{"id":6332,"date":"2016-07-11T17:32:14","date_gmt":"2016-07-11T17:32:14","guid":{"rendered":"http:\/\/www.rationalargumentator.com\/index\/?p=6332"},"modified":"2016-07-11T17:32:14","modified_gmt":"2016-07-11T17:32:14","slug":"protectionism-not-great","status":"publish","type":"post","link":"https:\/\/www.rationalargumentator.com\/index\/blog\/2016\/07\/protectionism-not-great\/","title":{"rendered":"Protectionism Will Not Make America Great – Article by Pierre-Guy Veer"},"content":{"rendered":"
<\/div>\n
\n
\"The<\/a>Pierre-Guy Veer<\/span>
\n<\/big><\/big><\/strong><\/div>\n<\/div>\n
******************************<\/div>\n
<\/div>\n

At the end of June, presumptive Republican nominee Donald Trump made a <\/span>fiery speech<\/span><\/a> about trade in Pittsburgh. Using many of Bernie Sanders\u2019 <\/span>talking points<\/span><\/a> on the subject, Trump said, among others, that he would hold China accountable for the manipulation of its currency and unfair trade practices, withdraw from the Trans-Pacific Partnership, and renegotiate the North American Free Trade Agreement with Mexico and Canada.<\/span><\/p>\n

Trade vs. Trade Treaties<\/strong><\/p>\n

There is some wisdom on Trump\u2019s part about NAFTA. This agreement would deserve the label \u201cbureaucratic agreement on trade\u201d rather than \u201cfree trade agreement.\u201d<\/span><\/p>\n

For example, <\/span>Annex 313<\/span><\/a> states that Bourbon and Tennessee Whiskey can only be called as such (and be sold) if they are produced in Tennessee \u201cin accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey.\u201d<\/span><\/p>\n

The same rule applies to Canadian Whisky in Canada and Tequila and Mezcal in Mexico. Annex 703.2.A.4, on its side, contains a truckload of products which are exempted from free trade, including Canada\u2019s <\/span>milk supply management<\/span><\/a> which may cost the <\/span>average family<\/span><\/a> $267 a year.<\/span><\/p>\n

Trump is also right about being hesitant to support the TPP. What has <\/span>leaked<\/span><\/a> out of it shows that the agreement has more to do about protecting intellectual property rather than genuine trade liberalization. Such protection would <\/span>stifle innovation<\/span><\/a> and slow economic growth \u2013 just imagine if there had been a patent on the wheel or iron casting when it was first invented.<\/span><\/p>\n

Fairness is Buying What You Want from Wherever<\/strong><\/p>\n

However, Donald Trump is wrong to advocate for \u201cfair\u201d trade. In his <\/span>platform<\/span><\/a> he calls for a level playing field in order to have a \u201cfairer\u201d trading relationship with China, known for its heavy top-down approach on <\/span>foreign businesses<\/span><\/a>.<\/span><\/p>\n

This amounts to protectionism that could set off a very costly trade war. American consumers will pay the price \u2013 a form of tax. It could set off a deep recession. When you consider the stakes here, you see that all of Trump\u2019s valid complaints about trade treaties are designed to bring about something that is even worse.<\/span><\/p>\n

If, however, Trump\u2019s goal is really to \u201cmake America great again,\u201d then he should not be caring about China\u2019s trade practices, but embracing\u00a0<\/span>unilateral<\/span> free trade.<\/span><\/p>\n

Of course there would be unavoidable, short-term pain with job losses in industries that cannot compete with China and other industries. The steel industry, for example, would not be protected by the recently enabled <\/span>266-percent<\/span><\/a> tariff imposed on Chinese steel and would shed many jobs.<\/span><\/p>\n

However, people using steel (for construction, manufacturing, etc.) would save so much money by being able to import cheaper steel. This surplus money will not evaporate; it will return in the economy in the form of savings, job creation, and economic growth.<\/span><\/p>\n

This is not trade theory: unilateral free trade has successfully happened. Famous French liberal Fr\u00e9d\u00e9ric Bastiat has abundantly talked about England turning to <\/span>unilateral free trade<\/span><\/a> and how it helped the country become even richer. \u00a0It even \u201c<\/span>gave them bread<\/span><\/a>\u201d during a bad harvest 1847 thanks to wheat imports.<\/span><\/p>\n

By walking down this \u201cbold path,\u201d to quote minister Peel who enacted free trade, America would truly be great. Government would stop subsidizing agriculture in every single form, thereby not only <\/span>improving<\/span><\/a> the quality of the water supply, but also reversing the contentious debate about undocumented Mexicans whose livelihood was destroyed by <\/span>U.S. corn subsidies<\/span><\/a>. Capital resources would be allocated in a more efficient way according to supply and demand \u2013 it might still be farming, but it could become manufacturing, mining, or even services \u2013 and save an <\/span>average<\/span><\/a> of $6.1 billion per year until 2019.<\/span><\/p>\n

Trade liberalization, combined with Trump\u2019s <\/span>promises<\/span><\/a> to lower business income tax to 15 percent and tackle the deficit and debt, would truly \u201cmake America great again.\u201d Because after the unavoidable short-term pain of adjusting to new incentives, Americans will get back to work and better supply the world\u2019s demand on their own.<\/span><\/p>\n

\"Pierre-Guy<\/a><\/p>\n


\nPierre-Guy Veer<\/strong>
\n<\/a><\/h5>\n

Pierre-Guy Veer is a\u00a0Linguistic Reviewer at Lionbridge<\/strong><\/p>\n

This article was originally published on FEE.org. Read the original article<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Pierre-Guy Veer ****************************** At the end of June, presumptive Republican nominee Donald Trump made a fiery speech about trade in Pittsburgh. Using many of Bernie Sanders\u2019 talking points on the subject, Trump said, among others, that he would hold China accountable for the manipulation of its currency and unfair trade practices, withdraw from the Trans-Pacific Partnership, and renegotiate the North American Free Trade Agreement with Mexico and Canada. Trade vs. Trade Treaties There is some wisdom on Trump\u2019s part about…<\/p>\n

Read More Read More<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,5],"tags":[4598,319,1142,4220,2664,2665,83,906,2483,1143,4751,1188,4366,4752,4077],"class_list":["post-6332","post","type-post","status-publish","format-standard","hentry","category-economics","category-politics","tag-2016-presidential-election","tag-canada","tag-china","tag-donald-trump","tag-fee","tag-foundation-for-economic-education","tag-free-markets","tag-income-tax","tag-mercantilism","tag-mexico","tag-pierre-guy-veer","tag-protectionism","tag-tpp","tag-trade-liberalization","tag-trans-pacific-partnership"],"_links":{"self":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/6332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/comments?post=6332"}],"version-history":[{"count":1,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/6332\/revisions"}],"predecessor-version":[{"id":6335,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/posts\/6332\/revisions\/6335"}],"wp:attachment":[{"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/media?parent=6332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/categories?post=6332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rationalargumentator.com\/index\/wp-json\/wp\/v2\/tags?post=6332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}