Tuesday, April 08, 2008

High cost of politics over trade

Trade saves money for everyone. Everyone. (I don't call it "free trade," because it is always restricted - never free.) Trade between countries allows the market to decide where is the most efficient place to produce something. Country A gets efficient at producing X, so it produces more X and less Y and Z. A trades for them - buys them. And Country B turns to produce less X and more Y or Z. Production goes to the efficient place - counting the cost of transportation. The goods we buy become cheaper. Colombia is our friend between two big problems - Venezuela, Bolivia and Ecuador. So let's treat Colombia like a friend and trade with them; a new trade treaty goes for the vote in the US Senate this week. The Democrats demanded protection for their union buddies, so the treaty was changed for them. But they won't accept yes. John Fund at Wall Street Journal does a good job on the petty politics over Colombia this month.
But in truth, the Uribe government has made great strides in reducing violence in Colombia. Since 2001, the number of kidnappings has dropped by over 80%, acts of terror are down over 75%, and the murder rate associated with trade unionists is down almost 80%. President Uribe made clear how disappointed he was that the Democratic front-runner had chosen domestic politics over geopolitical stability: "I deplore the fact that Sen. Obama . . . should be unaware of Colombia's efforts," he said in a statement. "I think it is for political calculations that he is making a statement that does not correspond to Colombia's reality." The simple truth is that the opposition to the trade agreement--from the Democratic presidential contenders to House Speaker Nancy Pelosi--has nothing to do with reality. Rep. Charles Rangel, chairman of the House Ways and Means Committee, admitted as much recently: "It's not the substance on the ground--it's the politics in the air."

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