"Free Trade" as Interventionism

No one who knows Washington will be surprised to discover that free trade has little to do with the Mexican free-trade agreement. As usual when D.C. is calling (and aiming) the shots, arcane regulations will redistribute billions of dollars to well-connected corporations, and even more power to the managerial state. This is not the free market.

The benefits of free trade are obvious. "In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest," wrote Adam Smith. "The proposition is so very manifest, that it seems ridiculous to take any pains to prove it." Exactly. Free trade increases the common good and reduces the role of government. It enlarges the division of labor, and thus the general prosperity. It benefits all nations who engage in it, no matter how backward or advanced, and fosters amity among them. But this is not what Washington has in mind.

In a chilling reprise of the trade blocs that helped bring on World War 11, President Bush is creating a North American zone of Mexico, Canada, and the U.S.

Combined with U.S. control of oil in North America, the Caribbean, and Venezuela, and now the Middle East thanks to the Iraqi War, Bush believes he can reverse the U.S. economic decline caused by big government, wage trade war on the European Community and Japan, and generally make sure – as he likes to put it – that "what we say goes."

Bush's related "Enterprise for the Americas Initiative" seeks to bribe all of Latin America into the zone, with below-market loans from the World Bank, the International Monetary Fund, the Export-Import Bank, the Commodity Credit Corporation, and a new U.S. investment fund – all at our taxpayers' expense. Fifteen Latin countries have signed up, and 13 Caribbean countries have agreed to a related scheme.

Some Mexicans fear U.S. political control of their country. U.S. trade representative Carla Hills is, for example, demanding a host of changes in Mexican law. "U.S. agencies, including the Environmental Protection Agency and the Departments of Justice, State, and Labor" are pressuring Mexico on the "environment, human rights, worker standards," and other issues, says Hills. She is even insisting that Mexico harden its patent laws to the benefit of big U.S. firms. Such laws, even in our own country, are a special privilege rather than a legitimate protection of property rights; they should be weakened, not toughened.

Why should our regulations, written at the behest of Keynesians, labor unions, and environmentalists, be foisted on that poor country? It trespasses on Mexican national sovereignty, and violates our own Constitution, which contains no warrant for such intervention.

To listen to the Bush administration, all this is necessary because we're poor, free-trading bumpkins victimized by foreign city-slickers; in fact, the U.S. is as protectionist as any industrialized country, in some ways more than even Mexico.

Rather than telling Mexico, and almost every other country on earth, how to run its affairs, why not put our own house in order?

We should get off the "fast track" and stop the Mexican negotiations, abrogate all other managed-trade treaties – which are unconstitutional – and allow our companies to make their own free-trade agreements, at their own expense. Would it work? I believe they would be welcomed with abrazos, since their only motive is to make a profit. When has D.C. ever been that clean?

We should also scrap investment barriers, export subsidies, and duties, tariffs, and quotas. Some companies might suffer, but justice would be served, entrepreneurs would be freed, the American people would be enriched, and so would every country that did business with our firms.

U.S.-managed trade and managed-trade restrictions benefit special interests; that's why they're enacted. Not only do they harm consumers, they damage American businesses – the would-be competitors of the privileged firms.

A non-managed trade policy would set an example for the world, benefit us and all who did business with us, and shrink our government. Who could ask for anything more?