With the Democrats blocking a vote on the administration’s proposed free trade treaty with Colombia, a treaty which is desirable on economic and security grounds, one has to ask why they oppose the treaty. What do they have to gain? Is it simply an election ploy, pandering to an electorate that knows they have been hurt by the trade deficits? Are they really concerned about a possible loss of American jobs which is a legitimate concern. But, as we shall see, Colombia is no threat compared to China and other Asian countries. Is it the desire of the anti-capitalist left that now dominates the Democratic party to punish a developing country whose successful development strategy is free market capitalism? Has the leftist hate of America spread from opposition to war against Islamo-fascists to a desire to hand South America over to that admirer of Cuban Communism, Pres. Hugo Chavez of Venezuela?
Let us take a look at the job issue. Neither the Democratic majority in the House and Senate nor their leading candidates for President have raised serious objections to the loss of millions of manufacturing jobs to China, Japan, and other countries. As we point out in our book, Trading Away Our Future, those deficits are the source of the U.S.’s major economic problems: the falling dollar, wage stagnation, market bubbles they created, and recession.
Our trade deficit with Columbia in 2006 was $2.6 billion, with the rest of the world $760 billion, 290 times greater than the deficit with Colombia. Majority leader Pelosi denies that the Democrats were seeking to block the trade agreement. What the Democrats want, she says, is a timetable that was sensitive to the concerns of American workers. Where was their concern for the American worker when millions were losing their jobs as a result of the trade deficits during the past two decades. In his recent book, Lee Iaccoca asks, “Where are our leaders?” All of those seeking the presidency, Sen. Obama and Sen. Clinton express reservations about the treaty. Sen. McCain is a free trade advocate. What are they proposing to do about the trade deficits which amounted to 6.3 percent of our GDP in 2007?
Let’s look at the facts. In 2006, we imported $9.3 billion worth of goods from Colombia and exported $6.7 billion worth of goods for a trade deficit of $2.6 billion. Our trade deficit with China was $232.5 billion, a HUNDRED times greater. American workers in manufacturing in 2006 produced on the average $111 thousand worth of goods (value-added per worker). To balance trade with China by increasing U.S. exports to China would require the hiring of 2.2 million American manufacturing workers; to balance trade with the rest of the world require the export of American goods that would create the demand for 7.5 million manufacturing workers. To balance trade with Colombia by increasing our exports to Colombia would require the hiring of 0.23 million American workers. If the goal is to balance trade, Colombia is a small piece of the problem.