Jewish World Review Jan. 20, 2004 / 26 Teves, 5764

Lou Dobbs

JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
James Glassman
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
Michelle Malkin
Jackie Mason
Chris Matthews
Michael Medved
Kathleen Parker
Wes Pruden
Sam Schulman
Amity Shlaes
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports

U.S. selling itself short with "free" trade | Despite this week's report that our trade deficit declined in November, the 2003 U.S. trade deficit will be the largest on record, and our market is flooded with cheap foreign imports while consumers who want to buy American-made products often can't even find them.

Most Americans would like to support domestic manufacturers, but chances are the majority of us own goods made predominantly outside the United States. Wal-Mart alone will import nearly $12 billion in goods this year from China. Seventy-six percent of consumers who look for American-made goods say they have a hard time finding them, and the reason for this is simple: We've given away our manufacturing base through "free" trade.

In 1951 the average U.S. trade tariff was approximately 15 percent. By 1979 the average industrial tariff sank to 5.7 percent, and now our industrial tariff on foreign goods is just under 3 percent. As a result the United States has become the world's greatest customer, accumulating a trade deficit every year since 1976 - the cumulative total of which is a staggering $3.5 trillion. And countries like China, Japan, Germany, Canada and Mexico are the primary beneficiaries.

The United States' economy has become trapped in a vicious cycle in which we pay more and more money to the very countries to which we've surrendered our manufacturing base. The average manufacturing wage in China is 61 cents per hour while the average in America is $16. At least 75 percent of toys sold in the United States are foreign-made, according to the Toy Industry Association. Ninety-six percent of all clothing purchased in the United States is now imported. It's surprising that we've lost only 3 million manufacturing jobs in the past three years.

Donate to JWR

But companies also know that, given the choice, many American consumers would prefer to buy American-made products. And some companies are resorting to deception in an effort to convince U.S. consumers that their products are made in America. Unfortunately, there are no penalties in the United States for violators who make such false claims. Congressional intervention may be needed to ensure that companies that falsely claim their goods are made in America suffer severe consequences. But, to date, Congress' track record supporting American manufacturers has been less than stellar.

The United States certainly needs to ramp up efforts in identifying American-made products, but we also need to stem the tide of imports that drive our trade deficit ever higher. The first step should be the negotiation of bilateral trade agreements, not multilateral NAFTA-like agreements that result in millions of American jobs lost. Because of vast differences in wages and labor and production costs, the United States must consider trade agreements individually.

Amazingly, this week Federal Reserve Chairman Alan Greenspan referred to our record-high trade deficits as "seemingly uneventful." I assume the Fed chairman has heard the boiling frog analogy, in which a pot of water's temperature rises gradually to near boiling while all is seemingly uneventful for the ill-fated frog inside. But the Fed chairman apparently has no problem proclaiming the dangers of what he calls "clouds of emerging protectionism," apparently referring to a number of calls by members of Congress for this country to conduct fair and balanced trade. Those calls so concerned Greenspan that he said, "The costs of any new protectionist initiatives . . . could significantly erode the flexibility of the global economy."

Joining those members of Congress are Democratic candidates for the presidential nomination: Reps. Richard Gephardt of Missouri and Dennis Kucinich of Ohio, Sens. John Kerry of Massachusetts and John Edwards of North Carolina, and Vermont Gov. Howard Dean.

Trade has hardly become a central issue on the campaign trail, to this point. But I suspect it is about to. The United States can no longer afford the price of "free" trade.

Every weekday publishes what many in Washington and in the media consider "must reading." Sign up for the daily JWR update. It's free. Just click here.

Lou Dobbs is the anchor and managing editor of CNN's "Lou Dobbs Moneyline." Comment by clicking here.

01/12/04: Bush on the wrong track with immigration idea
01/05/04: Business leaders should resolve to lead by example in 2004
12/29/03: Immigration needs stricter, not looser, controls
12/11/03: Trade deficit with China a big problem
12/09/03: Let our children be children
12/01/03: Broken borders pose a serious health risk
11/25/03: Free trade costs plenty
11/18/03: European Union is playing a dangerous game
11/10/03: This time, it's not the economy
11/04/03: Overseas outsourcing is an alarming trend
10/28/03: Spending so much time 'making a living', we don't live
10/21/03: As population soars, U.S. faces tough choices
10/14/03: Schools need to re-emphasize math and science
10/07/03: It's lonely at the top
09/30/03: Is America over-medicating?
09/23/03: Corporate execs need to stop selling out U.S. workers
09/16/03: The scandals just keep on coming
09/09/03: Let's get real on energy
09/02/03: Is free enterprise the answer to education woes?
08/26/03: Building the road to recovery
08/12/03: War on drugs is still a war worth fighting
08/06/03: An attack on progressive thought
07/29/03: Prosperity begins at home
07/22/03: Real earnings, or really creative earnings?
07/15/03: Flirting with disaster
07/08/03: It's good to be the king
07/01/03: Border disorder
06/24/03: Prairie dogs and mosquito bogs
06/17/03: Bullish on America
06/10/03: Retirement realities: we need new solutions — soon
06/03/03: Curing what ails us
05/27/03: America's export problem
05/21/03: Wall Street's new imperative: Integrity
/13/03: Losing sight of the dangers in creating further fiscal stimulus
05/06/03: Optimism is unfashionable, but here's some anyway
04/29/03: Nuclear nightmare
04/22/03: Naysayers ignore signs of economic recovery
04/15/03: Game over--but for whom?
04/08/03: No more fool's games
03/31/03: United States must seriously review foreign economic and political relationships
03/24/03: Delusional Chirac may be a thorn in coalition's side, but new alliances are forming in response to 21st-Century threats without him and UN
03/18/03: Bush critics offer little more than hyperbole
03/11/03: Geopolitical visibility
03/04/03: Freedom: Our best export
02/27/03: Guns, butter and greasing the way
02/18/03: Looking for a silver lining
02/10/03: Space program remains a valuable investment
02/04/03: Hi pal, come back
01/28/03: Bush address a chance to bolster confidence
01/22/03: Here we go again!
01/14/03: Bush's bold bid
01/07/03: The only thing certain is uncertainty
12/30/02: No need to be so negative as new year approaches
12/23/02: NY's AG deserves credit for settlement
12/18/02: Critics of Bush nominees should tone down rhetoric
12/09/02: A lot rides on prez's Treasury pick
12/04/02: A fast fix for corporate credibility?
11/26/02: Urge to merge is hard to resist
11/19/02: Are we really so bad off?
11/12/02: Bush's lucky week bodes well for recovery
11/05/02: Wall Street firms treat investors as fools
10/29/02: Earnings estimates offer some hope
10/22/02: Economy's strength tied to national security
10/17/02: Harvey Pitt, get real!
10/08/02:Are we experiencing the fall before the rise?
10/01/02: Concerns about earnings are justified
09/24/02: Business leaders must abandon stall tactics
09/17/02: Wall Street's reality check
09/12/02: There's no better time for leaders to show resolve


© 2003, TMS