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One reason is that many nations have lower costs of production -- based upon a lower standard of living, cheap labor, inexpensive raw materials, protective government policy, etc. Multinationals who have moved their plants to foreign locations enjoy the best of both worlds -- inexpensive manufacturing costs and unlimited access to the world's biggest consumer market, the USA. Our laissez-faire trade stance, when coupled with many nations' protective trade stances and the inherent disparity of living standards around the world, is proving to be a recipe for ever-increasing trade deficits. Exacerbating the situation, GATT and NAFTA are proving difficult to implement when other nations improvise phony trade issues and drag their feet at every opportunity. Bottomline, the U.S. is having problems with free trade. There is an alternative to free trade. It's called EQUITY OF TRADE. It would work like this: Under equity of trade, if the nation or other trading entity in question wants to export some manufactured item or food product into this country, and if the item in question is priced lower than a comparable item manufactured or grown in the U.S., then the trading entity is required to pay a tariff (import duty) at the Port of Entry that equals the difference between the landed-price of the good and the average cost of a comparable American-made good. Example: A shirt made in Sri Lanka lands on U.S. shores with a cost of $15, while a comparable shirt made in the U.S. would cost $25. The foreign entity would then pay a tariff of $10 per shirt. However, instead of good ol' Uncle Sam pocketing the tariff income on behalf of the federal government (which it's not entitled to and which creates ill-will and does nothing to foster long-range, mutually-beneficial trading relationships), deposit the collected tariff monies into an interest-bearing trading account in a U.S. bank in the exporting nation's name (or company or any other entity). Then give the foreign trading entity 12 months to redeem the trade credit and accrued interest by purchasing any U.S. raw material, manufactured good, or service. If the trading entity doesn't redeem the accumulated trade credit within 12 months, only then does the deposited import duties go to Uncle Sam. It's logical to believe that the foreign trading entity will not leave all the tariff money and accrued interest to go into the U.S. Treasury by default. It will purchase a like amount of goods and services to wipe out the trade credit account. Analyze what happened: No one got taken advantage of. America got the imported goods. The foreign entity received a like amount of American goods or services. The trade books are balanced. All monies earned interest every step of the way. The U.S. didn't allow inexpensive foreign goods to displace American goods on price alone. It made the foreign goods compete on a quality basis with American goods. American consumers will make the choice of which is better at a comparable price. If the foreign goods are really superior to the American goods, then the foreign manufacturer will have earned an increased share of the world market and the U.S. manufacturer or ag producer will have to get more competitive or go out of business. The reverse is also true -- so the free market and the law of supply and demand still gets a chance to work, but it works on the basis of quality and value, not upon inherent differences in world standards of living. Is it logical for the U.S. to unilaterally adopt Equity of Trade? It is logical if Americans want to continue the nation's constitutional directive to "protect" the American way of life and the economy from any sort of foreign threat or unfair competition. The nation has never shirked its responsibility to go to war when necessary to "protect, defend, and preserve" the American way of life and American way of government for ourselves and future generations. Therefore, it is illogical for Americans to stand aside and passively let our standard of living decline because our economy isn't worth "protecting, defending, and preserving" for ourselves and future generations. Do Americans want their grandchildren working in the world's most "competitive labor market" if those grandchildren have to work and live like a maquilladora in a Mexican factory or farm with oxen like a farmer in China to make that claim? The point is this ... anyone can be competitive with his or her labor is he or she is willing to sacrifice in living standards. What's difficult is to be competitive while maintaining or improving your standard of living. If the U.S. and other nations are to be competitive in world markets, then isn't it preferable to be competitive by raising other nations to the American standard of living, rather than us declining to theirs? That's what Equity of Trade does and Free Trade fails to do. THE LURE OF PROTECTIONISM The argument for so-called ``protectionism'' (called ``fair trade'' by some) may at first sound appealing. Supporters of ``protectionist'' laws claim that keeping out foreign goods will save jobs, giving ailing domestic industries a chance to recover and prosper, and reduce the trade deficits. Are these claims valid? PROTECTIONISM: WHAT IT COSTS Classical Liberal philosopher John Stuart Mill astutely observed in the last century that ``Trade barriers are chiefly injurious to the countries imposing them.'' It is true today as it was then, for the following reasons: LOST JOBS: Protectionist laws raise taxes (tariffs) on imported goods and/or impose limits (quotas) on the amount of goods governments permit to enter into a country. They are laws that not only restrict the choice