Tuesday, April 8, 2008

Are we afraid of free trade with Colombia?

Editorial from George Will on the Mark Penn firing touches at the heart of the bigger policy issue. The real concern is whether we fall back into protectionism by one or both political parties. Maybe it is time to start listening to some off the simple facts on trade.

From http://www.washingtonpost.com/wp-dyn/content/article/2008/04/07/AR2008040702194.html

Austan Goolsbee, Obama's economic adviser, has said that "60 to 70 percent of the economy faces virtually no international competition." America's 18.5 million government employees, among whom organized labor finds its growth, have almost no vulnerability to foreign competition, and neither do auto mechanics, dentists and countless other professions. Furthermore, Goolsbee, with whom Obama might profitably have a conversation, has said that globalization, meaning free trade and attendant deregulation, is responsible for a "small fraction" of today's widening income disparities.

Under the Andean Trade Preference Act, passed by a Democratic Congress is 1991, the United States imposes tariffs on only 8 percent of imports from Colombia. But more than 90 percent of U.S. exports to Colombia are subjected to tariffs, some as high as 35 percent. The trade agreement would make this "one-way free trade," which now primarily serves Colombia's interests, more mutually beneficial.

Nevertheless, U.S. unions oppose the agreement, probably to preserve the moral clarity of their monomania: Damn the details, full speed ahead in opposing more free-trade agreements, anywhere, anytime.

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