When discussing free trade, it becomes obvious how a liberal mind sometimes works- weird. One needs to look at their reasons against expanding free trade. On their side, they have many think tanks and they come armed with statistics which infer a series of negative outcomes for the United States. Of course, we on the right have our think tanks and statistics that prove the opposite.
The first obvious piece of evidence is the NAFTA treaty which went into effect in 1994. Liberals trot out every alleged negative impact of NAFTA as proof for their argument. However, they leave out a very important piece of the puzzle. Free trade agreements are not supposed to benefit only the United States, but also the other countries. Likewise, if there are to be harms, then there will be negative consequences in other countries also. For example, the Left claims that NAFTA has led to the outsourcing of higher paying manufacturing jobs in the United States which then leads to middle class wage stagnation. By the same token, they then argue that the economy of Mexico was ravaged by the United States dumping cheaper corn in that country which “decimated Mexico’s agricultural economy.”
There may be shreds of truth to both arguments, but on balance it may be a wash. What the Left leaves out, however, is their true agenda. With the flight of manufacturing jobs overseas, there is a smaller base of workers to unionize. Hence, the Left has a smaller base to rely upon. That is why there is this great push by organized labor to unionize the growing US service sector. It also explains why they are in favor of comprehensive immigration reform since it may lead to an increase in agricultural workers to unionize. We see these dynamics in microcosm domestically. Manufacturing jobs are moving to right-to-work states since union demands on employers have grown out of hand in the traditional manufacturing states, particularly in the Upper Midwest and Northeast. Besides tax rates, labor costs are a major consideration in where a manufacturer will locate.
This further underscores an erroneous belief on the Left. Contrary to the formulation in their heads, corporations exist to maximize profits, not necessarily be some de facto social justice mechanism. It is called capitalism, something many on the Left have an aversion towards. By doing so, everyone comes out better- jobs are created, profits increase, consumer costs decline. However, the Left cannot see beyond the worker. And this permeates into their view of free trade.
Admittedly, manufacturing labor is cheaper in many developing foreign countries. In Alan Greenspan’s “The Age of Turbulence,” he makes a major point when it comes to these facts. This is a book that should be required reading of those on the Left. Basically, until a certain point is reached based on a variety of factors, foreign workers will “suffer” until such time their economies reach a certain point of growth. When that point is reached, the foreign country can then have the necessary economic power and strength to address things like worker rights and environmental concerns. Building in US demands of the Leftist view of “what should be” into free trade agreements in simply counterproductive.
The same is true of another core constituency of the Left- environmentalists. Many of the poorest countries on this planet happen to be rich in certain natural resources. But this arm of the Left does not want to stop there. Look at the example of the United States and energy production. This country has the potential to become a net exporter of energy which would benefit not only this country economically, but also trade partners. Yet at every turn there is an environmentalist. If it isn’t the Keystone Pipeline, its fracking. If it isn’t fracking, its nuclear waste. If it isn’t that, its genetically modified food (note: genetically modified food has been a fact since Gregor Mendel experimented with peas). It is one thing to demand draconian environmental laws domestically, but quite another to demand it of developing countries rich in natural resources with the means to break the bonds of poverty.
At some point, the Left needs to ask themselves whether they want to perpetuate the cycle of poverty and corruption in the developing countries of Africa, Asia and Latin America, or do they want to continue costly and ineffective American foreign aid initiatives which achieve little. For example, I once read somewhere that if the United States increased cotton imports from sub-Sahara Africa, it would raise the standard of living in those countries threefold. Naturally, the effect domestically would be a decrease in the US cotton production. But land is land and dirt is dirt and what was formerly a cotton crop can become a corn or soybean or radish crop. With increased, cheaper foreign cotton imported, it needs to manufactured. The net loss in domestic cotton production and use would be made up for increases in textile manufacturing and conversion of crop land. Africa benefits, American direct foreign aid decreases, the textile industry benefits, agriculture benefits and the consumer benefits.
It becomes painfully obvious that the Leftist organized labor and environmental sectors are the greatest impediment to true free trade agreements. Their goal is to export their worldview of how things should be. They use the case of Costa Rica and exploiting known oil reserves off the coast. Eventually, that oil and natural gas will be extracted. Would the environmentalists prefer that a company from China or Russia- two countries that care less about the environment- drill for that oil, or would they prefer that an American company using state of the art technology and techniques extract that resource? Even a country with a strong environmental record and laws- Canada- understands reality with the Keystone Pipeline.
And while they talk about the flight of higher paying manufacturing jobs to foreign countries, they thwart the creation of these jobs in the energy sector domestically. To the best of my knowledge, the energy sector is high-paying. At least it was many years ago (1979) when my brother earned $25 a hour to sit on an oil rig off the coast of Louisiana.
The purpose of free trade agreements is to break down the institutional barriers to trade between countries. It is not to export a Leftist ideology and impose on other countries our environmental and labor laws. History has shown that as a country becomes more developed and their economy grows, these issues tend to take care of themselves. They cannot occur or be effective without economic growth. The Left, like most things, has the equation backwards.