Using the American Marketplace for Profit

04/09/2008

Paul Munnis


Those who support globalization, including the Columbian Free Trade Act, call it “protectionism” when Democrats want to change the approach to U.S. Trade in order to retain American jobs and stop the off-shoring trends. I am not on board with those people. What I think that we should be doing instead is to place tariffs on the offshore goods in the form of excise taxes.

For example, a lot of goods are imported to the U.S. from China. I would put an excise tax on imports. Companies buy their telephone coverage from India I would put an excise tax on phone calls made to the U.S. from India, including VoIP. America should be profiting from granting access to our U.S. market by foreign nations. That profit should be invested in rebuilding our American infrastructure. We have a big foreign trade deficit and its getting worse. The way to fix that is to charge for market access.

The Internet has been an American invention and it has empowered foreign nations with a way to improve trade in their own nations. We do not charge foreign companies for use of the Internet and we compete with foreign companies over the Internet. I think we have created enough free market for foreigners. Now we need to charge for goods coming into the American marketplace. We should also charge an import tax to nations fulfilling Internet orders for shipment to the U.S.A.

Do I think that NAFTA has been a flop? In the case of Canada I think that it has helped create a seamless trade pact that I think is valuable. In the case of Mexico I think it has failed. Because it has failed we have to look at a proposed trade pact with Columbia in light of what has happened in Mexico and we have no reason to be optimistic. Ditto for Guatemala. To keep a seamless trade arrangement we do not need NAFTA. We can just pass a Canadian Trade Act and let it go at that. But now that the Canadian dollar is stronger than the U.S. dollar do we need to give away market access to the Canadians? I think we do not. They can now afford to pay excise taxes to the U.S. and Internet Import taxes, and telephone taxes on incoming calls to the U.S.A.

I also think it is sad to see the U.S. military off-shoring aerospace contracts to France. We have long used the defense industry as a way of getting R&D done for civilian aircraft design and construction by retrofitting military designs for commercial use. To offshore the production of military aircraft is unwise from several viewpoints including the fact that getting replacement parts during wartime could be difficult or impossible.

America needs to rebuild its manufacturing base and this dollar devaluation marks this a perfect time to be doing it. Right now, in world trade terms, our American workers are high productivity, produce high quality at low cost, and are plentiful. When U.S. costs are compared to doing business overseas doing business in America appears pretty good. Maybe wages are cheaper in China but the cost of doing business there is expensive when shipping and quality is factored in. Just one quality recall can wipe out all of the wage advantages of doing business overseas. We are seeing shoddy goods in terms of foods, drugs, and toys being imported. Our government loses oversight when these come from overseas and we need to clean up quality control over the market goods sold in the U.S. Our citizens should not have to die from a Chinese made Pharmaceutical product or from poisonous food before we act.

I can remember in the 1970’s when Japan was charging huge excise taxes to America and refused to let American goods in. When they were trying to build Yamaha Pianos for example they made every American piano be taken apart, inspected, reassembled again, and then held in a warehouse for months before they could be shipped to the Japanese market for sale. We are talking about Steinway pianos which at that time were designed and made in the USA. During that time we were letting Toyota's into the USA at minimum duties. In time our government wised up and told the Japanese that if they wanted to sell Toyota's in America they would have to make them here. They are doing that and the UAW is the Union representing those thousands of Americans getting good paying jobs as a result. That is how we should have handled the aerospace contracts to France – insisted that they make the planes here in the USA. These are just common sense business practices.

You can drum up all sorts of names for my attitude – protectionist, nationalistic, naïve – but I call it none of those. I think the American marketplace is a valuable national asset and I think it should be used to create jobs in America and earn revenue to give U.S. taxpayers a bit of relief. We have to strengthen our dollar and the way to do that is to bring dollars home, create jobs at home, and get money to cover Social Security, Medicare, and to rebuild the nation. There is no reason that the American Marketplace should be subsidizing foreign nations. If we don’t know what else to do with excise taxes then use them to pay down the national debt.

Let’s go Congress. Get with taking care of the American economy. That is what we elected you to do.