FOREIGN AFFAIRS

Foreign Affairs

Trade Policy

I steadfastly believe in free trade between the citizens of various countries. I am an ardent capitalist and oppose socialism, communism, mercantilism, and so-called third movement economics. Free trade is good for consumers, business, and American workers. And far better than any “managed trade” agreements negotiated by the government — such as NAFTA and GATT — would be unilateral action by the United States to reduce or eliminate tariffs, quotas, and other non-tariff barriers against foreign goods.

But free trade requires free people. And we cannot just stick our heads in the sand and imagine that in and of itself free trade is a panacea. We ought to insist upon certain standards within the countries with which we make treaties, so that the benefits of free enterprise are available to Americans but to the citizens of the country which trade with America.

NAFTA & GATT

I opposed both the North American Free Trade Agreement, and the General Agreement on Tariffs and Trade. Both measures have greatly increased our trade deficit with all nations, greatly infringed upon our national sovereignty, and acquiesced to the political establishment of nations not known for their free enterprise climate. I oppose all such agreements which do not give citizens of the trading countries the same freedoms Americans have to engage in enterprise.

The World Trade Organization

The WTO is the furthest thing from free trade. Instead, it is an egregious attack upon our national sovereignty, and this is the reason why we must vigorously oppose it. No nation can maintain its sovereignty if it surrenders its authority to an international collective. And, since sovereignty is linked inextricably to freedom, our very notion of American liberty is at stake in this issue.

Free trade means trade without interference from governmental or quasi-governmental agencies. The WTO is a quasi-governmental agency and hence it is not accurate to describe it as a vehicle of free trade. The WTO is nothing other than a vehicle for managed trade whereby the politically connected, campaign contributors and fat cats get the benefits of exercising their position as a preferred group. Preferred that is, by the Washington and international political and bureaucratic establishments.

Trade Restrictions Against Communist Countries

Generally, trade restrictions, such as the type currently being used against Cuba, Vietnam, and North Korea, are unduly oppressive to American citizens and counterproductive. Therefore, I support ending restrictions against travel to and investment in Cuba, Vietnam, Iraq, Iran, and North Korea and other countries. I believe if these non-democratic countries are to experience the benefits of capitalism and freedom, they must first experience a taste of it. People immersed in socialism and slavery must first be exposed to the benefits of capitalism and freedom before they will support such policies, and trade restrictions only delay that transition.

Such policies are often applied in a racist manner at home, the powers that be favoring certain ethnicities over others.

Protectionism Doesn’t Work

I oppose economic protectionism and protective tariffs as a means of protecting American jobs. Generally, they do not work and unduly impose burdens upon American consumers, who wind up paying most of the bill.

Trade restrictions on foreign products lower the standard of living for American consumers. Tariffs, quotas, and other trade barriers are the functional equivalent of a tax, artificially raising the cost of foreign goods and increasing the price that consumers must pay. It is estimated that these practices cost American consumers at least $70 billion per year, the equivalent of $752 per U.S. household.

And the structure of trade restrictions imposes a disproportionate burden on those least able to pay. The trade restriction “tax” is a regressive one. For example, a study by the Federal Reserve Bank of New York showed that import restraints were equivalent to a 66% increase in income taxes for the poorest households, but equivalent to only a 5% tax increase for upper income households.

Opponents of free trade often claim that foreign competition harms American workers. However, the evidence contradicts this claim. For example, if imports harmed domestic employment, we would expect to see unemployment rise whenever the trade deficit expands. However, an analysis of trade data for the past decade reveals that exactly the opposite appears to be true. Unemployment appears to fall even as trade deficits increase.

In addition, the cost of saving jobs through protectionism is often extremely high. For example, a 1989 study by the International Trade Commission indicated that trade protection in the glassware industry preserved 2,500 U.S. jobs. However, that protection cost U.S. consumers $185.8 million per year in the form of higher prices and reduced access to glassware. That means that every job saved cost U.S. consumers $74,320 per year. Similar calculations indicate that the 400 ceramic tile jobs saved through protectionism cost consumers $225,000 per year per job, while the 2,400 jobs saved in the rubber footwear industry cost $113,000 per year.

However, trade protection actively harms workers because it can cost jobs. First, raising the cost of imports costs jobs in domestic industries that consume foreign goods. For example, protecting domestic sugar producers hampers the export of American candy bars. Denying American auto manufacturers access to low-cost imported steel drives up the cost of American-made cars and makes them less competitive on the world market.

U.S. protectionism also encourages other countries to raise barriers against U.S. goods. Nearly 20% of the U.S. economy is now related to foreign trade. Moreover, export-related jobs are high-paying jobs. Indeed, The Economist recently reported that “export-related jobs earn 17% more than average workers.”

