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.
Free traders are notoriously poor at public relations. A second way to promote their cause is publicizing the American companies that are growing because of exports. Many workers don’t realize the products they make, package, load, ship and market are sold to foreigners.
One example: a company called Dunlee-Philips in Aurora, Ill., which makes high-tech X-ray tubes for medical scanners. Company president Pat Fitzgerald told the Chicago Sun-Times that 40 percent of his business is now overseas: “I think if you’re only looking at your market as being the U.S. market, you’re missing something.”
Neil Hartigan, head of Chicago’s World Trade Center, pointed out that as firms like Dunlee-Philips expand, they open opportunities for other businesses. “We’re trying to develop the service side of it,” he said. “These people need accountants, they need lawyers, they need suppliers.”
In fighting the anti-trade backlash, the new Congress has a role as well. Rep. Charles Rangel, the incoming chairman of the House Ways and Means Committee, says that “trade is one issue” that’s ripe for bipartisan cooperation. He can start by brokering a new farm bill reducing lavish federal subsidies to agriculture, which have helped stymie global trade talks. Then he can kill the insane embargo against Cuba, a country hungry for American products.
But the biggest problem facing free traders is the stagnation of American wages. That provides fertile ground for the charge that globalization is depressing domestic income. The answer is not shielding American companies from competition, which won’t work anyway. It’s making American companies (and workers) more competitive than ever. That means subsidies for retraining and research; it means lowering the barriers for foreign students and entrepreneurs who want to create and invest here.
No matter how competitive Americans become, however, globalization will always cause some folks to lose out, like those workers who used to make garments under the union label. They can’t simply be discarded. They need help in coping with hardship – lower drug costs, better health coverage, extended unemployment benefits.
Free trade is in America’s national interest. That’s why you should look for the foreign label this holiday season.
Steve Roberts’ latest book is “My Fathers’ Houses: Memoir of a Family” (William Morrow, 2005). Steve and Cokie Roberts can be contacted by e-mail at email@example.com.
Copyright 2006, Newspaper Enterprise Assn.