Dr. Kratuhammer on free trade
Party Without Ideas
It’s a no-brainer. If we have learned anything from the past 25 years in China, India, Chile and other centers of amazing economic growth, it is that open markets and free trade are the keys to pulling millions, indeed hundreds of millions, of people out of poverty. The Central American Free Trade Agreement (CAFTA) is a chance to do the same for desperately poor near-neighbors.
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You would think, therefore, that Democrats would be for CAFTA. Not so. CAFTA is in great jeopardy because Democrats have turned against it. Whereas a decade ago under President Bill Clinton, 102 House Democrats supported the North American Free Trade Agreement, that number for CAFTA is down to 10 or less. In a closed-door meeting this month, reports Jonathan Weisman of The Post, House Minority Leader Nancy Pelosi put heavy-handed pressure on all congressional Democrats to observe party discipline in killing the treaty.
Arguing free trade is particularly tiresome because it is the only proposition in politics that is mathematically provable. It was proved by British economist David Ricardo in 1817 that even if one country is more efficient in producing two items, trade between two countries based on the relative efficiency of production is always beneficial to both countries.
Mathematics does not change, but calculations of political expediency do.
As Dr. K points out, “Eighty percent of goods from these countries are already entering the United States duty-free, so CAFTA would have a minimal impact on the United States. It would, however, have a dramatic impact on these six neighbor countries — countries that Democrats used to care about. Or so they said.”
Not to worry the Democrats, Hugo’s working on his Bolivarian Alternative to any USA-initiated free trade agreements.
Hand out the t-shirt.