Buchanan: Will the GOP Capitulate Again?

Pat Buchanan has always been right on trade!

By Pat Buchanan, Townhall.com, February 20, 2015

“Free trade results in giving our money, our manufactures, and our markets to other nations,” warned the Republican Senator from Ohio and future President William McKinley in 1892. ”Thank God I am not a free-trader,” echoed the rising Empire State Republican and future President Theodore Roosevelt.

Those were the voices of a Republican Party that believed in prospering America first.

For a quarter century, however, the party of the Bushes has been a globalist, New World Order party, and fanatically free trade. It signed on to NAFTA, GATT, the World Trade Organization, most-favored-nation status for China, CAFTA, and KORUS, the U.S.-Korean trade treaty negotiated by Barack Obama.

So supportive have Republicans been of anything sold as free trade they have agreed to “fast track,” the voluntary surrender by Congress of its constitutional power “to regulate commerce with foreign nations.” With fast track, Congress gives up its right to amend trade treaties, and agrees to restrict itself to a yea or nay vote.

And who is leading the fight to have Congress again surrender its power over trade? The GOP vice presidential nominee, and current chairman of ways and means, Paul Ryan.

Yet when one looks back on the devastation wrought by free trade, how can a party that purports to put America first sign on to fast track yet again? In the first decade of this century, the United States lost 5 to 6 million manufacturing jobs. We lost 55,000 factories, a devastation of industry not unlike what we inflicted on Germany and Japan in 1944-45.

The trade figures are in for 2014. What do they show?

The United States ran a trade deficit of $505 billion. But as the Economic Policy Institute’s Robert Scott points out, in manufactured goods, the U.S. trade deficit rose to $524 billion, a surge of $77 billion over 2013. The U.S. trade deficit with China soared to $342 billion. Our exports to China amounted to $125 billion. But our imports from China were almost four times as great, $467 billion.

Since Jan. 1, 2000, U.S. trade deficits with China have totaled an astronomical $3.3 trillion.

How do Clinton, Bush II, and Obama defend these trade deficits that have done to our country exactly what McKinley warned they would do in 1892—given away “our money, our manufactures, and our markets” to Communist China? Have the Chinese reciprocated for this historic transfer of America’s productive capacity and wealth by becoming a better friend and partner?

While the United States ran a $505 billion trade deficit overall, in goods we ran a trade deficit of $737 billion, or 4 percent of GDP. And while our trade deficit in goods with China was $343 billion, with the European Union it was $141 billion, with Japan $67 billion, with Mexico $54 billion, with Canada $34 billion, with South Korea $25 billion.

Our Mexican neighbors send us illegal migrants to compete for U.S. jobs. And our multinationals send to Mexico the factories and jobs of Middle America, to exploit the low-wage labor there. One can, after all, assemble Fords more cheaply in Hermosillo than Ohio.

Of particular interest is Korea, with which the United States signed a free-trade agreement in 2011. Since then, U.S. exports to Korea have fallen, U.S. imports have risen 80 percent, and we ran a $25 billion trade deficit in 2014. With the KORUS deal the template for the new Trans-Pacific Partnership, how can Republicans vote to throw away their right to alter or amend any TPP that Obama brings home?

Was the national vote to give Republicans majorities in Congress unseen since 1946 a vote to have the GOP turn over all power to write trade treaties to Obama and his negotiators who produced the greatest trade deficits in American history? Do these record deficits justify such blind confidence in Obama? Do they justify Congress’ renunciation of rights over commerce that the Founding Fathers explicitly set aside for the legislative branch in Article I of the Constitution?

“If we don’t like the way the global economy works,” says Paul Ryan, “then we have to get out there and change it.” No, we don’t. The great and justified complaint against China and Japan, who have run the largest trade surpluses at our expense, is that they are “currency manipulators.”

Correct. But the way to deal with currency manipulators is to rob them of the benefits of their undervalued currencies by slapping tariffs on goods they send to the United States.

And if the WTO says you can’t do that, give the WTO the answer Theodore Roosevelt would have given them.

Instead of wringing our hands over income inequality and wage stagnation, why don’t we turn these trade deficits into trade surpluses, as did the generations of Lincoln and McKinley, and T.R. and Cal Coolidge?

h/t: Townhall.com

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Comments

  1. William Smith says:

    And who pays for these high tariffs? The American consumer.

  2. William Smith says:

    And who paid for high tariffs before the War? The South.

  3. And high tariffs lead to trade wars. And trade wars lead to conflict between nations. And conflict between nations can lead to “hot” wars. There’s an old saying, “What goes around, comes around.” Japan’s economy has still not recovered from the currency manipulationso of the 1990s. China has already beginning to feel the effects. It may not be as susceptible to dramatic shifts as the Western and Japanese economies due
    to its stricter central controls, but that does not make it immune.

    • Trade wars? We are in a trade war now, we just seem to be too dumb or corrupt to realize it. China is certainly in a trade war with us! And not only a trade war, they are gunning for us in other ways as well, including militarily. And if high tariffs are so bad for an economy, why did we, using very high tariffs for more than 70 years (say from 1860 to 1930), have unsurpassed economic growth? We grew from a second rate power to the world’s economic superpower with high tariffs. And the only thing dummy economists have to say about it is that we grew “DESPITE” the tariffs. Well that’s like Obama’s “saved jobs” category, there’s no way to measure it!

