Free Trade?
For Whom?

It may sound good, but, like the proverbial "free lunch," Free Trade isnít free.

Industrialists insist that their factories must move overseas in order to be "globally competitive." But until American industrialists moved their factories offshore there was little competition. They have created their own bogeyman.

Proponents of free trade believe every country should be able to manufacture or grow some product much more economically than other countries, and therefore, with free trade, all nations would benefit by receiving the lowest price on every item produced. Though it seems reasonable, it just doesnít work that way.

One of the major problems is wages. The United States, Canada and European nations pay much higher wages than third-world nations. Since labor is part of production costs, the items would be cheaper in third-world countries. Secondly, some nations, which have surplus commodities, often subsidize their industries and farm products, selling them at a lower price, this is especially true in Europe.

Now in reading this one would think that we should be enjoying much lower prices on the items we import. Have you noticed any major drop in prices? No? So whatís happening to these excess profits?

If an American factory pays 500 workers an average of $8.00 an hour thatís $4000 an hour or $32,000 a day, which is $640,000 a month (20 day work month), or $7,680,000 a year. Of course this does not include health, social security and retirement benefits, nor does it include safety and pollution measures mandated by our government which would more than double that amount. However, if the factory moves to Indonesia and pays 500 workers $.25 an hour the total wages become $125 an hour, $1000 a day, $20,000 a month, or $240,000 a year, with no benefits nor government oversight. This leaves management well over $7,440,000 to play with. Most of this goes into managementís pockets.

But what these former American industrialists ignore is the fact that their industries were able to start, grow and prosper because they were supported by the American people and the American way of life. And many industries received taxpayer's money for research and development; consequently much of the technology actually belongs to the American people. 


But not any more! Though the North American Free Trade Agreement (NAFTA) made incursions on our right of self-government, these infringements of our Constitution were minor compared to what followed after signing the General Agreement on Tariffs and Trade (GATT).

Under GATT, the World Trade Organization (WTO) was established. One of the problems with the WTO is that all member nations have one vote. In other words, the Unites States has the same influence on decisions as the island of Haiti, even though there is a great discrepancy in landmass, population, and gross national production between the two.

The WTO has a council in which the United States may not even be represented. Council decisions are rendered in secret and any appeals are also considered in secret. As an example, Mexico and other nations complained that the U.S. position of not importing tuna that does not protect dolphins is unfair. The WTO agreed. Bye bye dolphins! But that is only a minor example.

At issue are such concerns as pollution, pesticides, health and work standards. Since most third-world nations are more interested in agricultural and industrial development than in pollution, these countries permit industries (often American owned) to defile the entire planet. Pesticides, which are not permitted for use in the U.S., such as DDT, are used freely in many of the countries exporting fruits and vegetables for use in our homes. Nor do you have any idea of what health standards (if any) are enforced on imported meats. And whether the products you buy in the department stores were made by child labor or slave labor is not indicated on the label, but in all cases it was done for a negligible labor cost.

It all comes down to the simple fact that American companies have moved overseas, not out of the goodness of their hearts to help the downtrodden third-world peoples, but to exploit them. It is these industrialists, and the bankers who finance them, who pay off the ruling families and cliques who then permit the abuse of their citizens. Very little money, if any, ever winds up in improving either the standard of living of their citizens or for improvement of the infrastructure of their country.


America has the shame of slavery, sweat shops, and child labor on the side of management, and corrupt work rules and featherbedding on the part of labor. But America has seen a time of magnificence when both management and labor showed respect for each other and worked in harmony.

The turning point was the Second World War. Industry had almost unlimited funding, and, needing workers, was willing to pay good salaries. In return most labor worked hard and did not strike. Four years was a long time and set a precedence. Employees were used to working hard to receive good salaries and management was satisfied to pay them in order to produce a good product.

When the war ended, industries retooled for peacetime, and the civilian population, after years of shortages, was in a buying mood. The economy began to flourish. As people bought more, industries increased production, offering new products. The U.S. possessed the strongest economy in the world.

Then greed set in. Management, in order to reap more profit, cut corners on their products and initiated planned obsolescence. Labor, not to be outdone, failed to maintain its quality and quantity of work. Not to be outdone by either, the government began to interfere throughout private industry, establishing agencies to control all aspects of production, safety, environment, and labor.

