Thursday, July 9, 2015

The Best Trade Policy

If someone were to offer you something that you wanted in exchange for something you didn't want as much, should you turn it down?  Or, ask them what they pay their employees?  Or some other question?  Or would you just take what you wanted from them and give them what you no longer wanted.  A pretty simple question with a pretty obvious answer.

This simple thought experiment reveals what should be the optimum trade policy for the US.  If another country wishes to sell us something that our consumers or businesses want more than they want US dollars, then we should let our consumers and businesses buy it.  Period.

The usual response to this idea of free trade is:  but, what happens to workers and businesses in the US who would not be able to compete?  Following the logic of that response, no one would ever trade or make any exchange with anyone anywhere, because, in every transaction of any kind with a buyer or seller, there will always be winners and losers.  There are no exceptions to this reality.

So months of political effort have been wasted deciding whether or not to give President Obama the power to "negotiate" so-called fast-track trade deals. Why negotiate?  What is there really to negotiate?  Any negotiations will restrict trade and reduce the benefits of trade.  Just trade.  That's all that is needed.  Pandering to special politically motivated interests by placing "negotiated" restrictions on trade simply hurts the US (as well as countries that we trade with) with no offsetting advantages.

Other than national security concerns, the US should be willing to trade anything with anyone at any time without restrictions.  That "giant sucking sound" is the sound of political special interests draining the lifeblood out of the American middle class by placing "negotiated" restrictions on the free movement of goods and services.

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