Now Korea is cleaning our clock
“The entry into force of the U.S.-Korea trade agreement on March 15, 2012, means countless new opportunities for U.S. exporters to sell more made-in-America goods, services and agricultural products to Korean customers — and to support more good jobs here at home.”
Thus did the Office of the U.S. Trade Representative rhapsodize about the potential of our new trade treaty with South Korea.
And how has it worked out for Uncle Sam?
Well, courtesy of Martin Crutsinger of The Associated Press, the trade figures are in for April, the first full month under the trade deal with South Korea.
And, surprise! The U.S. trade deficit with Korea tripled in one month. Imports from South Korea jumped 15 percent to $5.5 billion in April, while U.S. exports to South Korea fell 12 percent to $3.7 billion. Suddenly, the U.S. trade deficit with Seoul surged to an annual rate of $22 billion.
Shades of NAFTA. When it passed in 1993, we had a $1.6 billion trade surplus with Mexico. By 2010, our trade deficit with Mexico had reached $61.6 billion.
There is other news of interest in those trade figures for those who chronicle the industrial decline of the United States.
In 2011, America ran the largest trade deficit ever with a single nation, $295.4 billion, with China. But this year, the U.S. trade deficit with China is running 12 percent ahead of 2011.
And the U.S. trade deficit with the world is now back up over $600 billion a year.
What do these mammoth and mounting deficits mean?
A deepening dependence on foreign nations for the necessities of our national life. A steady erosion of our manufacturing base. A continued stagnation in the real wages of the middle class. And an unending redistribution of America’s wealth to foreign lands.
It is no coincidence that the real wages of U.S. workers ceased to rise in the mid-1970s, just as a century of U.S. trade surpluses was coming to an end.
In 1975, we began three decades of trade deficits that grew until, in the Bush II years, they reached 8 percent of the entire economy. These deficits helped to precipitate the Great Recession and helped to prevent our rescue from it.
For just as a trade surplus adds to the gross domestic product of a nation, a trade deficit subtracts from it, substituting foreign goods for U.S.-made goods.
If one would, in a sitting of a single hour, understand where and why America converted from the economic patriotism of Washington, Hamilton, Jefferson, Madison, Jackson, Lincoln, Theodore Roosevelt and Cal Coolidge to the free-trade ideology of academics and ideologues, none of whom ever built a great nation, let me commend a splendid pamphlet from The Conservative Caucus.
“The Conservative Case Against Free Trade,” by Ian Fletcher and William Shearer, is a brisk walk through the trade and tariff history of the republic. It is a short story of national decline, of how a nation that converted itself in its first century from 13 agricultural colonies into the greatest industrial power the world had ever seen began to kick it all away in the third century of its existence.
It is a chronicle of the rise and fall of the United States as a sovereign and self-sufficient republic.
The knock on economic nationalists is that they really do not believe in trade.
This is nonsense. Like libertarians, economic patriots believe in untrammeled free trade among the states of the Union.
They believe in the 14th Amendment’s equal protection of the law. U.S. wage-and-hour laws, civil rights laws and environmental laws should apply equally to factories from New York to New Mexico and from Alabama to Arizona. If states wish to adopt their own right-to-work laws or abolish corporate income taxes, that is free and fair competition.
Global free trade is an altogether different matter.
If you move your factory to Mexico, Guatemala, Vietnam, China or Bangladesh, the 14th Amendment no longer applies.
Global free trade means U.S. workers compete with Asian and Latin American workers whose wages are a fraction of our own and whose benefits may be nonexistent. Global free trade means U.S factories that relocate to Indonesia or India need not observe U.S. laws on health, safety, pollution or paying a minimum wage.
Global free trade means that companies that move factories outside the United States can send their products back to the United States free of charge and undercut businessmen who retain their American workers and live within American laws.
Free trade makes suckers and fools out of patriots.
Anticipating the Davos crowd, Thomas Jefferson wrote: “Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.”
Instead of a trade policy crafted for the benefit of multinationalist corporations, we need a new trade policy that puts America and Americans first.