March 3, 2017
“Like it or Not, it IS a Global Economy!”
That statement begs the question, “How does the United States 1) increase good-paying, sustainable jobs for American citizens, 2) sell products in foreign countries, not just here at home, 3) use trade as a way to improve the world's environmental issues, 4) help foreign workers improve their wages and working conditions, and 5) correct our balance-of-payments deficit?
It cannot simply be about more American jobs and profits! Left to the corporate CEO's, whose salaries and bonuses are based on their company bottom lines, the future (which is how we got to where we are now) would be an afterthought. Few care about anything beyond their “bottom line.” Certainly the more important concern for American policy makers should be American jobs. They are the ones who vote, right?
However, every trade deal must begin with the understanding that there are two sides to every negotiation. There must be incentives on both sides for a workable deal to be reached. U.S. companies don't want foreign products coming into the country which undercut their sales and profits. The auto industry hated the idea of the Japanese car makers invading their space with smaller, more efficient vehicles, especially ones that were cheaper. The cry was “Buy American! You're un-American if you buy a foreign car!” Many people did just that, but enough saw that it was economically smarter to buy foreign. It took “Detroit” a few years to get the point. Better, cheaper, more fuel-efficient cars began to be built in the U.S. that were competitive. Eventually, foreign companies began to manufacture here in the U.S. The competition created a better industry! Everybody won! That being said, if the products had been of the same quality, then a tariff should have been imposed which brought the price of those foreign vehicles up to the equivalent American model. That would have been fair. Today, if Maytag wants to sell the same model washer in the U.S. that it made in Mexico, then its price should not be lower than an American equivalent model. (Of course, I believe that those companies who leave to find cheaper costs overseas should be required to repay all local, state, and federal “tax benefits, etc.” that they received which they used to create the business at the start. That's only fair!
However, some companies left the U.S. just because of the cheaper labor elsewhere. This problem actually provides an opportunity to attack several problems at once. If X Company has moved to, say, Mexico, to produce the same product much lower and then shipping it back to the U.S., the solution is a “floating tariff.” By this I mean a tariff which keeps the price no higher than the equivalent American-made product. The difference in price goes into a fund for displaced workers. This tariff can be reduced by the importing manufacturer in several ways. First, it must increase the wages of its workers, bring up their standard of living. Second, it must increase its investment in cleaning up its corporate environment (waste disposal, reducing air pollution, reducing its carbon footprint in numerous ways). These will increase the cost of its product and put it on a more level selling field with the American product which is already doing those things, which keeps its cost high. At this point, the two products can be sold in either country for basically the same price. The better product will always sell more. The incentive is to improve products. This sort of tariff approach helps balance the import/export balance of payments.
Trade opportunites should be open across all borders, giving the United States the same opportunity for sales as it does other countries. One product in particular that has been in recent news is Harley Davidson, a world leader in motorcycle production. Apparently their products are subject to heavy tariffs in certain countries. If they want to sell their motorcycles in the United States, those foreign producers should be subject to tariffs here until it's a level field. Perhaps their workers should be making better wages or the companies could be doing more to improve the global environment?
Trade could be the most powerful tool that we have to lead the world's environmental cleanup. Everyone wants to sell products in the United States. If they will improve the lives of their workers and clean up the air, water, and soil, their costs will be the same as ours. We share the planet, so we have to share the cost of saving it! Trade, jobs, and the environment must go hand-in-hand.
Robert Butler
P.O. Box 193
Marmaduke, AR 72443
"...Therefore, never send to know for whom the bells tolls; it tolls for thee...: Meditation 17 by John Donne 1624
