The Case for Free Trade and NAFTA

The Case for Free Trade and NAFTA

by R. Morris Coats

Houma Courier, 11/7/93 op-ed page, Sunday paper

From Mercantilism in the 1400's, many people have mistakenly believed that a country benefited when it exported goods and lost when it imported. The idea is that trade benefits the seller but harms the buyer.

If this were correct, I would be better off if I did my own repair work on my car, grew food in my backyard, built my house, and iron my own clothing. If I had learned auto mechanics, I wouldn't have done the $600 damage by changing the spark plugs (don't ask!).

Instead, I hit the books and focused on formal education. I don't grow my own food or build my own house, but work at things that I am better suited for. If trade hurts a country, Haiti would welcome a trade embargo. Another extension of this trade­hurts­us argument would be that I would be better off without my wife because she and I are always doing something for the other so that the other will have time to do likewise (I hate ironing more than she does and she hates yard work more than I do). This is what trade is really all about, doing something for someone else so that they will do something for us.

Free trade is often seen only in what is lost, but seldom in the gains. When Americans find some foreign products are better buys than American products, we can see the lost U.S. jobs. We don't see that those workers do not stay out of work, but move into areas that they are better suited for. We don't see that American consumers are made better off with better buys. In south Louisiana we fear that we will lose jobs in the sugar industry (despite the fact that Mexico is an importer of Louisiana sugar). We don't see that Mexico's tariffs against

U.S. chemicals will be lifted by NAFTA, leading to more good paying jobs in our chemical industry. If Mexico suddenly becomes a sugar exporter, our local Cameco will have to hire more workers to make farm equipment for Mexican sugar farmers. NAFTA will also open up many jobs for Louisiana oil service companies and our Louisiana ports. We also don't see the American products that Americans can't afford to buy because they have to pay more for protected goods. We don't see the American goods that Mexicans don't buy because they can't sell to us. We don't see that the jobs we don't have because of protectionism are lost jobs, but they are.

We also ignore the consequences of protectionism in our own history. The U.S. Constitution was written partly because before it, states were allowed to set high trade barriers between the states and every state was suffering. High tariffs on goods that were manufactured in the North East led those in the South who had to pay more for those goods to revolt. High trade barriers passed in the 1920's led to increased trade barriers all over the world, the depression of the 1930's and the war of the 1940's.

U.S. industry can compete. Our wages are higher because our workers are more productive. If we protect some of our industries from foreign competition, other industries will never develop, and our workers, companies and products will not be forced to improve. Foreign competition forced our auto producers to make better cars at better prices. Foreign competition forces people out of jobs that other people can do better and into jobs they can do better. As for me, I'm still married, but no longer change spark plugs.