President Obama is currently in the midst of a five-day trip to Latin America, during which he will be visiting Brazil, Chile, and El Salvador. While any such trip has multiple purposes, the main objective of Obama’s visit is to promote American exports to the increasingly lucrative Latin American market. This is part of Obama’s stated goal, announced last year, to double American exports by 2014. It is an ambitious goal, but certainly one worth pursuing.
As Obama himself pointed out in a recent editorial in USA Today, every $1 billion worth of American exports supports roughly 5,000 American jobs. Increasing employment should obviously be one of the primary goals for any society, and anything which can help fight the stubbornly high unemployment rate in America should be welcomed. The more American goods that are purchased in foreign markets, the higher American employment goes up, and the better off American society will be.
This is obviously good in and of itself, but it is also good for America’s fiscal situation. A higher employment rates means that there are more people paying taxes and fewer people depending on government assistance. Consequently, government revenues go up and government expenditures go down, a classic win-win scenario. When it comes to addressing the fiscal crisis in the United States, anything that increases American exports to overseas markets is a good thing.
In the sense that “free trade” is defined as an elimination of trade barriers like tariffs and quotas, free trade is a good thing. Congress routinely comes under enormous pressures from geographic special interests (a district including a car factory, for instance) to enact protectionist trade policies, especially in times of economic stress. But protectionism is always damaging to the overall economy in the long-term. Congress would do well to maintain the long American commitment to free trade.
In the past few years, the government has negotiated bilateral free trade agreements with Columbia, Panama, and South Korea, which will eliminate the vast majority of tariffs between these nations and the United States. These trade agreements currently await ratification by Congress, but are being held up by rather petty partisan bickering. Approval of these trade deals would be a step forward in the campaign to get the economy rolling again, increase American employment and get the deficit under control, so Congress needs to get its act together and approve them as soon as possible.