Friday, September 12, 2003
With the upcoming free-trade WTO talks in Cancun, a question keeps popping up in my mind.

There's obviously a whole lot of opinion and discussion of free trade vs. protection of home-grown markets. Pro-free-trade folks argue that borders open to goods ultimately make all participants wealthier and better off -- comparative advantage and all that. Those who are for more protectionist policies respond that this might be true in the long term, but in the short and medium term, jobs will be lost, and people are not easily adaptable to other trades.

For the sake of this post, I will concede both points, as well as acknowledge that the argument is hardly limited to those two issues. But is the argument even relevant today? What about matters of national security?

Here's what I mean: I don't think it's much of a stretch to say that, in a truly free-trade environment, the U.S. would cede much of the food-growing business to other countries. Americans, with their 12+ years of schooling, are simply too expensive to use for picking lettuce -- hence our reliance on cheap, often illegal, immigrant labor. Were tariffs on food imports abolished, it is not inconceivable to think that a large portion of our food supply would come from farmers in the Third World, whose time and labor are much less expensive than ours, even when offset by lower productivity.

Ditto for steel. The likes of Russia and Brazil can make a lot of steel, and even though their workers are nowhere near as productive as Americans, they work cheap and there's lots of them. Strictly in terms of economics, it may not make any sense for Americans, with all their education and demands of safe working conditions, to be making steel, when it can be done elsewhere by willing men with a couple years of schooling, working with safety standards from the days of Andrew Carnegie.

But here's the thing: are we really comfortable with the idea of being dependent upon foreign countries for such necessities? Even if we managed to retrain every farmer and every steelworker into whatever jobs prove more viable -- are we really OK with the idea that foreign countries control our food supply? Or that a few countries can actually decrease our military strength by denying us raw or processed materials for tank replacement parts? That's a lot more leverage than another laughable UN speech, no?

(Sure, over the long term, such things would balance out, and the markets would take care of any artificial shortage created by political action. But much of life is short-term. We've all seen the costs of waiting even a few months to invade Iraq. If the American food or steel industries are supplanted by foreign suppliers, recovering them would take years, if not decades -- in strategic terms, that's not long-term, it's eternity.)

Am I missing something here? Is my case overstated? Or is there an argument to be made that economic variety and industrial independence -- in other words, the continued ability to tell "the global community" to stick it -- is worth paying a premium and accepting a lower standard of living than we might enjoy through free trade?


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