WASHINGTON, DC – There once was a country so high-tech, so rich and so powerful that it didn’t need international trade. It had everything it wanted at home, so it closed its borders. That nation was 12th Century China.
At the time, China had already invented gunpowder, rockets, clocks, and the world’s most successful farming system (irrigated rice). It had the world’s largest empire and the world’s largest population. China didn’t trust the Europeans, like Marco Polo, who were beginning to turn up at the imperial palace.
So China shut its borders—and went into a 600-year decline. China’s affluence turned into massive poverty and hunger, which has only been reversed after a 1980s re-opening to international trade and investment.
I’m reminded of this history by the December 7th razor-thin House vote for freer trade. The House gave President Bush the Trade Promotion Authority to negotiate at the new world trade round (agreed upon by 170 countries last month in Doha, Qatar). But five Republicans had to have their arms twisted to get the victory at all.
The Democratic Party, once ardently for freer trade, remains opposed to it now. The Congress denied trade authority to President Clinton, and wouldn’t have given it to Bush if it weren’t for his high wartime poll ratings. There’s still serious question whether the Senate will approve TPA as Majority Leader Tom Daschle refuses to schedule a vote.
How quickly we forget what made America great and successful. Americans aren’t successful because we’re smarter or harder working. We’re successful because we try more things. We compete more.
The interstate commerce clause of our Constitution made America the world’s largest free-trade area. In the 19th century, we launched sailing ships full of Yankee Traders to supply the world with cotton, wheat, and patented Yankee gadgets.
In the 1860s, greedy financiers scammed the American public on the construction of the first transcontinental railroads—doubting that the trains themselves would produce any profit. Instead, the operating profits dwarfed the construction contracts. The railroads created true economic growth: opening new lands, enabling more people to get new products, and creating the tourist industry. So does trade.
In 1993, we signed the North American Free Trade Agreement, despite a clamor from labor unions that it would export a million American jobs. Instead, NAFTA launched a whole new level of U.S. prosperity, directly creating 600,000 new U.S. jobs, most paying wages above the American average. Corn exports to Canada more than doubled—while corn exports to arid Mexico increased 18-fold. Our unemployment fell to historic lows.
I’m especially disappointed that farmers haven’t learned from their recent NAFTA export success. The world hasn’t liberalized farm trade as it has manufacturing—but under NAFTA, water-scarce Mexico is importing millions of tons more food grain, feed grain, fruit, meat, and dairy products to supply 100 million people who have rising incomes.
American farmers also complain about NAFTA import pressure from Canada’s farms. But Canada and the U.S. both have more farmland than consumers. Now Canada is offering to partner with the U.S. at the WTO negotiation, so both countries can export more food to Asia.
Speaking again of China, the purchasing power of its average family soared from $150 per year in 1978 to about $12,000 per year today. Still some U.S. farmers (and their Congressmen) pretend that China is too poor to buy America’s potential farm exports in order to preserve the excuse for Federal farm subsidies.
The new WTO round is pledged to eliminate both the European farm export subsidies that have terrorized farmers in the United States, and in the rest of the world, for 50 years; and, to lower the high tariffs and trade barriers currently forcing consumers in India and China to pay two or three times the world market price for their food.
What of the environmental concerns about free farm trade? Today China has 7 percent of the earth’s arable land, and 26 percent of its population. China has recently cleared the trees from 15 million acres of “farmland†on steep hillsides in the Yangtze Valley, producing that river’s worst-ever floods and soil erosion. The forest habitat of the giant panda is shrinking as low-yield farms climb up the slopes from China’s densely populated valleys. Farm trade would help save China’s tigers and pandas; closed borders might be the final environmental “stake through the heart†of diminishing wildlife populations.
Ironically, China has become a member of the World Trade Organization just in time to help persuade America that its 200-year commitment to freer trade is worth keeping. China’s historic decline after it renounced trade, its huge market potential, the opportunity to import Chinese goods at attractive prices and the plight of China’s pandas are all powerful arguments for Senate passage of Trade Promotion Authority.
This article was published by Knight Ridder Tribune
Dennis T. Avery is based in Churchville, Va., and is director of global food issues for the Hudson Institute of Indianapolis.