Now management, seeking greater profits, has left the United States to look for cheap labor and to escape governmental interference. And once away from American soil they have no qualms about using child and slave labor. But American labor has lost its buying power and the question becomes; where will industry sell these cheaply produced goods?


When an industry closes its doors and moves overseas, employees are laid off. Of course these former personnel must find other employment. As a result, good paying jobs in America become scarce, and many people have been forced to work at two or more jobs to make enough money to survive.

Many of the companies remaining in the USA have been quick to take advantage of a glutted market of unemployed personnel by only offering employment for 28-hour workweeks at minimum wage. While this avoids the necessity of furnishing medical care or retirement benefits, minimum wage jobs cannot support Social Security funding.

Robert Reich, former Secretary of Labor, and other government officials have publicly stated that we donít need the eight dollar an hour jobsAmericans will have high paying, high-tech jobs! That some Americans may not have the training, the ability, or the desire to pursue a high-tech career never enters their minds. They also ignore the fact that many of our high-tech industries, such as electronics and some aviation, has already moved overseas.

Prior to his death, Secretary of Commerce, Ron Brown, stated each billion dollars in trade represented 20,000 jobs. Accordingly, with our present annual trade deficit of $138 billion, weíve lost 2,760,000 jobs. Worse yet, that $138 billion has been removed from the U.S. and transferred to foreign countries. It is destined to remain there unless the balance of trade swings in our favoran impossibility at present.

This also means the loss of $138 billion in purchases by the people who lost those jobs. When this money is not spent into the U.S. economy the loss is compounded many times by what is known as "money circulation." As an example, because fewer goods are now being produced in the U.S., the demand for cardboard boxes has dropped. As a consequence a paper mill in Point St. Joe, Florida announced an indefinite layoff of 950 workers. But there is no mention of how many lumberjacks will also be put out of work, or how many truck drivers, or parts suppliers, food service personnel, or just what a total devastation this can cause to the economy of a town of only 4000 people.


Not only are many citizens living beyond their means today through the use of the credit card, our profligate government, through the Federal Reserve, has also acquired a credit card mentality. But the one major expense that government never mentions is the trade deficit. Although it is a major annual deficit, it is not included in the budget because it would unbalance the budget much worse than it already is. The total trade deficit to date exceeds $1.5 trillion dollars!

When NAFTA and GATT were proposed, many promises were made that these agreements (they are actually treaties) would help, not hurt the American economy. President Clinton promised that Floridaís tomato and produce growers would be protected against Mexican importsthey werenít. He promised that there would never be a negative balance of trade with Mexicothere is. He promised that the World Trade Organization would never rob the U.S. of its sovereigntyit has. And he is now intent on expanding free trade in the Caribbean Basin and South America?

A country cannot survive as a service economy, but even if it could, many companies are moving their software business to countries such as Ireland and India where the labor costs are much less than here. Even office work is being shifted to overseas operations by fax and telecommunications.

We are rapidly approaching the critical point in time when it will be impossible to turn our economy around and rebuild our industrial base. Even our large industries and mills are closing, as industry after industry continues to move offshore.

Donít try to excuse Congress on the grounds that they didnít know. For years they have known the Agency for International Development (AID) and the Overseas Private Investment Corporation (OPIC), were not only advertising and encouraging industries to move overseas, but arranged trips, handled foreign contacts and helped the industries with the necessary foreign paperwork. Both government agencies, financed by your tax money, using your tax money, also provide insurance, so that if anything happens to those companies while overseas, they will be reimbursed. Both agencies are still in business and still sending jobs overseas.

It is also Congress, which passed all of the environmental anti-pollution laws. But what good are laws which prevent pollution in the United States but permit our factories to move to other countries which do not enforce any anti-pollution measures. What good are U.S. environmental measures if the world becomes dirtier? It is also Congress which authorized "fast-track" which is totally unconstitutional! When will it end? Only if and when the American people wake up and hold those people in Congress responsible for their actions. Our government does not hesitate to lie to the people when it will benefit itself. Let the citizen beware!

Hypertexted from the Original Publication by:
Citizens for Better Government, Gainesville, Fla.
Last Modified: November 6, 1997
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