That a policy of unilateral free trade can lead to prosperity can be clearly seen from the example of Hong Kong. While its products are restricted by most nations, Hong Kong levies no import tariffs and has few import barriers of any kind. Indeed, Hong Kong has one of the most accessible markets in the world. As a result of this libertarian policy, the city enjoys one of the highest standards of living in Asia, rising wages, a buoyant capital market, and a rapidly growing economy.
Immigration and Elian Gonzalez

I believe the INS raid as authorized by Janet Reno and Bill Clinton was illegal, and did not have a duly executed warrant and affidavit served on the Gonzalez family. I believe Clinton and Reno are now exposed to be agents of the Cuban government loyal to Fidel Castro, and should be indicted for their roles in the Elian Gonzalez affair.

National Sovereignty

We as a nation must not allow our national sovereignty to be compromised. Unfortunately, NAFTA, GATT, the WTO, and several other proposed treaties and organizations, do exactly that, by compromising how we as a people may structure our own government. Let’s not confuse free trade between free peoples, something that is a worthy goal, with allowing our trading partners to choose to nullify American law because it suits their purposes, even though we have valid reasons for such law. Invariably, these treaties are used against us much more than they are used against other nations, many of whom practice real atrocities.

Consequently, I believe we should cut all future contributions to the International Monetary Fund, oppose exchange stabilization to prop up foreign currencies, oppose paying the United Nations any dues, and oppose fast track trade authority for the President.

Replace Trade Sanctions with Truth In Origin

Free trade is the best method of conducting international trade. But how do we as a nation deal with foreign nations who engage in objectionable practices such as slavery, prison labor, and child labor? Anytime we sanction a foreign nation, we penalize American consumers and make their goods more expensive.

The best manner of handling objectionable situations is a truth in origin law, mandating that a company importing goods detail how they were made, by whom, how much the workers were paid, and if child labor or slave labor was involved. Then let the American consumer decide whether they want goods made in such a manner: let them decide whether the goods are made in a manner objectionable to them, instead of imposing the will of the State Department on Americans whether they want it or not.

Troops in Foreign Nations

Generally I support the withdrawal of most American bases in foreign nations and American troops from most foreign nations, particularly those in Japan and Europe. There is simply no pertinent need to station American soldiers there any longer. Countries like Japan and Germany are wealthy enough to support their own defense, and while I would continue a military presence in South Korea, I believe South Korea should be reimbursing us for such support to the best of their ability.

I support the immediate withdrawal of American troops from Bosnia and Haiti. I oppose excursions into so-called humanitarian situations such as Somalia, Indonesia, etc., which are far from our sphere of interest, far from our shores, and beyond our real physical control.
A Lean Mean Military

I support a strong military. However, it is foolish to spend a lot of money on a military when it is not necessary, and when the nature of the enemies have radically changed. Accordingly, now is the time, during a period of relative peace, to audit every facet of our military, to eliminate the things which are no longer needed, and to purchase the things which are more cost effectively.

There is not as great a need for a large number of troops at this time. Relative peacetime and technology changes have made large numbers of troops unnecessaary. Therefore, I advocate streamlining the number of military personnel, and improving the quality, compensating the forces we do retain more adequately. Large numbers of military personnel are forced to resort to qualifying for food stamps in order to feed their families: it is obvious we must pay quality personnel more.

National Guards and Unorganized Militias

A more efficient way of bolstering the internal defense of the United States is to use the tool the founders left for us. In addition to relying on State National Guards to supplement the U.S. Armed Forces, I advocate the development of state, local, and private unorganized militias as outlined in the United States Code, and advocate development of legislation to enable local militias to form without undue interference from police and federal authorities.

Foreign Aid

Foreign aid is little more than welfare for nations — with the same disastrous effects as domestic welfare programs. If Americans truly want to help other countries, they can best do so not through failed foreign aid programs, but by improving the U.S. economy, so that U.S. businesses have funds to invest abroad, and pursuing free trade policies. Foreign aid is structurally bad because it undermines the incentive to take responsibility. The more aid a country receives, the less the government of that country has to answer to the people.

The U.S. currently spends approximately $14 billion per year on foreign aid — far less than most people believe, but still a substantial sum. Since the end of World War II, the United States has spent more than $400 billion on aid to other countries. But there is little evidence that any of these programs has significantly improved the lives of the people in countries receiving this aid. Instead, foreign aid has typically slowed economic development and created dependence.

Indeed, the U.S. Agency for International Development itself admits, “Only a handful of countries that started receiving U.S. assistance in the 1950s and 1960s has ever graduated from dependent status.” In fact, despite massive amounts of international aid, the average annual increase in per capita GNP has declined steadily in developing nations since the 1960s, with many of the Third World’s heaviest aid recipients actually suffering negative economic growth. A recent study by Peter Boone of the London School of Economics and the Center for Economic Performance confirmed that U.S. economic aid does not promote economic development.

There are many reasons for the failure of foreign aid. First, foreign aid has a widespread record of waste, fraud, and abuse. Frequently, the aid is stolen by corrupt foreign leaders. Even when aid reaches its intended beneficiaries, the results are often counterproductive. Just as domestic welfare prevents Americans from becoming self-sufficient, foreign aid keeps entire nations dependent. Moreover, foreign aid has often been used to prop up failing Socialist economies, preventing countries from moving to free-market economic policies. An examination of world economies clearly shows that those countries with free markets experience the greatest economic prosperity.

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