How should we rethink our trade agreement strategy?

September 30, 2014

The following was written by Bob Johns, CPA Policy Committee member:


Balanced Trade – Keep It Simple


Trade is complicated.  Trade barriers are complex and sophisticated.  Trade agreements are filled with legalese to a fault.  Circumvention is many things – devious, hard to trace, complicated in many ways, subject to corruption.  But in the end, fair trade comes down to the competence of those making and enforcing our agreements.  One thing is pretty clear.  Our trade balance is contributing to our bankruptcy by eliminating middle class jobs (taxpayers) and creating a huge cash outflow (as in foreign debt).  We can keep score and the score suggests an outflow of about $.5 trillion annually.  The situation is so bad that those advocating “free” trade and making the deals want to change how we keep score and how we define “domestic” products.

 Imagine for the moment you own Trade, Inc.  Your team is incurring a loss for your company that amounts to $.5 trillion annually.  You know your company won’t be long for this world so you start to ask a bunch of questions.


  • What kind of deals do we have that are producing losses that will kill us?  How can we structure win/win deals instead of the lose cycle we’re in?
  • Who is making those deals?
    • Do they have a conflict of interest in the deals they make?
    • Are there side deals involved to the extent we have to have “loss leaders” to attract customers (friends)?
    • Are my people on someone else’s payroll or in the process jumping ship?  Basically, who do they really work for?  They really can’t be so ignorant as to see the damage they’re doing, can they?
  • How can I terminate the deals that are driving my outfit to bankruptcy?
  • Do I have a plan to get back on the positive side of the ledger before I go belly up?
  • Etc.


You get the drift of this.  The current path is unsustainable without serious consequences.  Let’s apply the same terse questions to our trade practices.


  • Why do we insist on using similar approaches to trade deals that have accumulated over $7 trillion in foreign debt?
  • Are people who support, guide and make such deals acting in the best interests of the country or themselves?  I think we can rule out idiocy here.  There is a purpose and it isn’t in the interests of working Americans to trade their jobs away.  There are serious questions as to motive for such “idiocy” to continue year after year.  No one can justify the perpetual losses.  Someone gains somewhere.
  • Trade deals are sometimes a tool to win friends and influence people.  Can you name one global “friend” we’ve been able to “buy” through a trade deal that is a real friend?  If you can name one, where is the evidence they are friends and what exactly was reciprocated for the financial gain they received?
  • Our trade deals compromise US sovereignty and US law.  Can you think of three positives for American workers that have come out of relinquishing sovereignty and security to foreign interests?
  • Why are the job losses (which includes loss of tax revenue, increased transfer payments and a very low adult labor participation rate) an expected part of trade deals?  Programs like TAA are based on deals being losers.  The massive amounts spent on “retraining” have a very ill defined ROI, among other things.


Next time someone touts free trade and increased exports as the way forward, remind them of what it has yielded thus far.  In the words of a TV/Radio personality, put the person in the “No Spin Zone.”  Increased exports in the face of the trade barriers, border taxes and currency games being played in the real world?  HA!  The proof of the trade folly is everywhere and cannot be explained away.



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