Battle4Liberty

I’ve decided to post at least one more blog on the free/fair trade debate, this one on government regulations.

Free trade opponents in the US typically argue that Mexico, China, Viet Nam, and other less-developed trade partners do not have a similar regulatory infrastructure. Because “they don’t care about the environment or treating people fairly,” manufacturers there “get away with paying dollar-a-day” wages in sweatshops and dumping their waste directly into rivers and streams. This lack of common sense regulations, the argument goes, allows irresponsible companies—many with connections to US firms—to enjoy an unfair cost advantage. American companies that play by the rules just can’t compete.

There is some truth to this argument. Dumping pollutants into rivers is not uncommon in the developing world. Here are two examples of many:

http://www.ibtimes.com/chinas-river-blood-jian-turns-red-after-chemical-dump-photos-709258

http://www.washingtonpost.com/wp-dyn/content/article/2006/10/24/AR2006102400987_pf.html

But the argument weakens when we consider how much “common sense” is really a part of most of these regulations. While workers in the developing world earn much less than those in the US, their wages are set by the market. They line up for jobs in the factory just as many Americans did a hundred years ago because production work is more attractive than the alternative. Agriculture is the best option for some, but others who cannot find work in factories simply live on the streets and beg, or even turn to prostitution. Economies differ and it’s not necessary to pay $15 an hour to a line worker in Bangladesh just because Hillary and Bernie think companies should be forced to pay that as a minimum wage.

It is also true that US firms are over-regulated and spend a lot on compliance. It’s not reasonable to expect developing nations to over-regulate their economies to be on a par with US firms. We can solve much of this problem by cutting and streamlining regulations in our own industries so that the “regulation gap” narrows.

I haven’t heard Trump cite the regulation argument for restricting trade, but I’ve heard Sanders and others on the left do so. While some of the basic environmental arguments might be valid—especially if the pollution directly affects the US as is the case with Mexican border cities—we should clean up our own house first. There are no objective standards when it comes to various forms of regulation, so insisting that other countries should meet ours doesn’t make sense.

When it comes to regulating business, we should focus on cutting at home instead of forcing other nations to match our inefficiencies. Trump appears to understand this facet of the trade debate and is calling for less regulation. Clinton wants more restrictions on business which will only increase costs and make us less competitive as a nation.