Free Trade: Less Government Everywhere Means Cheaper Stuff Here (and Everywhere)

More government means more expensive everything. Every second and penny spent paying government taxes and complying with government regulations – raises the prices of the goods and services people proffer.

And more government makes it more difficult to innovate – to create and improve goods and services. Innovation is delayed or outright prevented – because the time and money wasted on government could be much better spent developing the next great things.

More government also inflates the prices of everything trade. It ain’t free trade – if governments are involved.

“Trade Wars” actually aren’t about trade – they are about government trade policy.

If peoples are trading freely, there isn’t a “War” – there’s commerce. The “Wars” only happen when governments get involved – placing tariffs, regulations and subsidies in the way of the flow.

It becomes a regulatory arms race. A government imposes another subsidy or tax. So several others in response impose new subsidies and taxes of their own. Lather, rinse, repeat.

A horrendous example of government policy Trade Wars – is all things farm.

(O)ur Farm Bill – which warps our market – has warped the world’s as well. (Franklin Delano Roosevelt) helped beget an eight-decade-long international regulatory arms race.

Other produce-producing nations saw our lattice-work panoply of tariffs and subsidies – and felt compelled to match them. And then exceed them….

So what we now have is a global lattice-work panoply of tariffs and subsidies. A thicket that grows ever thicker – as each next government tries to outdo the last.

How bad has it become? Just on the government money side?

Check out Texas Tech’s Foreign Subsidies Database. The Executive Summary lists the omni-directional government infusion interference:

• All countries, both industrialized and developing, support their agriculture sectors, but use vastly divergent policy tools and combinations of tools. Most use guaranteed minimum prices and import tariffs to protect domestic producers.

• Industrialized country governments are moving from price supports toward decoupled direct income payments.

• Developing countries supplement their price support programs with input subsidies, which are excluded from calculations of the Aggregate Measure of Support (AMS) by the World Trade Organization (WTO), but are nonetheless trade distorting.

• Developing countries’ tariff protection is higher than that of industrialized countries.

• The use of sanitary and phytosanitary (SPS) measures to restrict imports are more frequent among developing countries than in developed countries.

That’s a mess.

Via: Red State

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Weekly Republican Address - House Ways & Means Committee Chairman Paul Ryan

He talked about the Bipartisan Congressional Trade Priorities and Accountability Act would pave the way for increased U.S. trade, and the new jobs and stronger economic growth that would come with it. 

Via: C-Span

Obama Weekly Address: Fighting for Trade Deals that Put American Workers First

In this week’s address, the President laid out why new, high-standards trade agreements are important for our economy, our businesses, our workers, and our values. These new trade deals are vital to middle-class economics -- the idea that this country does best when everybody gets their fair shot, everybody does their fair share, and everybody plays by the same set of rules. The President has been clear -- any deal he signs will be the most progressive trade agreement in our history with strong provisions for both workers and the environment. It would also level the playing field -- and when the playing field is level, American workers always win.

Via: WhiteHouse.gov

Chart of the Week: Major Benefits of Free Trade

Nations that embrace international trade enjoy significantly stronger economies, achieve lower rates of hunger, and maintain a better stewardship of the environment, according to new data published by Heritage for the forthcoming Index of Economic Freedom.

There are, of course, other factors that contribute to such positive trends. But international trade undoubtedly plays a major role in determining the success of a nation and its economy. Contrary to the claims that “unfair” foreign competition hurts the jobs at home, the unemployment rate actually fares better in times of higher trade deficits. Bryan Riley and former Ambassador Terry Miller provide further clarification:

When the trade deficit increases, the unemployment rate decreases, and vice versa. For example, in 2009, the U.S. trade deficit shrank by 46 percent, and the unemployment rate increased by 60 percent.

Many critics of trade deals such as NAFTA and the WTO agreement argue that free trade benefits big multinational corporations and “the rich” at the expense of everyone else. In fact, poverty rates are much lower in countries with low trade barriers than in those where trade is restricted.

It adds up to this: Limited regulations on trade expand the economy and improve the well-being of both a nation’s citizens and its environment. With a lagging U.S. economy still bound by the recession, the expansion of trade is as important today as ever before. Trade can make everyone better off.

Via: The Foundry

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