The real free trade fear

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"Forewarned is to be forearmed." --Benjamin Franklin


We've spent a good part of the year in the trucking industry arguing about the impact of trade with Mexico, specifically the fallout from letting Mexican truckers cross into the U.S. and operate on U.S. roads. But there's a much larger probelm afoot than what's going on with Mexico, and while this does NOT mean we should cease debate on Mexican-related issues, we need to start looking at the bigger free trade picture -- and what that means not only for the U.S. but the world as a whole.


A recent newspaper column by Irwin Stelzer, a senior fellow and director of The Hudson Institute's Center for Economic Policy, really crystalized the issue for me. To his mind, trading and immigration issues with Mexico, the housing market meltdown in the U.S., tighter credit, etc., don't come close to the equaling a much more serious long-term issue -- the shift of wealth occuring right now via trade to the nations in Asia and the Middle East, specifically those that are ruled by what amounts to dictatorial oligarchies.


Saudia Arabia, Iran, and Russia in particular are stockpiling wealth by the billions as oil prices inch ever closer to $100 a barrel, while China continues to benefit from its low cost manufacturing enterprises -- kept low cost by the still-in-power Communist party. Much of this is helped along with funds from our trade imbalance with these nations, as the U.S. trade deficit topped $763.6 billion last year. We haven't had a trade surplus since 1991 by the way -- and it doesn't look like we'll see one again anytime soon.


Now, free trade ostensibly helps countries open their borders to the rest of the world and -- hopefully -- acts as the springboard to freer, more democratic societies. To this day, however, China, Saudia Arabia, and Iran have all managed not only to stifle the societal benefits free trade is supposed to bring, they are managing to reap ever larger amounts of cash from the world markets at the same time -- about $10 TRILLION worth, according to the International Monetary Fund. In the words of Ken Rogoff, former chief economits for the IMF, with that kind of money, those nations aren't part of the world's financial system ... they ARE the world's financial system.


China, let it be known, is not only the second largest trading partner now with us -- supplanting Mexico -- they are the NUMBER ONE trading parter with Iran: the same Iran that is trying to get a nuclear energy program off the ground. Iran is a country controlled by a cabal of mullahs -- religious leaders that control not only the political and judicial sinews of that country, but the military as well. Mahmoud Ahmadinejad, Iran's president, is only a figurehead -- the real power in his country never goes up for a popular vote, even a rigged one.


Saudi Arabia, ostensibly a U.S. ally, is another danger -- it's ruling royal family brokered a deal several decades ago with the radical Wahhabi Islamic sect, handing over control of the nation's religious schools to quell domestic opposition -- in effect buying them off. Oh, but at what a price. It's no wonder that the bulk of the 9-11 terrorists were Saudis when you think about it: they'd been indoctrinated from a young age in jihadist philosophy, if such rank beliefs can even be remotely dignified by the word 'philosophy.'


Russia, another supposed ally, is rapidly slipping back into the ways of its Soviet past -- in fact, Russia's president Vladimir Putin is a former KGB officer -- the KGB being the former Soviet Union's spy agency and secret police all rolled up in one. He's been trying to forge ever-closer ties with Iran, too -- and both his country and that of the Shiite mullahs controlling Iran are banking billions from the run-up in oil prices.


And then back to China: A nation with about two billion people, with probably the largest military force on Earth. They are beholden to no clean air treaties, no worker safety regulations, nothing. In fact, when the storm broke over defective vehicle tires, tainted seafood, and lead-coated toys, the Chinese executed -- you heard me right, EXECUTED -- the head of their equivalent to the food and drug administration as a way to say, 'See? We are battling these problems.' Talk about the cure being almost as scary as the disease!


So, what do we do? Scrap free trade? Embark on a protectionist economic strategy? I don't think so, because that would trigger more trouble -- and besides, we NEED export markets to help our own economy thrive. But I do think that it should be proof positive that we should begin rethinking just who we do business with and how we do it.

What's Trucks at Work?

Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry.

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