Hornberger's Blog

Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
Here's the RSS feed or subscribe to our FFF Email Update to receive Hornberger’s Blog daily.

Unilateral Free Trade vs. “Free-Trade Agreements”


Let’s all shed a tear for Michael Froman. He’s the new U.S. trade representative. He’s the person who is responsible for negotiating “free-trade agreements” with other countries.

So, why should we feel sorry for Froman? According to the New York Times, the sequestration has caused his budget to shrink 7 percent, down to $47 million. That’s making it more difficult for him to fly to foreign countries to negotiate “free-trade agreements.”

Boo hoo hoo. Let’s all have a pity party for Froman.

Why do I place “free trade agreements” in quotation marks? Because the very concept of a negotiated “free trade agreement” is ridiculous. If the government is negotiating such an agreement, it’s a “trade agreement,” not a “free-trade agreement.”

After all, what does the word “free” in the term “free trade” mean?  It means trade that is free of governmental interference, regulation, or control. Thus, it goes without saying that if the government is negotiating a trade agreement, it is controlling the trading decisions of its citizens. That’s not free trade, that’s controlled trade.

If the U.S. government really believed in free trade, it would forget about negotiating “free-trade agreements” with foreign regimes and instead simply lift all of its restrictions, regulations, and controls on the ability of Americans to trade with others around the world.

That’s what’s called unilateral free trade. It’s based on the concept of unilaterally lifting all barriers to trade without seeking reciprocal action on the part of foreign governments.

Why should the U.S. government adopt unilateral free trade and abandon negotiated trade agreements? There are two reasons, one moral and the other utilitarian:

1. People have the fundamental, God-given right to trade with whomever they want. They have the right to sell their goods and services to anyone they want. They have the right to use their money to buy anything they want from anyone anywhere in the world. That is what Thomas Jefferson meant when he referred to natural, God-given, unalienable rights in the Declaration of Independence, rights that cannot legitimately be taken away by government.

2. It would increase economic prosperity and raise people’s standard of living. Whenever people enter into a trade, they give up something they value less for something they value more. Thus, in every trade both sides benefit, from their own individual perspective. That means that to the extent to which government interferes with people’s ability to freely trade with others, to that extent the government is reducing people’s standard of living.

What happens if the U.S. government unilaterally drops all its protective tariffs, import restrictions, and other barriers to trade and foreign regimes don’t reciprocate?

So what? All that means is that the other nation is interfering with the ability of its citizens to exercise their fundamental rights and also with their ability to improve their standard of living through trade. Why should that serve as an excuse for the U.S. government to do the same?

A good example involves Cuba. For decades, the U.S. government has infringed on the fundamental right of the American people to trade with the Cuban people.

What should be done about this? Should the U.S. government negotiate a trade agreement with Cuba?

Of course not. It should simply stop interfering with the right of the American people to trade with the Cuban people.

Does that mean that the Cuban regime would lift its restrictions on the right of Cuban citizens to trade with Americans?

Of course not. But that’s not the point. The point is that Americans have the right to be free even if the Cuban regime is not freeing its citizens. That is, the fact that the communist regime in Cuba is controlling the economic activities of its citizens does not justify the U.S. government’s doing the same to the American people.

Moreover, if the Cuban regime sees the light and begins lifting its restrictions, Americans can quickly enter the marketplace without waiting on some trade agreement to be negotiated between the two governments.

Oh, there’s one more benefit to unilateral free trade. It would enable the federal government to permanently shut down the office of the U.S. trade representative, thereby saving American taxpayers some $47 million. It would also enable Michael Froman and other bureaucrats in that federal agency to get productive jobs in the private sector.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.