as such.

This situation is the result of a swirling vortex of asininity and parochial political interests, including but not limited to the facts that (1) the Left despises free trade, which is of particular concern to corporate Democrat Hillary Rodham Clinton, who will simply shrivel up and die if she manages once again to snatch defeat from the jaws of victory in the Democratic primaries; (2) the usual meshugganah ranters convinced some elements of the Right that trade-promotion authority — TPA, the typical means by which Congress enables the president to negotiate complex trade deals — represents a dangerous sellout to the Obama administration, and that the deals under consideration would strip the United States of its sovereignty on immigration and other issues; (3) an intensifying wide-spectrum xenophobia has infected the American brain, with a shocking number of us convinced that economic interactions with foreigners, especially poor foreigners in Asia and Latin America, are bad for our country, despite a few centuries’ worth of hard evidence to the contrary; and (4) the rapid deterioration of public discourse, supercharged by social media, is making conspiracy theory the default mode for popular understanding of public-policy disputes.

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It is at the moment nearly impossible to distinguish the economic thinking of Senator Bernie Sanders, the addle-pated socialist challenging Herself for the Democratic nomination, from that of Patrick J. Buchanan, within whose elegant prose lurks the illiterate primitivism of what he calls “economic nationalism,” which is to say, Juche Lite with a Virginia accent.

Free men do not have to beg the prince’s permission to buy from or sell to whom they choose, but being a free man is in bad odor just now.

Free men do not have to beg the prince’s permission to buy from or sell to whom they choose, but being a free man is in bad odor just now, and a depressingly large and diverse cross-section of the political apparatus — Democrats and Republicans, unions, environmentalists, purportedly conservative populists, the ever-present rent-seekers in the business community — is lined up behind the belief that Americans ought to be permitted to buy and sell only at the sufferance of the powers that be in Washington. As a moral principle that is an affront to the American proposition; as a practical matter, the implicit belief — that Congress does such an admirable job managing its own business that it might as well manage the rest of the world’s business, too — is, shall we say, unsupportable.

There are problems with the trade measures under consideration, to be sure. Though they have represented substantial improvements, our free-trade deals have not made and do not make trade quite as free as they should, and the secrecy of trade negotiations, though a practical necessity, can be disquieting. There is an elegant means of redressing those complaints, albeit one that is almost uniquely unsuited to the political mood of the moment: unilateral free trade.

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The United States should liberate itself from the superstition that Americans are being victimized by foreigners who want to sell them relatively inexpensive goods and services, and revoke, categorically, our existing barriers to foreign goods. Doing so would require no elaborate negotiations with foreign governments and no delegation of negotiating power to the Obama administration; in fact, the president would not, in principle, need to be involved at all. (If we can imagine a Congress that would pass unilateral free trade, then we can imagine one that would override the veto.) In almost no case do trade restrictions contribute to the general welfare; rather, they function as subsidies for politically connected business interests and as a tax on consumers, who are made to pay more for goods than they otherwise would.

Reciprocity among our trade partners would be preferable, but it is not necessary. There is a great deal of economic evidence that free trade need not be reciprocal to be beneficial, inasmuch as import barriers normally function as little more than a tax on domestic consumers. Arguments about trade reciprocity are usually rooted in misplaced ethical arguments (as if your desire that Japan organize its national affairs around your sense of fairness should automatically override my right to purchase a Honda) or in economic superstitions. Those superstitions include the fear of “dumping” — a phenomenon in which people are allegedly harmed when a firm charges them less for goods than it could have — and the expectation of neat industrial symmetry, i.e., the belief that the explanation for the fact that Americans buy lots of Japanese-made cars while the Japanese don’t buy lots of American-made cars is to be found in legislation rather than in the boardroom of General Motors.

The case for allowing Senator Sanders to interpose his political interests between buyers and sellers is non-obvious, on either moral or economic grounds.

Protectionists often describe reciprocity as if it were a cover charge for admission to American markets, but that gets the issue exactly backward: The question isn’t whether Washington may properly interfere with foreign sellers but whether it ought to interfere with American buyers. The case for allowing Senator Sanders to interpose his political interests between buyers and sellers is non-obvious, on either moral or economic grounds. It takes a special kind of stupid to believe that a voluntary exchange — willing seller, willing buyer — is transmuted into a form of hideous predation simply because some of the parties to the transaction may hold different passports. To accept the premise that a voluntary exchange — which by definition is held to be beneficial by all involved parties — becomes a matter for federal police powers when the magical phrase “national interest” is uttered is to reject the intellectual basis of free enterprise per se and to accept in its place the operating assumptions of managerial progressivism: that you are to be permitted as much liberty as the bosses think useful. Unilateral free trade says it is no politician’s business what I buy or from whom I buy it; make the opposite case and you’re also making the case for every economic intervention dreamed up at the Export-Import Bank, the EPA, OSHA, etc.

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Unilateral free trade would immediately improve the standard of living for millions of Americans by lowering real prices. That applies not only to individual consumers but also to businesses that are reliant on foreign-sourced inputs. And the main tradeoff would be that politically connected business interests would be deprived of a subsidy to which they are not entitled.

It is true that unilateral free trade would deprive the U.S. government of one barter item as it negotiates with other countries to liberalize their own trade rules, but the anti-traders can hardly object to that, since they are at the moment energetically dedicated to preventing the Obama administration and Congress from engaging in precisely that sort of negotiation. Jonah Goldberg has argued that the ideal bilateral trade deal would contain one sentence: “There shall be free trade between the United States and . . .” There are no Goldberg treaties on offer just now, and the more complex trade deals are mired in boneheaded opposition. But I think we can improve on the Goldberg treaty with a simple edit: “There shall be free trade on the part of the United States.”


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