NCPA - National Center for Policy Analysis

PROTECTION RACKET

March 26, 2008

As the Democratic presidential campaign marches on, its most alarming public policy issue is Hillary Clinton and Barack Obama's antitrade advocacy.  But passionate protectionism illustrates the pro-government, anti-market philosophy that is the core of their beliefs and it reflects the seriously wrong direction in which they will take America if one of them becomes our next president, says Pete du Pont, chairman of the National Center for Policy Analysis and a former governor of Delaware.

International trade is good for the U.S. economy.  It creates jobs to produce the products America exports, provides workers for foreign companies that produce goods here and broadens the choice of goods and services available to us, explains du Pont.  So the good news is that America's international trade is constantly increasing:

  • U.S. exports grew 12 percent in 2007, and the U.S. Department of Commerce reports that since the first General Agreement of Tariffs and Trade, in 1948, U.S. total trade as a percentage of gross domestic products has risen to more than 29 percent in 2007 from less than 10 percent.
  • According to a Heritage Foundation study, the United States is the world's largest exporter; U.S. exports amounted to $1.6 trillion in 2007 alone and those exports generated 25 percent of U.S. gross domestic product (GDP) growth.

Trade creates jobs, says du Pont:

  • America's exports of goods sold abroad -- electrical machinery, chemicals, plastics, agricultural products, medical and scientific instrumentation, for example -- support six million American jobs; exports of services account for another five million jobs.
  • And foreign-owned companies operating in the United States directly employ five million American workers, including 16,000 in Ohio by Honda, 5,400 in South Carolina by BMW, 6,000 by Nokia and 15,000 by Nestlé.

So free trade is helping, not hurting, the American economy and yet limiting free trade is the chosen public policy of the Democrat Party and its candidates for president.  That would be a harmful and depressing national public policy, says du Pont.

Source: Pete du Pont, "Protection Racket; Democratic hostility to trade is the most worrying trend of the presidential campaign," Wall Street Journal, March 26, 2008.

For text:

http://online.wsj.com/article/SB120620158999157469.html

 

Browse more articles on Economic Issues