December 19, 2004
the US a free-trade
Yes. And no. It depends on
who's doing the trading. The US is without
question a free trade country when it comes to exports. US exporters
want unrestricted access to foreign markets, and have the WTO, IMF and
US Air Force, Army, Navy and Marines to back them up. Imports are
another matter. China is imposing "voluntary" restrictions on its
exports of textiles to the US because Washington has signaled it won't
tolerate unrestricted access to its home market (1). Vietnam has
already "voluntarily" done the same.
In the '80s Japan slapped
export quotas on its automobile industry to
avert threatened retaliation from "free-trading" Washington. The
Japanese either had to mix a little water with their sake, or find
themselves on the losing end of a trade war with the much larger US.
Trade disputes between the
two countries are hardly new.
"The lands of the far
shores of the Pacific Ocean played an
increasingly important role as markets for American export products and
as sources of cheap raw materials and labor. But in the thirties
America faced the competition there of an aggressive rival power that
sought to realize its own imperialist ambitions in China and in rubber-
and oil-rich Southeast Asia. This competitor was Japan, the land of the
rising sun, which did not shy away from violence in order to build up a
sphere of influence of its own. What bothered the United States was not
that the Japanese abused their Chinese and Korean neighbors as
Untermenschen, but that in that part of the world they erected their
own closed economy where American competition found no open door. When
the Americans protested against this, Tokyo offered to apply in China
the principle of non-discriminatory trade relations on the condition
that the Americans did the same in their own sphere of influence in
Latin America. However, Washington wanted reciprocity only in the
sphere of other imperialist powers, and not in its own. The Japanese
offer was rejected”(2).
An escalating series of
demands, counter-demands, threats and sanctions
followed, eventually culminating in war.
Disputes over free trade
also played a role in the growing tension
between Nazi Germany and the United States. US exporters balked at the
Nazi policy of autarky, blocking imports from other countries to
achieve economic self-sufficiency, the complete opposite of free-trade.
They were even more exorcized when the Nazis extended the policy to
their newly established greater economic zone, a closed economy
comprising countries the Wehrmacht had conquered. To make matters
worst, Germany had embarked on a trade offensive in Latin America,
increasing its exports to Brazil, Chile and Mexico, at the expense of
US exporters (3).
Great Britain, on the other
hand, proved far more congenial to
America's trading interests. It was the principal beneficiary of
Washington's policy of cash and carry, which stipulated that customers
for arms manufactured in the US must pay cash and transport the
armaments themselves. Since the British Navy dominated the North
Atlantic, Britain was the customer of choice. Eventually, cash and
carry would give way to the policy of lend-lease, in which Britain
received arms and other goods in exchange for promising to dismantle
protectionist barriers which limited US exports to Britain and its
dependencies. Accordingly, an alliance with Great Britain held
out the promise of expanded export opportunities, while growing Nazi
domination of Europe threatened US trade (4).
Unrestricted trade is often
presented as the best possible plan for the
best possible state of society. Indeed, George W. Bush's September 2002
National Security Strategy even elevates free trade to a moral
principle. “The concept of 'free trade' arose as a moral principle even
before it became a pillar of economics," remarked Bush. But this is
more rhetorical than real. For example, no sooner had Bush used his
national security strategy to place 'free trade' on a moral pedestal
than he began backpedaling, promising that "the benefits of free trade
would not come at the expense of American workers." And of course they
won't if free trade is one way.
By the mid-19th century,
Britain was a big advocate of free trade. And
why not? Industry in other countries was too immature to compete
against the industrial giant Britain, the workshop of the world. Free
trade would mean continued domination by British capital of world
markets and the continued destruction of handicraft industries abroad
by cheaper, British machine-made commodities, and hence, the
further expansion of British export markets. In Britain, it was easy to
regard 'free trade' as a pillar of economics, the best possible plan
for the best possible state of the world.
But that's not the way
others saw it. In the United States, northern
industrialists favored a policy of tariff barriers as protection
against cheap British imports. On the other hand, plantation owners of
the south, who depended on export markets for their cotton and wanted
access to cheap imports from abroad, favored free trade. But with the
defeat of Confederate forces by the North in the Civil War, the United
States joined the ranks of other industrializing countries, like
Germany, and erected protectionist barriers. Eventually, the industrial
bases of a few "advanced" countries, including the United States, grew
large enough to compete against British industry, and a scramble to
divide the world into colonies and spheres of influence -- that is,
fields for investment and exports -- ensued.
Today, the United States is
more like Britain of the mid-19th
century. Free trade is a boon to many investors and owners,
because, for the most part, it means access to markets abroad with
little threat of reciprocal competition. As a result, the US favors
free trade as a general rule, in the rhetorical sense absolutely, but
in the real, everyday, you export to me and I export to you sense, with
a big proviso: if it's good for US businesses, fine; otherwise, break
out the "voluntary" export quotas.
1. "China Relents, and
Promises Textile Tariffs," The New York Times,
December 13, 2004.
2. Jacques R. Pauwels, "The
Myth of the Good War: America in the Second
World War," James Lorimer & Company Ltd., Toronto, 2002, p. 67.
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