      • frank gordon says:

        Everyone seems to be so enthusiastic about “free trade”. I’ve got an idea. How about “profitable trade”? Is that a dirty word?

      • Yeah I like calling it “fair trade” or “reciprocal trade.” Why should we throw open our markets to nations who will not do the same for us?

      • It’s a given that developing economic nations will use tariffs and currency manipulation so long as the other nations go along and allow it to happen. But as I said before, too strong of counter measures, and a country runs the risk of unintended consequences, up to and including a “hot” war. Between 1860 and 1940 America was prepared to conduct a “hot” war to back up our economic policy. When we decided to pursue a new world order under the auspices of the United Nations, America traded in its gunboat diplomacy for for a new world order based upon international agreements, mediation, and arbitration in the hope of avoiding major wars, thereby creating a more just and safe world. So far, the theory seems to be working–no major wars since WW II–just stupid regional disputes. In return we have seen the dissolution of the Soviet Union, the substantial privatization of the Chinese economy and it’s coordination into the world economy so that our economic, and ultimately, our political interests are/will be interconnected, an economically stable Western Europe, rapid economic development in a politically stable Southeast Asia, and with Brazil leading South America into the 21st century. Since we do not live in a unipolar world where America is the sole major economic and military power on earth, the UN and WTO modelso work to protect the status quo economic powers, yet at the same time tales into account the needs of emerging markets to grow. Contrary to Mr.Buchanan’s position, it is very much in keeping with Bismarkian Realpolitik.

    • frank gordon says:

      After the founding of the nation, the very first act passed by Congress was to impose tariffs that would protect American metal production. Nuff sed.

  4. frank gordon says:

    To David who says:

    “–no major wars since WW II–just stupid regional disputes.”

    So you do not believe the invention of nuclear weapons and Mutual Assured Destruction does not have an impact on the instances of declared wars between major powers???

    You do not believe that the invention of television, and later, the Internet, has limited the ability of governments to kill people on a massive scale without the world finding out?

    Yet everything has been so peaceful since WW2?

    Really?

    And all this “peace” that we enjoy is due primarily to the elimination of tariffs???

    I seem to live in a different reality than you. My world has been pretty much constantly at war since WWII. In my world, people have actually died in Korea, Vietnam, in the World Trade Towers, in Iraq, in Afghanistan, Maybe they are less dead somehow because of “Free Trade”?

    Tell the people’s families who died on 9/11 not to be concerned, because it was just a “stupid regional dispute”. And explain once again how they are better off due to “Free Trade”???

    • Hey Frank:Respectfully, you missed my point. The senseless wars to which you make reference were not a result of conflict brought about due to trade disputes and competition for economic resources. These conflicts have been limited to their geographical regions respectively. Their cause belli has been mainly due to rising nationalism, ethnic cleansing, and that old time favorite–sectarian/religious disputes fought in the name of a jealous god. Trade agreements on the other hand promote better understanding between nations and their diverse cultures, a unity of purpose in the mutual pursuit of increased trade, which helps emerging markets to manufacture and produce more goods to be traded with other countries, which in turn creates a more stable world at the macroeconomic level. The U.S. is no longer an emerging nation. We became a status quo power following WW II. As such, Pat Buchanan knows that it is in America’s long-term economic and political interests for the world to remain as stable as possible. To encourage that stability, we enter into various trade, manufacturing, and other economic agreements. This policy has served America well through various presidential administrations, including Ronald Reagan.

  5. Encourage everyone to read this book. You’ll learn, or maybe just reconfirm your own understanding, that Frazier’s free trade utopia, this font of peace, harmony, global stability and “better understanding between nations and their diverse cultures”, doesn’t exist.

    • Hey JT: Please identify one international military conflict that has occurred since 1945 that spread beyond the regional boundaries of the main protagonists. The only ones I can think of are the Falklands, the Gulf War under George H.W. Bush; and the Afghanistan War and the Iraq War a/k/a The Halliburton War of Economic Aggression pursued under George W. Bush.

    • frank gordon says:

      I suppose if you consider the whole world since 1944 to be a single region, then there are no wars spilling over regional boundaries any more. Maybe if we just pretend these wars don’t exist, they will go away.

      (Not.)

      • Korea has always been a struggle over national control and has been limited to Northeast Asia–for now. Vietnam was a civil war for national control and was contained within Southeast Asia. Conflicts in Africa have all been contained within their specific regions. The Balkan Wars have been contained within the affected region. Russia has kept its aggressive actions contained to areas that have historically been within its sphere of influence. Except for the occasional act of terrorism spilling over, the Middle East conflict has been fairly well contained–for now. The key to Pat’s theory on foreign policy is that he is a classical follower of Bismarkian Realpolitik. He believes that the U.S. should only get involved in foreign conflicts if our vital national interest is at stake. And for the most part, he is correct. However, he often times fails to see the big picture when it comes to trade, diplomacy, and our vital national interest.

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