[Congressional Record Volume 149, Number 153 (Tuesday, October 28, 2003)]
[Extensions of Remarks]
[Page E2145]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        FREE TRADE IS FAIR TRADE

                                 ______
                                 

                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                       Tuesday, October 28, 2003

  Mr. BEREUTER. Mr. Speaker, the following editorial from the October 
19, 2003, edition of the Omaha World-Herald expresses support for 
greater efforts to reach trade agreements that reduce tariffs and non-
tariff barriers imposed against American exports. The phrase ``fair 
trade'' is often inaccurately counterposed against the phrase ``free-
trade.'' So-call free trade agreements should always be constructed to 
be fair to American business and farm enterprises and to exporters.

                           Adapting to Change

       A demonstration in Lincoln last weekend expressed strong 
     opposition to free trade. The rally was part of a national 
     ``fair trade'' campaign critical of the North American Free 
     Trade Agreement and of a planned Free Trade Area of the 
     Americas.
       The fact remains, though, that a free-enterprise economy 
     such as the United States' functions best when it is shorn, 
     for the most part, of artificial constraints such as tariffs 
     and quotas. Opening up a country to trade promotes 
     efficiency, reduces inflationary pressures and generates new 
     opportunities in multiple directions.
       A protectionist system stifles those crucial goals. Studies 
     by the World Bank and the International Monetary Fund have 
     long pointed out that the countries that have experienced the 
     greatest economic growth have been those that have embraced 
     open markets and eschewed protectionism.
       The anti-free-trade claims also offer illusory promises 
     involving job security. Protectionism tidily promises to lock 
     in the economic status quo. Ultimately, however, it lacks the 
     power to ward off economic disruption. (The same holds true 
     for any trading system; change is unavoidable.)
       No wonder the loss of jobs at an automotive rubber-hose 
     plant in Lincoln (as Goodyear shifts some of its production 
     to Mexico) spurs an outcry among some residents. It's 
     unrealistic, though, to imagine that the ``fair trade'' 
     agenda provides a solution.
       The fair-trade movement stresses, for example, that it is 
     necessary to sharply ratchet up wages in developing countries 
     so that the differential with U.S. pay rates can be greatly 
     narrowed. Short of waving a magic wand, though, it's hard to 
     see how that can be accomplished.
       U.S. employment in traditional industry, such as steel or 
     textiles, has declined for decades not as the result of any 
     malevolent free-trade conspiracy but because of productivity 
     gains and fundamental market forces--the signals sent by the 
     decisions of autonomous companies and consumers, as well as a 
     serious overcapacity in supply and, in the case of steel, 
     extraordinary pension costs.
       The prescriptions of anti-free-trade organizers cannot 
     erase those basic economic realities.
       The demonstrators in Lincoln took particular aim at the 
     North American Free Trade Agreement. Mexico, however, is 
     establishing ever-greater economic links to Nebraska. Mexico 
     is now the state's No. 2 foreign export market, exceeded only 
     by Canada.
       In recent years, Nebraska's exports to Mexico have 
     increased far more than the state's exports to any other 
     nation. In 2000, the state's exports to Mexico totaled $266 
     million. In 2002, they totaled $465 million.
       Free trade does not promise an economic utopia. In fact, a 
     free market by definition means that a society will face a 
     certain degree of economic change--job losses, but also new 
     opportunities. The proponents of ``fair trade,'' in contrast, 
     exaggerate the ability of their ideas to cocoon the U.S. 
     economy from the marketplace.
       Change is inevitable. A free-market system, bolstered by 
     open trade, best encourages the dynamism and flexibility that 
     enable a national economy to prosper.




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