By Congressman Wally Herger
THERE is a battle raging in Washington, and it could prove to be the beginning of an international trade war. However, ‘one recent development may prevent this unfortunate occurrence by demonstrating that freer trade can also be fair for the United States. The U.S. and Canadian governments recently signed a treaty which would throw open each nation’s markets to all products produced by the other nation, duty free. The agreement was recently negotiated by our countries’ respective trade experts and would please out all tariffs between our two nations over the next decades, beginning in 1989.
This treaty offers an alternative to the stark “free trade versus fair trade” debate which has played such a large role in this year’s presidential campaign.
The treaty is a rare exercise in economic good sense. It’s simpler, fairer, and packed with economic benefits for both our countries. The U.S. and Canada, which share the world’s largest non-militarized border, also have the world’s largest trade relationship, exchanging $120 billion in manufactured goods annually. The Canadian market accounts for 20 percent of U.S. exports, while Canada sends Over 75 percent of its exports to the United States. Clearly, the extent of our mutual trade relationship as hindered only by the restrictions we, as nations, place on our people’s abilities to market goods in each country, restrictions based more on political stubbornness than on economics.
The Free Trade Agreement removes these restrictions and allows American and Canadian free enterprise to expand their economies, increase business activity, and create thousands of jobs in each country. In fact, one economic estimate by Citizens for a Sound Economy projects the United States could gain between 500,000 and 700,000 jobs under the pact. This kind of economic growth will ensure opportunity for our children and invigorate our manufacturing base.
Perhaps most important to Northern California is the FTA’s effects on agriculture. The agreement eliminates most tariffs placed on American farm products sold in Canada and eliminates licenses required by Canada for sales in that country of U.S. grain, among other products. Canadian purchases of California peaches, almonds, walnuts, citrus, and beef, just to name a few, will likely increase under FTA. This is good news for farmers in California and across America, and we in the Congress should be jumping at such an excellent opportunity to increase farm products.
Finally, the agreement would set an example to other nations that open trade works, thus increasing pressure on those nations that continue to restrict trade by limiting imports. In fact, other nations would find it harder to compete in the U.S. and Canadian markets, where their products would continue to face high tariffs, and thus, higher retail prices. The Free Trade Agreement would increase the competitiveness of U.S. products, not decrease it.
The agreement is fair, and enhances the competitiveness of American industry, providing thousands of jobs merely by establishing a level playing field in the USS and Canadian markets. It is the kind of sensible answer to our nation’s trade problems Americans have been waiting for.
Article extracted from this publication >> March 25, 1988