Ending NAFTA Would Hurt Ohio
Despite anti-free trade tirades from Hillary Clinton and Barack Obama to the contrary.
Ohio workers would pay a heavy price for pulling out of Nafta. Canada and Mexico are the top two markets for exports from Ohio, accounting for more than half of the state’s exports in 2006. According to the Ohio Department of Development, 283,500 workers in the state earn their living in the export sector, with machinery, car parts, aircraft engines and optical/medical equipment among the leading exports. A trade showdown would put those good-paying jobs at risk.
What amazes me is just how much economic illiteracy goes into anti-free trade rhetoric.
To hear the protectionists and liberals tell it, by trading with other countries we “send jobs overseas.” They think that if we stopped trade with foreign countries Americans would have to buy American-made goods which, in turn, would create more American jobs.
But here’s the problem with that: The market pushed certain types of businesses and jobs overseas for a reason, and that reason was cost. Because of heavy government regulations, heavy taxes and an expensive unionized labor force many businesses chose to take their businesses overseas where there was less regulation, fewer taxes and a different labor market. This allowed those businesses to generate more goods (of better quality in a lot of instances) at cheaper prices. Something that, in turn, allowed Americans to consume more.
As an illustration of this, compare modern child bedrooms to those of the 1940’s. Half a century ago childrens’ rooms had a bed, some clothes, some books and maybe a dozen or so toys. Today kids have clothes, books, desks, night stands, computers, stereos and usually so many toys that often parents are forced to devote entire closets to them. This happened because most of those goods were made with less expense because the companies that made them take advantage of friendlier business environs in other countries.
If the protectionists had their way, however, none of those foreign-made products would be available. Instead, people would have to buy their products from American companies with entirely American (and less efficient/more expensive) operations (see: Obama’s “patriot corporations"). So what do you think would happen if the price of all those products went up because only American-made versions of them were available on the market?
The same thing that always happens when cost goes up. Demand would go down. Americans would simply buy fewer things. Now how would that help American manufacturers? Not to mention the standard of living for Americans in general? It wouldn’t. There would be less economic activity, and Americans would have less disposable income.
Which isn’t to say that trying to attract businesses back to our countries is a bad thing. But trying to accomplish that through trade restrictions foolhardy, and doesn’t address the reason why those countries went overseas in the first place. If we want those businesses back we need to roll back unnecessary regulations. We need to cut taxes. And we need to keep unions from monopolizing the labor markets.
Personally, I don’t mind buying products from other countries. I think being able to stroll down an aisle at the local shopping center and select from products that were made all over the world is a testimony to our country’s economic power and affluence. But some people don’t like products from other countries for a variety of reasons. I don’t begrudge them their feelings, but people who feel that way should know that protectionism isn’t the answer to their problems.
robert108
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realitybasedbob
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