Democracy and Trade


“It has been said that democracy is the worst form of government except all those other forms that have been tried from time to time,” said Winston Churchill, more than half a century ago.

It is a piece of wisdom the people of Iraq soon may learn. Having suffered through a brutal dictatorship, they indeed will have a compelling point of comparison.

The United States transferred sovereignty to Iraq’s interim government on June 28. Next year, on January 31, the Iraqis are scheduled to enjoy democracy’s ultimate political freedom: the right to vote.

If Iraq is going to thrive, of course, its people will require more than political freedom. They will need economic freedom as well. And that means they will have to build a whole series of institutions that make economic freedom possible, including the right to private property, the rule of law, and a stable currency.

One of the most important ingredients in this mix will be international trade.

Americans will advise Baghdad’s new government on all these matters. The United States certainly has much to teach. Daniel Griswold of the Cato Institute recently reported that there are more McDonald’s franchises in the Netherlands than in the entire Arab world. That’s not because Middle Easterners don’t like Big Macs, but because fickle business regulations make it virtually impossible for potential entrepreneurs to open franchises.

Ultimately, it will be up to the Iraqis to avoid these problems as they make a new start.

International trade is a little bit different–by definition, the Iraqis can’t engage in it by themselves. Every transaction needs a buyer and a seller, and the Iraqis will need willing partners if they’re to exchange goods and services across borders.

The United States is pumping billions of dollars into Iraq right now. Our support shouldn’t stop with aid–it should also include trade. If we allow the Iraqis to sell their products in American markets, we’ll make an important contribution to their prosperity.

We’ll help ourselves as well. In the 1980s, Iraq bought almost $1 billion in U.S. farm products per year. It will take time to reach this level again–but we should remember that Iraq, with its massive oil reserves, ought to be a wealthy country. Trade with the Iraqis won’t be a one-way street for long.

America’s war on terrorism began when Osama bin Laden ordered the destruction of the World Trade Center. The U.S. response first involved the hard power of military retaliation. Now, increasingly, it will call for the soft force of free trade.

I can’t think of a more fitting way to avenge the 3,000 people murdered by terrorists on 9-11.

That’s what we’re doing in Afghanistan, where the White House recently completed a trade and investment framework agreement (TIFA) that is an early step on the road to a full-fledged free-trade agreement (FTA).

The United States also recently signed a trade and investment framework agreement with five central Asian countries: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. It’s hard to look at a map and fail to understand the geopolitical importance of these nations.

To be sure, they are not currently major trading partners with the United States and probably never will be. Last year, we imported $570 million from the region and exported $548 million to it.

But, if our war on terrorism is to prevail, we’ll have to strengthen ties to countries with large Muslim populations. More and freer trade is an ideal way of doing it.

The alternative to economic engagement is economic isolation. That’s where the protectionists want to take us. One current bill in Congress would require all cargo containers bound for the United States to be physically inspected and sealed by representatives from the Department of Homeland Security. This would involve deploying armies of Customs agents to ports and airports outside American borders–a logistical nightmare that would squelch commerce and create anti-American resentments in countries whose approval we should be seeking.

It is worth noting that the sponsors of H.R. 1010–the so-called Port Protection Act–are staunch enemies of free trade. They say they’re trying to enhance homeland security, but it’s very difficult not to see a hidden agenda at work.

We do need to protect our ports. That’s obvious. Shutting them down, however, is like burning a village to save it.

Instead of burning villages, we should be trading with them. I hope that soon we’ll be trading with villages in Iraq. The first time I’m in a store and see a product labeled “Made in Iraq,” I’m going to buy–and consider it an act of American patriotism.

Dean Kleckner

Dean Kleckner

Deceased (1932-2015)

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