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Equity of Trade Versus Free Trade

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Live Link:  National Organization for Raw Materials

by Thayne Cozart
Director of Communications, National Organization for Raw Materials

The U.S. has a huge trade imbalance with most trading nations. The imbalance is not in agriculture, although many food products — both raw and processed — enter the U.S. at prices below those for comparable U.S.-grown foodstuffs.

To a large degree the imbalance is in manufactured goods. One reason is that many nations have lower costs of production — based upon a lower standard of living, cheap labor, inexpensive raw materials, protective government policy, etc. Multinationals who have moved their plants to foreign locations enjoy the best of both worlds — inexpensive manufacturing costs and unlimited access to the world’s biggest consumer market, the USA.

Our laissez-faire trade stance, when coupled with many nations’ protective trade stances and the inherent disparity of living standards around the world, is proving to be a recipe for ever-increasing trade deficits. Exacerbating the situation, GATT and NAFTA are proving difficult to implement when other nations improvise phony trade issues and drag their feet at every opportunity. Bottomline, the U.S. is having problems with free trade. More

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