By Kevin D. Williamson
Wednesday, June
19, 2024
Hey, politician. Yeah, you.
Want to give Americans a modest tax cut, raise the
standard of living for middle-class and lower-income families, reduce federal
bureaucracy, and make U.S. companies more competitive in the global
marketplace?
Easy—all you have to do is enact the single most
unpopular idea in American politics: unilateral free trade.
Unilateral free trade is a policy under which non-U.S.
companies can sell their goods and services in the United States under the same
terms U.S. firms do. All of the usual things that apply to U.S. products would
apply, from health-and-safety standards for automobiles to FDA approval for
imported pharmaceuticals. Those things already apply to all goods sold in the
United States, of whatever origin, and still would. What wouldn’t apply
would be tariffs, import duties, quotas, and other trade restrictions. The rule
would be that if John Smith of Houston can legally sell it in the United
States, then John Smith of London can, too, along with Johan Schmidt of
Düsseldorf, Jean Forgeron of Marseille, Juan Herrera of Mexico City, Jan
Kowalstwo of Warsaw, etc.
Put another way: Americans would be free to buy whatever
they damn well please from whomever they damn well please, from wherever in the
world, without any special permission from the ladies and gentlemen in
Washington.
You know: freedom. More choices. More
competition.
I myself have been working in a unilateral free-trade
environment for most of my life—if you get tired of reading me and want to
read, say, Daniel Hannan in the Telegraph, K J Singh in the Indian Express, or any of
another three dozen terrific and interesting writers I could name, there isn’t
anything stopping you. The digital content industry operates in what’s about as
close to a perfectly free global marketplace as the world is likely ever to
see—and it’s great. For producers, it is easy to connect with widely dispersed
consumers, meaning that even niche, non-mass-market creators can be
economically viable; for consumers, it is wonderful to have so many choices
from so many providers around the world.
Everybody loves free trade in content. If the U.S.
government told Americans that they had to pay $5 every time they watched a
YouTube video made in a foreign country or clicked on an article in the Times
of London, we would throw a fit. If some government functionary told Americans
that we couldn’t watch Broadchurch because we have hit our
national quota of imported British crime shows, we’d riot.
We’ll fight for our right to binge-watch depressing
Scandinavian murder mysteries, but we’re going to let Uncle Stupid tell us that
we can’t buy medicine from some hygiene-obsessed Danish outfit
without begging Washington for the privilege?
About that, here’s a free-trade success story:
Americans love the weight-loss drug Ozempic. Can’t get enough
of the stuff—literally, Novo Nordisk has the assembly lines running 24/7, and they can’t keep up with demand, almost
all of which is here in the United States. Not because Americans are the only
people who need it, but because we are such a lucrative market that we go to
the top of the list. And file away this interesting little nugget: Sales of
Novo Nordisk’s drugs accounts for almost all of Denmark’s
economic growth in 2023. Novo Nordisk by itself paid 15 percent of all
corporate taxes in the country. So a bunch of Danish bank accounts are getting
fat off of Americans trying to get skinny. Question: Do you feel victimized by
that? Should anybody? No. It’s a classic win-win: The Danes get gently
depreciating U.S. dollars, we get rapidly dis-inflating American asses.
Politicians talk about “fair trade.” The term is
meaningless. What they mean by fairness is that other
countries offer our exports the same terms we offer their imports. And those
countries that haven’t opened up their markets would be wise to do so. Free
trade would be better for everybody. But why would we want to adopt the stupid and frequently corrupt trade policies
of badly governed countries just because some of our people do business with
some of their people? Why on Earth would the United States want to adopt
Chinese trade policy, or Russian trade policy, or even European Union trade
policy, for that matter? We don’t impose Scandinavian levels of taxation on
Americans; we don’t impose Euro-Canadian-style speech-police rules on
Americans; we don’t impose Japanese-style gun laws on Americans. We trust
Americans to handle freedom of speech and to own their own guns—and some
Americans are determined to try to screw those up for everybody!—but somehow we
can’t trust U.S.-based builders to decide whether to frame houses out of
U.S.-sourced lumber or Canadian-sourced lumber?
Nonsense.
Yes, unilateral free trade would hurt some firms exposed
to more direct foreign competition. I’d probably make more money, too, if U.S.
readers were restricted to U.S. sources—life’s tough out here in the free
market. Get a helmet. I’m sure our captains of industry will figure it
out.
There will be some skinned knees. But keep in mind that
trade restriction isn’t cost-free, either: Those
dumb tariffs that Donald Trump wants to impose would hurt everybody, not
only consumers of finished goods but also manufacturers of goods who import
material and components—who currently pay artificially high prices for many
inputs thanks to trade restrictions. And it costs money to administer those
trade restrictions, too. Quota-enforcement alone involves the efforts of
at least five federal agencies: Customs, Treasury, Interior, Commerce, and the
ever-lovin’ U.S. Department of Agriculture, whose agents spend their days
producing rules for, e.g., “Dried Milk, Dried Cream,
Dried Whey (up to 224,981 kilograms) (Chapter 4, Additional U.S. Note 12) . . .
Cheese and Substitutes for Cheese (Chapter 4, Additional U.S. Note 23).”
Sure, you can make carveouts for sensitive defense and
intelligence goods, and you may want to prohibit some other goods (like those shady Chinese cell-tower arrays) on a case-by-case
basis. Fine. Those aren’t really economic decisions in that they aren’t
mainly a matter of economic policy. But the rule and the presumption in economic
policy should be in favor of Americans’ right to do business with whom they
please on whatever terms they like.
(Sen. Marco Rubio and his deeply silly “national
security” case for enriching his local sugar barons
notwithstanding.)
I can hear what’s coming next. It’s always the same, and I got into it some in Monday’s newsletter: Don’t let
anybody buffalo you into believing that we’ve “hollowed out” our industrial
base. U.S. industrial output today is more than twice
what it was in the 1980s and nearly five times what it was in the 1950s,
the supposed heyday of U.S. factory work. We’ve done that not in spite of the
fact that we’ve freed up the economy since the immediate postwar years but because
we’ve freed up the economy. We have a huge domestic market and an even bigger
North American bloc, the best workers, ports facing the two oceans that matter
most, and the world’s most sophisticated markets for financing all those
factories, lines of production, and product development.
The notion that we cannot compete with China—a country
that remains significantly poorer than Mexico and poorer
than Kazakhstan, for that matter—is horsepucky. Yes, some overseas
governments will subsidize politically connected domestic firms in the
backwaters of wherever: If some foreign potentates want to artificially lower
the standard of living for their people while subsidizing ours—which is what
that amounts to—then it’s both corrupt and stupid, and it isn’t even the most
efficient way to artificially enrich your cronies, either, but it’s no skin off
our national nose.
So, there’s your policy: Keep the food-and-drug
inspections, send the quota-monkeys and the tariff-collectors home. Nobody is
going to miss them. And, then, welcome abundance as the world’s producers bring
their best produce to our doorstep.
All we have to do is say, “Yes.”
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