CAFTA: More Bureaucracy, Less Free Trade

by Rep. Ron Paul, MD
by Rep. Ron Paul, MD

The Central America Free Trade Agreement, known as CAFTA, will be the source of intense political debate in Washington this summer. The House of Representatives will vote on CAFTA ratification in June, while the Senate likely will vote in July.

I oppose CAFTA for a very simple reason: it is unconstitutional. The Constitution clearly grants Congress alone the authority to regulate international trade. The plain text of Article I, Section 8, Clause 3 is incontrovertible. Neither Congress nor the President can give this authority away by treaty, any more than they can repeal the First Amendment by treaty. This fundamental point, based on the plain meaning of the Constitution, cannot be overstated. Every member of Congress who votes for CAFTA is voting to abdicate power to an international body in direct violation of the Constitution.

We don’t need government agreements to have free trade. We merely need to lower or eliminate taxes on the American people, without regard to what other nations do. Remember, tariffs are simply taxes on consumers. Americans have always bought goods from abroad; the only question is how much our government taxes us for doing so. As economist Henry Hazlitt explained, tariffs simply protect politically-favored special interests at the expense of consumers, while lowering wages across the economy as a whole. Hazlitt, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, and countless other economists have demolished every fallacy concerning tariffs, proving conclusively that unilateral elimination of tariffs benefits the American people. We don’t need CAFTA or any other international agreement to reap the economic benefits promised by CAFTA supporters, we only need to change our own harmful economic and tax policies. Let the rest of the world hurt their citizens with tariffs; if we simply reduce tariffs and taxes at home, we will attract capital and see our economy flourish.

It is absurd to believe that CAFTA and other trade agreements do not diminish American sovereignty. When we grant quasi-governmental international bodies the power to make decisions about American trade rules, we lose sovereignty plain and simple. I can assure you firsthand that Congress has changed American tax laws for the sole reason that the World Trade Organization decided our rules unfairly impacted the European Union. Hundreds of tax bills languish in the House Ways and Means committee, while the one bill drafted strictly to satisfy the WTO was brought to the floor and passed with great urgency last year.

The tax bill in question is just the tip of the iceberg. The quasi-judicial regime created under CAFTA will have the same power to coerce our cowardly legislature into changing American laws in the future. Labor and environmental rules are inherently associated with trade laws, and we can be sure that CAFTA will provide yet another avenue for globalists to impose the Kyoto Accord and similar agreements on the American people. CAFTA also imposes the International Labor Organization’s manifesto, which could have been written by Karl Marx, on American business. I encourage every conservative and libertarian who supports CAFTA to read the ILO declaration and consider whether they still believe the treaty will make America more free.

CAFTA means more government! Like the UN, NAFTA, and the WTO, it represents another stone in the foundation of a global government system. Most Americans already understand they are governed by largely unaccountable forces in Washington, yet now they face having their domestic laws influenced by bureaucrats in Brussels, Zurich, or Mexico City.

CAFTA and other international trade agreements do not represent free trade. Free trade occurs in the absence of government interference in the flow of goods, while CAFTA represents more government in the form of an international body. It is incompatible with our Constitution and national sovereignty, and we don’t need it to benefit from international trade.

June 7, 2005

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