The United States Chamber of Commerce is supposed to represent the best interests of American corporations and act as their legislative lobby. Unfortunately many of its efforts are counterproductive and effectively work to undermine the overall competitiveness and stability of U.S. companies. In the past week the Chamber of Commerce has petitioned Congress to drop “buy American” clauses from the newly approved Obama stimulus package – which is already wrought with wasteful spending. It has also increased its efforts to stimulate the development of new broader “free trade” agreements (FTAs) with nations around the world.
The reason the Chamber of Commerce is against so-called “buy American” clauses is due to its belief that such measures would increase the cost of projects while simultaneously creating a “trade war” with those nations who were left out of the bidding. The concept it fails to grasp is that there already is a trade war and the United States is being severely beaten.
The Chamber of Commerce's reasoning for even more FTAs is the misguided belief that the agreements actually result in surpluses for the United States. They highlight the fact that the U.S. is running surpluses with 9 of the 10 nations it entered into FTAs with since 2004. Unfortunately this statistic is misleading. The nations with whom we have established FTAs in the last four years are marginal developing economies; the nations which we run deficits with are massive and well developed economies. For example, the United States has a $10 billion surplus with Australia (one of the 9 successes) – and our largest surplus was $14.5 billion with the Netherlands in 2007. No export surplus exceeds $15 billion annually.
Meanwhile, the U.S. runs simultaneous import deficits with dozens of other countries and our 20th largest deficit (Thailand) roughly cancels out our largest surplus – our deficit to Thailand is $14.3 billion. We were in deficit $256 billion to China alone in 2007. If you add up our five largest surpluses you get roughly $58 billion gained. If you add up our five largest deficits you get roughly $522 billion lost. That is a net loss of $470 billion from just five countries. (Trade Stats Express)
The Chamber of Commerce also points out that nearly half of our trade is with countries that have FTAs with the United States. This statistic is meant to imply that we could make international exchange cheaper with the other half if we enter into FTAs with them. However, this overlooks the fact that our international trade is a net loss for the U.S. Why would we want to make a bad situation worse by giving nations even more reason to send their shoddy products here in exchange for our money?
The Chamber of Commerce has a strong voice in Washington and if history is any proof it will likely carry the day. “Free trade” will probably be the linchpin of American economic policy as long as the same old talking heads preside over the halls of Congress. The Chamber of Commerce is funded by business elites and these elites benefit from international economic liberalization. They have an agenda which serves them and they have the right to that self serving idealism. The United States government on the other hand should have only one agenda in mind – our best interests. It is being sold snake oil by the business interests of this country as well as those from overseas.
If we have no means of cutting off or drowning out this bad information we have to put people in office who know their way around the flashy sales pitches. They need to realize that the Chamber of Commerce represents just what its name implies – Commerce. Commerce has increased in the “free trade” era, but living standards have fallen and that is all that matters to the rest of us.
Front Page Photo by: Cleveland – Google Images
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Only a positive balance of trade will restore the value of the dollar, and we must accomplish this by any means possible, or accept third world poverty on a large scale basis. Riots and insurrection are predictable, ala the French Revolution, when the people find their situations economically hopeless.