[Congressional Record Volume 145, Number 42 (Wednesday, March 17, 1999)]
[Extensions of Remarks]
[Pages E469-E470]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FREE TRADE ISN'T FREE

                                 ______
                                 

                            HON. BUD SHUSTER

                            of pennsylvania

                    in the house of representatives

                       Wednesday, March 17, 1999

  Mr. SHUSTER. Mr. Speaker, as a cosponsor of H.R. 975, the Bipartisan 
Steel Recovery Act, and an avid supporter of our American steel 
industry and its workers I am submitting an opinion piece which I sent 
to newspapers in my district at the end of January as it relates to 
current global trade practices and the struggles of the American steel 
industry.
  Today cheap steel imports are flooding the U.S. market, decimating 
the U.S. steel industry. America's steel workers are being laid off in 
droves, causing tremendous personal hardship for these workers and 
their families. Is this just an unfortunate but acceptable consequences 
of our global economy, or is this a serious problem which illustrates 
the need for a new socioeconomic paradigm?
  I went to Congress a free trader, embracing Ricardo's Theory of 
Comparative Advantage--a very valid economic theory which states 
essentially that the industries of each nation should produce that 
which they produce most

[[Page E470]]

efficiently and trade those products with other nations that produce 
other goods more efficiently. His theory still makes economic sense--if 
all you care about is economic theory. But as the current steel crisis 
demonstrates his theory has two fundamental flaws.
  First, governments don't let pure economic competition decide what 
products their industries will produce, export or import. Nations 
decide to subsidize certain products because they deem it in their 
national interest for a variety of reasons: to protect vital 
industries, create jobs, and achieve national pride, to name just a 
few. Other nations decide to throw up barriers, direct and indirect, to 
achieve a national interest by selling their products overseas below 
cost or by keeping foreign products out.
  Second, nations may well decide that importing goods at the lowest 
price is not the only or most important consideration in determining 
how open their markets should be. Unemployment carries enormous costs, 
direct and indirect. Welfare, unemployment compensation, retirement 
contributions, and the agonizing destruction of families which are torn 
asunder from the ravages of the inability to support their families, 
are societal costs that go far beyond economic measure.
  So it is time for a new socioeconomic paradigm. To work, Ricardo's 
Theory of Comparative Advantage needs to be modified to include both 
the relative costs of production in different countries and the 
national interests relating to international trade. Can the United 
States retain its preeminence in the world if its steel industry is 
weakened by artificially low-cost foreign competition? Can we remain 
strong if our aviation or ocean shipping industry is dependent upon 
foreign planes and ships in times of national emergency? On a more 
personal level, do the benefits of lower-priced shirts and shoes from 
third world countries outweigh the costs of welfare, unemployment 
compensation, and the family pain caused by chronic employment? 
Simplistic 19th century free trade solutions no longer serve our 
country well. Nor would a blind protectionist policy that blocks most 
foreign trade. It's time for a more complex balancing of economic 
benefits realized through foreign trade and the legitimate national 
interest in preserving a strong domestic economy.
  Balanced international trade with reciprocal open markets is a worthy 
economic policy so long as our vital national interests are preserved. 
But that calls for a much more complex socioeconomic policy than either 
Democratic or Republican administrations have embraced to date.

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