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Free Trade: Boon Or Bane?

Posted on the 20 October 2011 by ---

Free Trade: Boon or Bane?

An Interesting Cartoon Critical of Free Trade

 While Obama's large and ambitious jobs bill has not been able to secure the necessary votes for passage in either the House or the Senate, the President is touting other, bipartisan economic measures that have succeeded as of late.  These include patent reform and three new free trade agreements with Panama, Columbia, and South Korea.  The patent reform bill is actually unlikely to create many jobs at all.  It's toothless, and doesn't address the issue of 'patent trolls' that hamper high-tech innovation.  Instead, it streamlines the process of obtaining patents.  Keep in mind that there are currently hundreds of overlapping and frivolous patents in the US registry, including patents on toast and the wheel.  The changes do nothing to address this.  But the so-called sweeping reform isn't the real elephant in the room.
In contrast, the free trade agreements are likely to have a significant impact on our economy.  The White House and independent economists alike agree that removing all tariffs and restrictions on trade between the US and these three nations will soon create tens of thousands of new American jobs in a variety of business sectors.  Sounds great, right?  A real win-win scenario!  Actually, the agreements aren't as sound as they appear.  As NAFTA has already shown, free trade makes it easier for corporations to move jobs overseas in search of cheaper labor, because they can continue to sell their goods to US consumers without a price increase.  And while our exports may soar under free trade, our imports are likely to rise even more, further exacerbating the troublingly large trade deficit.  So, while free trade agreements create tens of thousands of jobs, they are also likely to cost Americans tens of thousands of jobs in other industries.  For more info, watch the video below from Al Jazeera English.

To conclude: isolationism certainly isn't a good idea, but neither is throwing open the floodgates of globalization.  The US should stop focusing on free trade agreements until we have a better idea of what their long-term effects really are.  Instead, it's time to focus on meaningful job creation proposals like Obama's bill, which should have been a bipartisan success.  It's failure is another reminder of just how polarized our politics have become.  I'm holding out hope that some of the provisions will pass once the bill is broken up into many smaller portions.  We can't afford a continued unemployment crisis - that's something we can all agree on.

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