A TV commercial 20 years ago, urging shoppers to buy American-made clothing, contained the memorable refrain: “Look for the union label.” That era is long over. Buying only domestic garments would leave your kids shivering this winter.
But here’s a heretical suggestion for the holiday season: as you purchase sweaters and games and bikes to put under the tree, look for the foreign label. Notice how many of your gifts are made abroad, and take a moment to realize you are benefiting from globalization and free trade.
Free trade is hardly a popular idea today. Just before President Bush flew to Asia, Congress slapped him in the face by shelving a market-opening pact with Vietnam. The deal will probably be approved next year, but the vote signaled a major shift in public sentiment.
As former Treasury Secretary Robert Rubin, a strong advocate of open markets, told bankers meeting in Hong Kong: “There’s a tremendous backlash against trade liberalization. It’s one of the biggest challenges facing the global economy.”
This backlash is not only dangerous, but wrong-headed. Every economic study confirms that free trade is a powerful engine for growth and prosperity, by far the best anti-poverty program anywhere. All those workers in China and Chile crafting toys for Santa can now afford American-made movies and computers. But there’s a problem.
Even though free trade creates far more winners than losers, the losers tend to be louder and more visible. It’s easy to put a picture on TV of a shuttered factory or an unemployed worker. It’s much harder to show a family who earns more from expanding exports, or pays less because of inexpensive imports.
As a result, political demagogues, most of them Democrats, have exploited the anxieties that are inevitable in a rapidly changing economy. One example: Jon Tester ran for the Senate in Montana charging that trade deals were putting “our jobs and the viability of family farms and ranches across Montana in jeopardy.”
That’s nonsense, but Tester won, and so did several dozen other Democrats who fashion themselves as “populists” on trade but would better be described as fear-mongers. That’s where the “foreign label” idea comes in.
Many American families who profit from trade don’t know it. They don’t realize the benefit to their budget when they fill out their Christmas lists with foreign-made gifts at Wal-Mart or Target.