of consumer goods, but also contribute greatly both to the cost of goods and to the cost of doing business. So under ``protectionism'' you end up poorer, with less money for buying other things you want and need. Moreover, protectionist laws that reduce consumer spending power actually end up des troying jobs. In the U.S.A., for example, according to the U.S. Department of Labor's own statistics, ``protectionism'' destroys eight jobs in the general economy for every one saved in a protected industry. HIGHER PRICES: Japanese consumers pay five times the world price for rice because of import restrictions protecting Japanese farmers. European consumers pay dearly for EC restrictions on food imports and heavy taxes for domestic farm subsidies. American consumers also suffer from the same double burden, paying six times the world price for sugar because of trade restrictions (to give but one example). The U.S. Semiconductor Trade Pact, which pressured Japanese producers to cut back production of 256K comput er memory chips, caused an acute worldwide shortage of these widely used parts. Prices quadrupled and companies using these components in the production of electronic consumer goods, in various countries around the world, were badly hurt. HIGHER TAXES: Protectionist laws not only force you to pay more taxes on imported goods, but also raise your general taxes as well. This is because governments invariably extend their Customs Department bureaucracies to force compliance with their new rounds of trade restrictions. These bureaucrats must be paid. There is also the expense of more red tape and paperwork for trading companies and more harassment of individual travellers passing through the borders. THE DEBT CRISIS: Western Banks are owed hundreds of billions of dollars by Eastern European and Third World countries. Trade restrictions by Western governments, however, have cut off Western markets for these countries, making it virtually impossible for them to earn the hard currencies necessary to repay their loans. This increases the very real possibility of a collapse of the world banking system. PROTECTIONISM: WHO GAINS? In spite of evidence of damage caused by trade restrictions, pressure for more ``protectionist'' laws persists. Who is behind this, and why? Those who gain from ``protectionist'' laws are special-interest groups, such as some big corporations, unions, and farmers' groups -- all of whom would like to get away with charging higher prices and getting higher wages than they could expect in a free marketplace. These special-interests have the money and political clout for influencing politicians to pass laws favorable to them. Politicians in turn play on the fears of uninformed voters to rally support for these laws. THE LOSERS? YOU and all other ordinary consumers. Your freedom is being trampled into the dust by these laws, and you are literally being robbed, through taxes and higher prices, in order to line the pockets of a few politically-privileged ``fat cats''. ``Protectionism is a misnomer. The only people protected by tariffs, quotas and trade restrictions are those engaged in uneconomic and wasteful activity. Free trade is the only philosophy compatible with international peace and prosperity.'' Dr. Walter Block Senior Economist, The Fraser Institute (Canada) TRADE WARS -- BOTH SIDES LOSE When the government of Country ``A'' puts up trade barriers against the goods of Country ``B'', the government of Country ``B'' will naturally retaliate by erecting trade barriers against the goods of Country ``A''. The result? A trade war in which both sides lose. But all too often a depressed economy is not the only negative outcome of a trade war . . . WHEN GOODS DON'T CROSS BORDERS -- ARMIES OFTEN DO History is not lacking in examples of cold trade wars escalating into hot shooting wars: * Europe suffered from almost non-stop wars during the 17th and 18th centuries, when restrictive trade policy (mercantilism) was the rule; rival governments fought each other to expand their empires and to exploit captive markets. * British tariffs provoked the American colonists to revolution, and later the Northern-dominated U.S. government imposed restrictions on Southern cotton exports -- a major factor leading to the American Civil War. * In the late 19th Century, after a half century of general free trade (which brought a half-century of peace), short-sighted politicians throughout Europe again began erecting trade barriers. Hostilities built up until they eventually exploded into World War I. * In 1930, facing only a mild recession, U.S. President Hoover ignored warning pleas in a petition by 1028 prominent economists and signed the notorious Smoot-Hawley Act, which raised some tariffs to 100% levels. Within a year, over 25 other governments had retaliated by passing similar laws. The result? World trade came to a grinding halt, and the entire world was plunged into the ``Great Depression'' for the rest of the decade. The depression in turn led to World War II. The #1 DANGER TO WORLD PEACE The world enjoyed its greatest economic growth during the relatively free trade period of 1945-1970, a period that also saw no major wars. Yet we again see trade barriers being raised around the world by short-sighted politicians. Will the world again end up in a shooting war as a result of these economically deranged policies? Can we afford to allow this to happen in the nuclear age? "What generates war is the economic philosophy of nationalism: embargoes, trade and foreign exchange controls, monetary devaluation, etc. The philosophy of protectionism is a philosophy of war.'' Prof. Ludwig von Mises FREE TRADE: THE SOLUTI0N A century and a half ago