05.19.2011 0

Free Trade Agreements Held Hostage

By Adam Bitely — Free trade agreements between the U.S. and Colombia, Panama, and South Korea are being held hostage by the Obama administration. The White House is demanding that taxpayers pay for job retraining and other costs associated with people whose jobs are affected by trade with foreign nations.

While this assistance sounds nice, it is a bad practice. Nobody wants to see their neighbor unemployed, but at the same time, nobody should be coerced to pay for their neighbor’s well being.

The nonsense that is causing these trade agreements to be held up is centered on funding levels for the Trade Adjustment Assistance Program (TAA), a program that is administered by the Department of Labor. The White House and other politicians that distrust free trade are arguing that funding levels for the TAA need to remain at 2009-10 levels.

Senator Orrin Hatch told the New York Times that, “It makes no sense to shut the door on increasing U.S. exports by over $10 billion in order to fund a costly program. With our economy struggling and our nation broke, it’s time to stop the excuses and give our exporters fair access to international markets.”

The programs are indeed costly. The TAA, established by the Trade Act of 1974, costs taxpayers more than $1 billion annually.

As George Mason University Economics Professor Don Boudreaux stated on his blog CafeHayek.com, “Pres. Obama here seeks to subsidize certain workers against the downside of being part of an open, competitive, and dynamic market economy. Preventing consumers from dealing more freely with foreigners until and unless Congress authorizes such subsidies, however, is economically unjustified because there’s nothing unique about international trade in ‘destroying’ jobs.”

International trade doesn’t destroy jobs as some politicians argue. In fact, resources are allowed to go towards their most efficient uses as markets become competitive. Even though some jobs move to different parts of the world, the overall benefits to Americans far outweigh the costs of the jobs moving.

Don Boudreaux asks people to think about different situations where taxpayers could be asked to foot the bill for job retraining because of successful business ideas. As Boudreaux questioned, “Would it have been appropriate, for example, for the White House to prevent Americans from buying iPods and Kindles until and unless Congress funded the retraining of workers who lost their jobs at Tower Records and Border’s? Should government have stopped automakers from improving the quality of their vehicles until and unless the public fisc was tapped for funds to retrain auto mechanics and tow-truck drivers?”

These politicians drunken with spending to fix any problem they see with society should not hold free trade agreements hostage. No one should be coerced to pay for programs that are completely unnecessary and artificially raise the cost of doing business.

It’s time for politicians to step aside and allow trade between Americans and Colombia, Panama, and South Korea to flourish. These supposed public servants are doing a great disservice to the people they represent when they prevent free Americans from conducting business with people in other lands. If the politicians standing in the way of these free trade agreements want to represent the best interests of all Americans, they will immediately allow these agreements to become law and stop standing in the way of American businesses.

Adam Bitely is the Editor-in-Chief of NetRightDaily.com. You can follow Adam on Twitter at @AdamBitely.

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