Track and Iraq
conventional wisdom on the defeat of Fast Track trade legislation
is dead wrong. As the press would have it, the failure of Fast Track
reflects the rise of grass-roots protectionism. The vote in Congress
to deny Clinton the authority to negotiate trade deals is a response
to constituent pressure.
If people resented foreign goods, they would stop purchasing Taiwanese
sneakers, Chinese clothing, and Latin American flowers. But labor
union campaigns to "Buy American" have been a notorious failure.
International trade is booming because people put their money where
their preferences are.
the other hand, there has been a massive public reaction against
all that Fast Track represents. It brought us Nafta an insider
deal to create a regional trade bloc that led to billions in new
spending, the rise and fall of the peso, and the Mexican bailout,
one of he great financial scandals of our epoch.
Track was designed to give Clinton the authority to negotiate ever
more Naftas. But at a time when all government power is regarded
as suspect, and rightly so, even more resistance has emerged to
giving additional power to the executive branch (host to the agencies
that brought about Waco, Ruby Ridge, and tax collection).
failure of Fast Track reflects union lobbying power, to be sure,
but also public resistance to centralized political authority. That's
why real free traders have every reason to cheer its defeat. If
there are no more side agreements, no more bailouts of pumped up
third-world economies, no more payoffs and bribes to U.S.-friendly
foreign officials, and no more ten thousand pages of regulations
imposed on business in the name of freedom, that's all to the good.
this sickening irony. While Clinton was agitating for Fast Track
power, he was engaging in a military standoff with Iraq. The ostensible
reason was that Iraq wouldn't allow Americans to be part of the
U.N. team inspecting for nuclear and other weapons. But the real
reason was more fundamental.
the Gulf War, the U.S. made a fateful decision. It decided that
it would use its military power to end all international trade with
Iraq. The result was that the Iraqi people were prevented from rebuilding
their lives after the destruction. Bombed sewage plants were never
repaired, the import of food and medicine stopped, and disease ran
rampant, with the result that hundreds of thousands of innocent
people suffered dysentery, starvation, and death.
may not like Saddam's personality or his politics. But that is no
reason to impose such unnecessary suffering on the people of Iraq.
The Gulf War was supposedly fought, in part, to prevent Iraq from
gaining an oil monopoly and choking off supplies. But the result
has been to cut off all supplies of Iraqi oil to the world, thereby
artificially propping up the price for present suppliers (who are
all for continued sanctions).
hardly surprising that cruel embargos engendered hatred. How could
this mess have been prevented? Free trade. It is a fount of peace
among nations, and always has been. But while Clinton was piously
singing sermons to free trade in order to acquire Fast Track power,
he was driving a foreign country into ruin by not allowing any trade.
If he would use his present power to rip off American consumers,
why should he be trusted with ever more trade authority?
politicization of trade policy is one of the great tragedies of
the post-war world. Nowadays, if we like some country, it is blessed
not only with trade but also with foreign aid stolen from the paychecks
of Americans; if we don't like some country, it is driven to the
ground with warlike sanctions, threats, and even bombs.
not only U.S. policy towards Iraq that is inconsistent and inhumane.
Everywhere Clinton has had trade authority, it has been used to
reward his friends and punish his enemies.
Clinton administration has whipped up hysteria against Japan because
its consumers don't like U.S. cars and do like Japanese film. It
tells developing nations at what age teenagers should be allowed
to work, the amount of forest land that can be used for logging,
and how big a welfare state they should have.
has this to do with free trade? Nothing. The old-fashioned word
that best describes this behavior is imperialism. Such tactics have
been decried by free traders from Cobden and Bright to Mises and
the long-run interests of American prosperity, and that of the rest
of the world, the failure of Fast Track is a boon. When the government
loses power of any sort, it's always an occasion to celebrate.
READING: The Nafta Reader (Auburn, Ala.:Mises Institute); Murray
N. Rothbard, "'Free Trade' in Perspective," in Making
Economic Sense (Auburn, Ala.:Mises Institute, 1995); Ludwig
von Mises, "The Disintegration of the International Division of
Labor," in Money,
Method, and the Market Process (Norwell, Mass.: Kluwer,