Trade Secrets


"The turtles speak to me," a protester at the recent World Trade Organization meetings in Seattle informed USA Today. "I'm a voice for the critters–the four-legged ones and one-legged ones, the trees." But not, presumably, the two-legged ones, the sort who benefit from free trade.

In Seattle, the voice of the turtles was accompanied by the voice of naked self-interest. Consider Larry Alexander, a Kennewick, Washington, potato farmer who "says he's tired of clawing to compete in the midst of relentless pressure to be more productive and efficient."

Alexander complains, with a little help from USA Today's reporter, that "globalization is crushing the mom-and-pop store and the small farmer." Or, as he puts it, "They want me to compete with the world. I'm too small."

Alexander may be pathetic, but at least he's honest. Contrast his candid lament with the professed concern of U.S. labor unions for the downtrodden workers of the world. "The rules of this new global economy have been rigged against workers, and we're not going to play by them anymore," said Jay Mazur, president of the Union of Needletrades, Industrial, and Textile Employees, on the first day of the WTO meetings.

The rules Mazur was talking about are the rules of competition, which favor textile manufacturers that can draw on cheap labor in places like Malaysia and Bangladesh. Mazur, of course, wants to rig the rules against such companies and in favor of the companies that employ his constituents, who work in places like Massachusetts and North Carolina.

But instead of openly proclaiming that goal, he and other labor leaders say they want to protect foreign workers from low wages and poor working conditions. In this case, the ultimate protection is unemployment.

Another anti-trade trick is to charge foreign manufacturers with "dumping," which The New York Times recently defined as selling products here "at below market prices." Now, I have only a bachelor's degree in economics, but my understanding was that "market prices" are determined by the interaction of buyers and sellers.

If, for instance, a company starts selling steel for less than its competitors, that decision changes the market price. But the Times seems to be saying that the government knows what the market price ought to be, regardless of what the market says.

This is confusing stuff, especially when anti-dumping rules are wielded by an administration that claims to believe in free trade. Of course, everyone believes in free trade nowadays–even Kofi Annan. As long as it's managed properly.

And so we have a cumbersome, bureaucratic, secretive organization that allows as much openness as representatives of 135 nations can agree on after years of negotiating behind closed doors. No wonder so many people seem to think that free trade is a sinister plan imposed by big corporations on an unsuspecting world.

But the truth is that nothing is more natural than trade, the exchange of something you have for something you value more. Provided the other fellow feels the same way, the transaction leaves both of you better off.

The essential win-win nature of trade does not change simply because we are talking about billions of people instead of two. Contrary to the protesters in Seattle, interfering with peaceful, mutually beneficial exchange–whether at the behest of corporations, labor unions, or environmentalists–is the real imposition.

Though we heard much during the WTO meetings about the practical benefits of free trade, especially for people in developing nations, hardly a word was said about its moral underpinnings. Simply put, it is wrong, and not merely imprudent, to stop willing buyers and sellers from exchanging the products of their labor.

When farmers, garment workers, or steel manufacturers demand protection from foreign competition, they are insisting that consumers be forced to subsidize them through higher prices. They are asking the government to help them pick people's pockets.

The fact that the governments of other countries often accede to such demands does not justify our own protectionism. Nor do the benefits of free trade depend on its universal practice: Regardless of what other countries do, eliminating our own trade barriers would be a boon to American consumers, businesses as well as individuals.

Then what are we waiting for? With any luck, the failure of the WTO's latest attempt to manage trade by consensus will focus attention on that question.