Free trade improves economy

While most Americans have been watching the War on Terrorism unfold on CNN, Congress has been quietly debating an important piece of trade legislation. The issue at hand is whether to grant President Bush Trade Promotion Authority (TPA). Without question, TPA is essential for the president to eliminate costly barriers to trade that hurt U.S. consumers and stunt economic growth. When Indiana\'s Senators consider the Trade Promotion Authority Act later this year, they should support TPA.\nDespite the claims of organized labor, agricultural interests and a handful of other producing industries in the U.S.; freer global trade is good for consumers. In the absence of trade restrictions, consumers will have access to a wider variety of products at lower prices. Competition will ensure that firms in trade-sensitive industries will no longer be able to charge high prices for goods that can be produced and sold for less by foreign competitors. \nMultilateral trade agreements, such as the proposed Free Trade Area of the Americas (FTAA), will also stimulate domestic production and create more jobs for U.S. workers. These agreements expand the scope of the market for U.S. goods abroad. With access to new potential buyers in other countries and cheaper imported intermediate and capital goods from trading partners, U.S. businesses lower costs and produce more in order to satisfy the demands of a larger total number of consumers. That is why even traditionally protectionist industries such as manufacturing typically see output and imports rise together.\nFreer global trade also creates jobs in poorer developing countries.\n"Jobs in export industries and foreign-owned affiliates generally pay significantly higher wages than do jobs in non-trade-related industries," said Daniel T. Griswold, the associate director of the Center for Trade Policy Studies at the CATO institute.\nThe World Bank also notes that developing countries engaged in trade have an average of 5.1 percent per-capita income growth annually. Isolated countries usually see per-capita income decline each year. If the less developed world is to pull itself up out of poverty, it must be able to participate in the global economy. Tariffs and quotas that protect U.S. producers deny them that opportunity.\nFinally, trade provides the most effective means for improving worldwide labor and environmental standards. This is because nations that are open to trade tend to grow faster and achieve higher incomes than do less-open nations. Those with higher incomes tend to maintain higher labor and environmental standards.\nThe U.S. should encourage free trade and investment flows so that low standard countries can develop more rapidly. Then they will adopt the kind of meaningful labor and environmental standards that the developed world has already accepted.\nHoosiers shouldn\'t have to pay for the benefits that protection accrues to a handful of select U.S. industries. Government restrictions on trade only destroy jobs, support artificially high prices, and deny developing nations the opportunity to participate in the global economy.\nWrite to Senators Richard Lugar and Evan Bayh and tell them to stand up to special interests and do what's right for consumers. Indiana supports free trade!