Talking out of both sides of your trading heart

The Bush Administration, ardent free traders when it comes to U.S. industry’s access to other markets have imposed new import restrictions on Chinese textiles or European steel. According to the Financial Times: “This decision demonstrates the Bush administration’s commitment to our trade rules and to America’s workers,” said Don Evans, US commerce secretary.

Yeah, right. If free trade is a principal, try sticking to it unless the actual impact of an import will be to lower the workplace safety and treatment of workers, not using trade restrictions to compensate for lack of competitive offerings by American companies. Be for the worker by helping to create new industries and do that by helping people learn new skills. The extra billions of dollars in trade lost during a import/export skirmish with China could fund hundreds of thousands of educational courses and thousands of new businesses.

Invest in growing competitive advantages, don’t protect dying companies and their investors, who benefit far more than the workers from these restrictions.

This is another example of ham-handedness by the Bush Administration in foreign relations, which only reinforces the perception that the U.S. wants only its way and that other countries only options are summed up in the phrase “You’re with us or against us.”

Author: Mitch Ratcliffe

Mitch Ratcliffe is a veteran entrepreneur, journalist and business model hacker. He operates this site, which is a collection of the blogs he's published over the years, as well as an archive of his professional publishing record. As always, this is a work in progress. Such is life.

3 thoughts on “Talking out of both sides of your trading heart”

  1. “…Be for the worker by helping to create new industries and do that by helping people learn new skills. The extra billions of dollars in trade lost during a import/export skirmish with China could fund hundreds of thousands of educational courses and thousands of new businesses…”

    This assumes all workers are fungible and differ only in exposure to training in new skills. I don’t think this is a supportable position.

    I believe that people differ in native abilities. And I think that unfettered global free trade is a losing strategy for those workers on the lower half of the normal distribution of abstract reasoning ability.

    And I also think that it is a losing strategy for the majority of cognitive workers whose work can be cheaply and efficiently farmed out to low wage countries with highly skilled workers. Waiting for the wages to average out will work in the long term, but in the long term those who pay the price, and their children, will be retired or dead minimum wage service employees.

    Can I get you another latte’?

  2. Well, if it is a losing strategy to encourage trade, what can we do? Protectionism is a disastrous policy, since it raises the cost of a variety of things, not just the product being protected. Basically, we can either try what Europe did when it losts its global hegemony — defensive tariffs and insular foreign policy underpinned by racism — or we can try to move ahead.

    I agree there are different native talents in the population, but that doesn’t mean that one cannot learn to do something new. We should also tax more heavily to pay for work on infrastructure that does not require high-skill jobs. Mass transit construction, for example, or pulling fiber anywhere it isn’t today. Deciding that people cannot learn is a mistake.

    As for high-value work going overseas, there are a lot of skills that will be distributed around the world which employers will pursue. I spend every day researching this activity for InnovationWORLD (www.innovationworld.net) and find that most of these jobs move to win local markets, while some go overseas simply because work can be done more cheaply. The response, then, is to raise the skill level and cultural agility of American workers — to invest in our people and spread the benefits of those investments across the whole society through progressive taxation, since the whole society has to shoulder the challenge of that investment together.

  3. Talking out of both sides of your trading heart

    Mitch Ratcliffe: “If free trade is a principal, try sticking to it unless the actual impact of an import will be to lower the workplace safety and treatment of workers, not using trade restrictions to compensate for lack of competitive…

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