Americans Have No Cause to Be Timid : Trade: U.S. companies and workers are the world’s strongest, able to compete in fully open markets.
Having returned from overseas after a three-year sojourn, I find that the voices of cowards in our country have gotten louder. It’s troubling.
Fear of immigrants, fear of lawsuits, fear of offending people by honest speech--it’s all on the upswing and it’s gnawing at what makes our country great.
But if we define cowardice as the fear of defeat even while holding overwhelming advantage, then those who counsel retreat from the international marketplace are truly our nation’s most abject cowards. Unfortunately, the chorus of hand-wringers and wall-builders are winning converts to the idea that the United States--the most advanced, productive and efficient nation on earth--cannot compete with Mexico or China.
This vision of U.S. weakness is not shared overseas. Competitors from Tijuana to Tianjin look at the United States and see the following:
* Our agricultural commodities are the best and cheapest in the world and our processed food industry is light years ahead of anything they can hope to have.
* In manufacturing, after a decade of restructuring we now have the most productive labor force on earth. Our nation’s wage rates are much higher than Third World rates, but that is because our workers produce more, in quality or quantity, and so are “worth” higher wages. The American worker often has more technology at his disposal than entire factories have in the Third World.
* In consumer goods, our brands are the best known on earth: Levis, Coke, 7-Up, Sara Lee, Johnson and Johnson, Procter & Gamble--these brands are not soon going to be displaced by Mexican or Malaysian brands. While some of the products carrying these labels are made in lesser developed countries, the profits remain in the hands of Americans.
* The U.S. market is the most lucrative, so U.S. companies are already ahead of the game. Sure, some foreign competitors have locks on their own small sectors in their home markets. But our $6.7-trillion economy creates wealth and opportunity that can only be dreamed of overseas. (Asian nations may enjoy breathtaking growth rates, but when the mighty U.S. economy chugs out 4% growth, the value of the increased production in just one year is greater than the entire economy of Taiwan.)
* Finally and most tellingly, the U.S. dominates trade in international services, a sector that the wall-builders ignore but which accounts for more than half of our nation’s GDP and employs half of our work force. U.S. banks, mutual funds, airlines, accounting firms, motion-picture makers and myriad consultants raked in $209 billion in exports in 1995, producing a very healthy $63 billion trade surplus.
With these strengths, what will help U.S. companies most? Open markets and open trade. Yet what are the trade cowards recommending? Pulling out of trade agreements and erecting trade barriers here against Third World competition. It’s pretty obvious where that path will lead: to closed markets worldwide. It is a policy of mutually assured impoverishment.
Washington may, as some critics allege, have oversold the immediate indirect benefits of trade agreements on the environment, immigration or protection of human rights, probably because free trade opponents were predicting such dire consequences. But the underlying logic makes sense. Studies show that as a nation becomes wealthier it devotes more money over time to quality-of-life issues like the environment that once were seen as a luxury. As a closed society becomes more open to U.S. companies and ideas, then over time our management style and values will influence it. But this cannot happen quickly.
Will more international trade cost jobs? Yes. It will also create jobs, like the 840 longshoremen added over the past two years at the ports of Los Angeles and Long Beach. Changing technology destroys jobs too. There are not a lot of people making rabbit-ear antennas anymore for the U.S. market, but there are a lot of people in the coaxial cable business. We cannot be a strong and productive society by standing still.
We have the mightiest economy, the most innovative companies and the most productive work force in the world. In short, we’ve got respect. When you meet these people who want us to to run away from competition, remind them what Franklin Roosevelt said about fear.
