Free Trade

In the past, I tended to ignore news about economics and trade agreements. But since learning more about Adam Smith, I'm beginning to understand, and it's become more interesting.

On Wednesday, December 26, 2007, The Washington Post had two items related to free trade: the first was an article describing how free trade is helping some American manufacturers by increasing their opportunities to export goods. The article includes examples of American firms that make high-quality goods. A supervisor at a plant that makes and exports precision valves states:

It wasn't that long that guys looked at globalization like it is going to cause us all to lose our jobs. Now it's probably going to save our jobs.

However, will the trend towards free trade last? Or will countries pursue political interests by restricting trade (perhaps Russia will refuse to export oil to Europe)? That is the question raised by Robert J. Samuelson in an op-ed in the Post the same day. He argues that a rising tide of nationalism has some countries moving away from global trade and economic interdependence and reverting to mercantilism (the policy that Adam Smith attacked).

Not all are convinced. In today's paper, Clyde Prestowitz, a U.S. trade negotiator in the Reagan administration, criticizes both these items and adds:

America has pursued free trade, but mercantilism has been the secret of the Japanese, Korean, Chinese, Irish and other economic miracles. There has never been an era of global free trade.