The Consumer Side of Free Trade
The recent dust-up between Democratic Presidential candidates Hillary Clinton and Barack Obama over the North American Free Trade Agreement (NAFTA) has, once again, brought out a one-sided view of free trade.
Their argument revolves around jobs, and the claim that free or freer trade hurts the country.
But, if we are to intelligently discuss free trade, we also need to consider its impact on consumers. That is, essentially everyone in the U.S.A., including manufacturing workers who lost or may lose their jobs.
You see, free trade makes many products less expensive, whether they’re domestically made or imported from another country.
Freer trade increases competition, competition increases productivity, and as USA Today noted (in a slightly different context), “…this increased productivity has led to rising living standards and made the American economy more competitive.“
These rising living standards have been good for every American, and especially the poor: single parents struggling to keep their families clothed and fed, welfare recipients, and everyone who exists from paycheck to paycheck.
No one gains more when the cost of essential products go down, or go up less than they would otherwise. When a poor person saves a dollar or two, it’s a big deal, a good deal.
Yes, it’s true that some people sometimes lose their jobs, regardless of which country is involved in free trade. But almost everyone else in the country gains something. And, because there are so many ‘everyone elses,’ freer trade is a positive policy.
Trying to turn back the clock, as Clinton and Obama suggest, would exact a serious price on the country. And, as the campaign continues, they should, in what might be the equivalent of a truth in advertising obligation, tell Americans in other states that they will pay a price for trying to protect jobs by rolling back freer trade.
Bottom line: The candidates may wish to curb free trade to protect highly paid manufacturing workers in Ohio, but doing so means they’ll also lower standards of living for residents of all 50 states. And, that would be very bad news for the poor.
Tags: consumers, Free Trade, NAFTA
