http://washtech.org/news/labor/display.php?ID_Content=5344The Asian countries have achieved economic success by "managed trade", not free trade. They protect certain industries from foreign competition in order to protect jobs, or preserve strategic capabilities, or until domestic players are mature enough to compete globally. They open themselves to free trade in those industrial sectors where they need the goods or services, but have neither the capability nor the will to produce domestically. Korea built an automobile industry by protecting its domestic car manufacturers from Japanese and American imports for decades. Japan still protects its rice farmers because rice is a staple of the Japanese diet and hence a strategic crop. In a future conflict Japan does not want to be vulnerable to an adversary's rice embargo or naval blockade.
For the United States, is managed trade a viable alternative to "free trade"? What is the biggest tangible objection to managed trade? That the government would be picking and choosing which industries or professions should be protected or not. Granted, this is a major concern. In democracies, governments are neither the most efficient nor the wisest economic decision makers. But what do we have today? The government protects and manages certain favored industries anyway, because of political lobbying or foreign policy reasons, as explained earlier. Meanwhile our nation's trade patterns are determined mainly by the corporate drive for profits.
Is it a benefit of free trade that an overwhelming percentage of US consumer goods are made in Asia? Why spend hundreds of billions on a navy that can defeat China in a shooting war, when the Chinese could wreak havoc on us by manipulating their trade or currency, or by simply not buying Treasury debt? Would the US be worse off if it passed laws that protect high-skill and high-wage computer software jobs from outsourcing, or limited the import of foreign programmers on H-1B visas?
How would managed trade ("protectionism" to its detractors) work in the US economy? Ultimately it comes down to identifying which industries or professional skill-sets are considered vital to the economy. If garment manufacturing is not vital, then impose no restrictions or duties on clothing imports. If home construction is not strategic, then issue thousands of temporary work-visas to Mexicans or Central Americans to come here and build houses. If auto or aircraft manufacturing is vital, then impose high import duties on the import of cars or airplanes. If biochemistry is a strategic technology, then impose local-content requirements on any biochemical product that the Pentagon or National Institutes of Health buys from commercial sources. This is not as "un-American" as the free trade boosters would have you believe. President Ronald Reagan, that darling of political conservatives, limited Japanese imports to 2 million vehicles annually (less than 15% of the US market) to protect the US auto industry. This forced the Japanese to build automobile plants in the US, using Japanese designs but American workers.
For decades, this country has let its political and economic discourse be constrained by the demonization of certain words and ideas. The political right-wing has effectively used labels like "big government", "liberal", "socialist", "government-run", "class warfare" and of course "protectionist" to discourage the consideration of policies that would benefit the average person at the expense of immensely powerful corporate interests. There is nothing inherently right or wrong about either free trade or protectionism. Both create winners and losers in society. By definition, protectionism protects and benefits some part of the general population. The national discussion we need is not whether to be a protectionist nation, but whom to protect and how to manage trade, so that the number of winners far exceeds the losers.
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