Can Free Trade Win The War On Terror?
One of the biggest facilitators of Islamic terrorism is poor economic conditions in the middle east. And one big reason why economic conditions in the middle east exist is that big economic players, particularly America, tax certain imports from middle eastern nations at ridiculous rates thus inhibiting industry.
So how can we fix that? End some of the economic protectionism that is also choking our economy.
...apart from oil, very little comes from the Muslim world. The 30 majority-Muslim states of the greater Middle East, from Morocco through Egypt to Pakistan and Central Asia, account for about 10% of the world’s population. They provide about 1% of our manufactured imports, and an even smaller fraction of our farm imports.
Between 1980 and 2000, their share of world trade fell by 75%, and their share of investment fell even faster. The region’s unemployment rate became the world’s highest, rising to an average of 25% for young people. With the region’s population rising by nearly a quarter-billion, the high unemployment rates mean a pool of perhaps 25 million jobless and sometimes hopeless young people, often easy targets for fundamentalists.
Will oil—now selling at record prices—put these legions to work? Historical experience is not promising. Oil can bring in money, but it also centralizes wealth and power. The effects mark a strong contrast with factory and farm exports, where revenue is spread more evenly through the working public.
Apart from gasoline, we rarely find consumer products from the Muslim world stocking our shelves (apart from the shirts and shoes trickling in from Turkey, Egypt and Pakistan). In part, that is because our tariff system makes life harder for developing countries. A Japanese car, for example, is subject to a mere 2.5% tariff, a Chinese TV 5%, and European medicines are subject to no import tax at all. Likewise, oil and natural gas get a nominal 0.1% tariff.
But tariffs on the items that are most important to developing economies are much higher. Clothes are subject to an import tax that averages 14.5% and can run as high as 32%. Luggage is taxed just as heavily. Shoe tariffs rise to 48%.
Unfortunately, many here in America care more about protecting inflated union wages and perpetuating certain monopolies than mutual prosperity through fair trade.
