Pursue fair trade

United States must do better at opening other nations' markets to American industries

March 18, 2007

BY RON DZWONKOWSKI

FREE PRESS COLUMNIST

Free trade hereabouts generally is taken to mean they send us cheap goods, we send them good jobs. Or we open the border to endless truckloads of Canadian trash, and send auto production to the Canadians because they have government-paid health care.

Oh, Americans get globalization all right. But they get shafted on trade -- at least that's the perception. And there is a rationale for it. The American government has been much more aggressive about opening access to the U.S. market than about making sure foreign markets are open to U.S. goods and services. Everybody on Earth wants to sell here, in the land of the voracious consumer, but nobody wants to throw open their markets to American products -- or even our trash. Instead, they want American employers to build factories in their countries.

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In a recent national survey conducted for the Chicago Council on Foreign Relations, 60% of Americans said international trade was bad for U.S. workers. In a Pew Research Center survey late last year, 48% of Americans said free trade agreements lead to job losses while only 12% said they create jobs.

In a discussion last week at the Detroit Economic Club, I asked the ambassadors to America from Germany and the European Union what Europe needed that the United States could supply. Neither named a product, a good or a commodity kind of thing you might sell at a profit. Rather, they said, the United States can export its can-do attitude, its knack for seeing problems as opportunities, its collegial workplace atmosphere, its entrepreneurial spirit.

What's that worth to a 43-year-old autoworker whose job has just vanished?

Actually, the EU has a far more robust and two-way economic relationship with the United States than the Asian companies that get most of the attention these days. Asia is still largely a one-way deal. A pending trade agreement with South Korea is the latest example.

Last year, American automakers sold about 7,200 cars in South Korea. The South Koreans sold 801,000 in the United States. Maybe South Koreans wouldn't buy any more Cadillacs and Lincolns even if they could, but they're not getting the chance because of their government's import restrictions. And the proposed new trade agreement would send even more of their vehicles our way.

U.S. Rep. Sander Levin, D-Royal Oak, who chairs a key House subcommittee on trade issues, said in a speech last week that South Korea has thrown up "massive non-tariff barriers to American industrial products in general and automotive products in particular ... an economic iron curtain."

"Korea has successfully pursued an industrial policy, following the Japanese model, of sheltering its market and using profits from higher prices in their domestic market to sell autos cheaper in the U.S., and pour the profits into research and development to improve their products in competition with American cars," Levin said. "We welcome competition that helps improve our products, but not distorted markets."

Globalization presents enormous opportunities. Its explosion drove the economic boom of the 1990s. It's not going into reverse. In fact, the EU is proposing a new transatlantic agreement that would share standards across the ocean wherever possible, so manufacturers would not have to meet separate European and U.S. specifications. This makes enormous sense and has global possibilities. The cost savings could be huge and, on some products, from medicines to motor vehicles, there can't be all that much difference between what we'll allow and they'll allow.

American industry will never compete with the Third World on labor costs, but is becoming extraordinarily more efficient and certainly can match anyone on quality and innovation. But the key is in the world's growing markets. The United States cannot keep letting other countries protect their industries at the expense of ours.

American industries don't need protection. They need access. If globalization is all about breaking down international barriers, Uncle Sam needs to be sure they are falling both ways.

RON DZWONKOWSKI is editor of the Free Press editorial page. Contact him at dzwonk@freepress.com or 313-222-6635.