When American patriots dumped crates of imported tea into Boston harbor rather than pay duties to the English Crown, they started a rebellion against taxes and protectionist trade measures that not only led directly to American independence, but also provided inspiration, then and now, for freedom-loving people around the world. While “cutting off our Trade” was high on the list of abuses cited against King George III in the Declaration of Independence, it was the genius of the U.S. Constitution, with its encouragement of free trade among the states, that truly laid the foundations for our economic success, in effect creating the world’s first continental free trade area.
Debates over trade restrictions have erupted from time to time during our history and have not always been resolved in favor of greater freedom, but the historical record is clear: When we have opted for freer trade, we have been rewarded with long periods of greater prosperity. As President Ronald Reagan observed:
The benefits of free trade are well known: It generates more jobs, a more productive use of a nation’s resources, more rapid innovation, and higher standards of living both for this nation and its trading partners. While a unilateral commitment to free trade benefits the Nation, Americans gain even more when U.S. trading partners also open their markets.
Many critics of U.S. trade agreements and of free trade in general assert that free trade destroys jobs and lowers wages, but the facts show otherwise: Countries that have the lowest trade barriers also have the strongest economies, the lowest poverty rates, and the highest average levels of per capita income.
The biggest threat to U.S. prosperity comes not from free trade, but from the decline in economic freedom in the United States. In 2010, for the first time ever, the United States fell from the ranks of the economically free in the Index of Economic Freedom, published annually by The Heritage Foundation and The Wall Street Journal. This reduction in freedom has been accompanied by a stagnant economy, persistently high unemployment, and lethargic economic growth.
Trade is the framework upon which American prosperity rests. What is needed is a return to the free trade policies that have created economic dynamism, which engenders continual innovation and leads to better products, new markets, and greater investment.
To talk to one of our experts, please contact us by phone at 202-608-1515 or by email.