Earlier this month I wrote a blog for Boating Industry titled “The Free Trade Question.” After the blog was published I received several great comments and questions about free trade, and, as teachers everywhere say, “If you have questions, others probably do too.” So, this blog will share some thoughts triggered by the comments and questions I received related to the original blog. If you would like to read the original blog, it can be found here.
As I was considering comments made on the original blog, I realized that I left out something very important – the paradigm that most helps me understand the value of trade. This paradigm helps me view trade, not as trying to get a larger piece of the economic pie, but as an effort to make the economic pie itself larger. Historical data clearly indicates that trade makes the economic pie bigger and any global traveler can attest to the tremendous amount of wealth being created around the world, both in and outside of the U.S. Having a “win-win” paradigm as it relates to trade can significantly expand our view and with this perspective we can make the economic pie bigger for everyone.
A lot of the comments I received mentioned the importance of trade being not only free, but also fair to the U.S. Of course, we do not want anyone to take advantage of the U.S., its businesses or its citizens, but I am not sure we need to rely on the government for that. We can compete globally and, as long as global markets are open to U.S. manufacturers, I believe we can do well.
One comment I received insinuated that free trade is a government initiative driven by some politicians to equalize world wealth – in short, some politicians want to lower the standard of living in the U.S. so other countries can be closer to ours. While I believe the evidence indicates that all parties benefit from trade, sometimes the timing or quantity of those benefits may be misaligned and the benefits can seem more dramatic for countries with less wealth.
Over the past several years I have been invited to the White House several times, including to an Oval Office meeting with the president, I have been in several meetings with the Secretary of Commerce where trade was discussed, and attended meetings on Capitol Hill to discuss trade with members of both parties. I have never heard anything from anyone in either party other than discussions regarding how we can use trade to help the U.S. and create jobs for people in the U.S.
Other comments I received referred to damage done by global trade in the U.S. and many people can point to an example where trade seemed to hurt a company or region and those examples are both concerning and well documented. We definitely need to help those in our country who may be impacted by the changes. However, often the negative impact of trade or technology can be focused (and dramatic) while the benefits of trade are often more spread out (and not as obvious). New facilities do not get as much attention as closed facilities and consumers having more access to goods at lower prices may not draw much attention.
Finally, I want to start where this blog began, encouraging us to think about making the economic pie bigger through a win-win approach. U.S. wealth has increased dramatically the last eight years and just because sometimes the trade benefits can seem more significant in other places does not mean the U.S. is not also benefiting. I have been to many of the poorest places on our planet and have seen how trade can help billions of people around the world by lifting them out of poverty and misery – trade can make life better for people both inside and outside the U.S. and I think that’s a good thing.
Bill Yeargin is the president and CEO of Correct Craft.