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FREE TRADE isn't free

At last Thursday's public hearing of the Maine Citizen Trade Policy Commission, the commission heard a lot of people give their thoughts on free trade in general as well as more specifically about a free-trade proposal with Colombia, demanded by the president in his State of the Union address last month. (You remember, the one in which he told Congress - the elected representatives of a country facing more national debt and more consumer debt than ever before in our history, a country trying to pay for two wars in the Middle East and the one at home against non-rich people, and a country hated around the world - that our union would "remain strong.")

Anyway, the commission - a group of state officials, with a couple of "regular people" mixed in - voted to oppose the deal, but that will not mean much in DC.

But the hearing gave me an opportunity to put together a few ideas that I had never really connected as clearly as I did that night. First we have to start with the idea that "free trade" means "trade without tariffs." Here are Dubya's thoughts on the matter, from the selfsame State of the Union I mentioned earlier: "Many products from these nations [Colombia and Peru] now enter America duty-free, yet many of our products face steep tariffs in their markets. These agreements will level the playing field."

But tariffs have a purpose - to protect the companies that abide by the rules countries make. Here in the US we make rules and laws to protect the public interest, like vehicle-emissions standards, labor-relations laws, environmental-impact regulations. If companies operate here in the US, they have to abide by those rules. Companies that don't have to pay tariffs to the government when their foreign-made goods are imported. It is a way to compensate our government - our society - for not having followed the rules. (Before you get too angry, let me admit right here that many tariffs are manipulated by well-connected lobbyists to protect politically "special" businesses here in the US, or to force punitive expenses on companies elsewhere who might deign to compete. But let's move on, in a world where tariffs do what they're supposed to, and are not misused.)

So when companies in Colombia, which are not subject to American labor standards, American environmental rules, and the like want to send their goods here, they have to pay us to do it. (There's another fudge - American consumers who buy those goods pay the tariff in increased prices passed on by the importers. Effectively, we pay our own government for the privilege of buying goods made where people don't play by our rules.)

The US has a couple of options, and we have clearly taken one of those and discarded the other. Rather than trying to get others to adopt environmental standards and labor rules like our own, and rewarding those countries with reduced tariffs after they make the changes (and in some sort of sensible proportion to the degree to which their rules are like our own), we are removing the barriers entirely, even for goods made in countries with no environmental protection, no protections for workers, and no human-rights respect.

Then, we argue, as Bush does, that we have to bargain with those countries to lower their tariffs, to "level the playing field." But the problem is not that the tariffs are out of balance because of those countries' choices - it's because of our own. We have removed our protections, we have un-leveled the playing field ourselves.
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