The negative rhetoric in Washington, D.C. about trade has reached a fever pitch as three trade agreements stand untouched in Congress and some presidential candidates threaten to renegotiate deals or take a “time out” from trade if they are elected into office.
This type of talk comes as we mark the 69th anniversary of one of America's most respected and influential presidents dedicating a full week to highlighting the critical nature of trade in our country.
President Franklin D. Roosevelt designated World Trade Week to celebrate the United States' gradual recovery from the Great Depression, fueled in part by an increase in international trade and commerce.
“Increased foreign trade yields large dividends in terms of economic well-being and friendly relations with other nations; but to secure it there must be fair exchange,” wrote Roosevelt. “We must take, as well as give; import, as well as export. We shall profit by doing so.”
His words ring as true today as they did in 1939.
Six years after the celebration of the first World Trade Week, the end of World War II sparked new awareness among American legislators and businesses of the potential diplomatic and economic benefits that could be achieved through trade.
Over the years trade has played a vital role in the expansion of our country and its economy, and paved the way for diplomatic exchanges like no other tool in American history.
In recent years, however, trade has been treated as a dirty word in America and seen by some as an impediment to our country's growth. During this election season, in which free trade is taking a pounding, I can't help but wonder if America is ready for a repeat of the aftermath created when President Herbert Hoover signed the Smoot-Hawley Tariff Act in 1930.
During his campaign, Hoover promised to take care of a particular working sector, the American farmer. He thought Americans couldn't compete with foreign producers due to their lower wages and cost of living.
His signing of the Smoot-Hawley bill raised U.S. tariffs on over 20,000 imported goods to record levels, and contributed to the severity of the Great Depression. Many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half.
Today, some members of the U.S. Congress would like to follow Hoover's lead and close our doors to trade. To do so would have a catastrophic impact on business owners, their workers, and related industries.
Leaders in Congress have claimed their primary focus is reinvigorating the U.S. economy, but they fail to recognize the role trade plays in this equation. This lack of insight could plunge us deeper into economic uncertainty.
According to a University of Michigan study, the average U.S. family of four still stands to gain an estimated $7,800 per year if there was total elimination of global barriers to trade in goods and services.
The World Bank has reported that the elimination of global trade barriers could lift 300-500 million of the world's poor out of poverty over the next 15 years. For these economic reasons, and for the countless other benefits gained in the foreign policy arena when the U.S. opens markets with its allies, we are called to act.
In this, or any economy, America can simply not afford to repeat the mistakes of the past or send signals to other countries that we are unwilling to go to new markets.
Congress must recognize the broad benefits of free trade, and vote to approve the three pending free trade agreements they are currently doing their best to ignore. All such agreements stimulate U.S. exports to the benefit of U.S. businesses, workers, and consumers.
Cody Lusk is president of the American International Automobile Dealers Assn. representing 11,000 international nameplate dealership franchises in the U.S.
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