That’s because the enemies of free trade are well organized and hungry for a legislative victory. With the possible exception of blocking presidential Trade Promotion Authority for awhile in the 1990s, they haven’t achieved much for a long time.
Their fundamental problem is that they stand on the wrong side of history. Ever since the end of the Second World War, countries increasingly have recognized that their economic prosperity is linked to the global marketplace, and virtually all of them have strived to make international trade more open rather than more restricted. Only nations like North Korea have believed otherwise.
Everybody wins when trade barriers fall. They increase opportunities for business to export their products and they give consumers more choices about what to buy. This is the logic that has inspired the United States to lead the world in promoting trade liberalization, and it is the rationale behind a series of trade pacts the Bush administration has negotiated with Australia, Chile, Jordan, Morocco, and Singapore.
Each one of these has been a good deal for Americans. Consider a single example: In the first six months following last year’s free-trade agreement with Chile, American exports to that slender country rose by 32 percent.
CAFTA is next in line. It involves six countries: Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
None of these nations is especially large, but all together they include 44 million people and represent our second-largest export market in Latin America (Mexico is first) and America’s 13th-largest export market globally. Sales to these countries are already bigger than sales to India, Indonesia, and Russia combined. Studies indicate that CAFTA would boost manufactured exports by $3 billion and farm products by $1.5 billion annually.
Of course, we could swear off these benefits and let somebody else scoop them up. Argentina, Canada, Chile, and Mexico already have CAFTA-style agreements with these countries, and they’re no doubt scrambling for more business in a region that’s experiencing lots of economic growth.
Passing CAFTA now would put us on a level playing field with these competitors. This agreement would substantially lower the tariffs they now put on our products. Their products coming into the U.S. are already mostly tariff-free.
The Brazilians and Europeans can’t be ignored, either. They don’t have CAFTA-type agreements, but they’re always on the lookout for new opportunities. We’d give ourselves an advantage over them by approving CAFTA.
That’s an advantage U.S. farmers certainly could use. We grow many products that Central Americans would purchase, such as apples, grapes, peaches, pears, onions, sweet corn, and lettuce.
Some have suggested that CAFTA would devastate the domestic sugar industry, but I’m not convinced. The Department of Agriculture says that a healthy diet for the average American includes the consumption of about 70 teaspoonfuls of sugar per week. Under CAFTA, increased sugar imports during the first year would amount to about one and a half teaspoons of sugar per person each week.
That doesn’t sound like a gargantuan sacrifice for sugar. Not when it’s balanced against the fact that these modest transactions also will help keep consumer prices in check.
The protectionists are already throwing temper tantrums over this, but we must keep in mind that they’re nothing but an outspoken set of special interest groups. Protectionists don’t protect our interests, but rather their own interests–and we’re doing ourselves a huge disservice if we confuse the two.
CAFTA is a good deal for America. I welcome the beginning of the debate, and as much as I hope it concludes quickly and with a positive result, I also hope it increases everybody’s appreciation for the importance of free trade.