French economist and statesman Frederic Bastiat presented the practical case for free trade: ``It is always beneficial,'' he said, ``for a nation to specialize in what it can produce best and then trade with others to acquire goods at costs lower than it would take to produce them at home.'' In the 20th century, journalist Frank Chodorov made a similar observation: ``Society thrives on trade simply because trade makes specialization possible, and specialization increases output, and increased output reduces the cost in toil for the satisfactions men live by. That being so, the market place is a most humane institution.'' WHAT CAN YOU DO? Silence gives consent, and there should be no consent to the current waves of restrictive trade legislation being passed. If you agree that free trade is an essential ingredient in maintaining world peace, and that it is important to your future, we suggest that you inform the political leaders in your country of your concern regarding their interference with free trade. Send them a copy of this pamphlet. We also suggest that you write letters to editors in the media and send this pamphlet to them. Discuss this issue with your friends and warn them of the danger of current ``protectionist'' trends. Check on how the issue is being taught in the schools. Widespread public understanding of this issue, followed by citizen action, is the only solution. Free trade is too important an issue to leave in the hands of politicians. ``For thousands of years, the tireless effort of productive men and women has been spent trying to reduce the distance between communities of the world by reducing the costs of commerce and trade. ``Over the same span of history, the slothful and incompetent protectionist has endlessly sought to erect barriers in order to prohibit competition -- thus, effectively moving communities farther apart. When trade is cut off entirely, the real producers may as well be on different planets. ``The protectionist represents the worst in humanity: fear of change, fear of challenge, and the jealous envy of genius. The protectionist is not against the use of every kind of force, even warfare, to crush his rival. If mankind is to survive, then these primeval fears must be defeated.'' Ken Schoolland -- Former U.S. International Trade Commission EconomistFormer Special Advisor to the White House -- -- Member of ISIL Board of Directors Everyday 3,000 children start smoking, most them between the ages of 10 and 18. These kids account for 90 percent of all new smokers. In fact, 90 percent of all adult smokers said that they first lit up as teenagers (Roberts). These statistics clearly show that young people are the prime target in the tobacco wars. The cigarette manufacturers may deny it, but advertising and promotion play a vital part in making these facts a reality (Roberts). The kings of these media ploys are Marlboro and Camel. Marlboro uses a fictional western character called The Marlboro Man, while Camel uses Joe Camel, a high-rolling, swinging cartoon character. Joe Camel, the "smooth character" from R.J. Reynolds, who is shown as a dromedary with complete style has been attacked by many Tobacco-Free Kids organizations as a major influence on the children of America. Dr. Lonnie Bristow, AMA (American Medical Association) spokesman, remarks that "to kids, cute cartoon characters mean that the product is harmless, but cigarettes are not harmless. They have to know that their ads are influencing the youth under 18 to begin smoking"(Breo). Researchers at the Medical College of Georgia report that almost as many 6-year olds recognize Joe Camel as know Mickey Mouse (Breo). That is very shocking information for any parent to hear. The industry denies that these symbols target people under 21 and claim that their advertising goal is simply to promote brand switching and loyalty. Many people disagree with this statement such as Illinois Rep. Richard Durbin who states " If we can reduce the number of young smokers, the tobacco companies will be in trouble and they know it "(Roberts). So what do the tobacco companies do to keep their industry alive and well? Seemingly, they go toward a market that is not fully aware of the harm that cigarettes are capable of. U.S. News recently featured a discussion of the smoking issue with 20 teenagers from suburban Baltimore. The group consisted of ten boys and ten girls between the ages of 15 and 17. When asked why they started smoking, they gave two contradictory reasons: They wanted to be a part of a peer group. They also wanted to reach out and rebel at the same time. " When you party, 75 to 90 percent of the kids are smoking. It makes you feel like you belong," says Devon Harris, a senior at Woodlawn High. Teens also think of smoking as a sign of independence. The more authority figures tell them not to smoke, the more likely they are to pick up the habit (Roberts). The surprising thing is that these kids know that they are being influenced by cigarette advertising. If these kids know that this advertising is manipulating them, why do they still keep smoking? The ads are everywhere, especially in teen-oriented magazines, such as Rolling Stone and Spin. The ads also fuel some of the reasons the children gave for starting. They represent rebellion, independence, acceptance and happiness. These are all the things a young person, between childhood and adolescence, needs and desires. This type of advertising, on top of peer pressure, is the mystery behind the rise in adolescent smoking. How do we stop the future of America from smoking? Here are three things that the experts recommend. Try to convince your children that smoking is not cool. Talk to your kids at a young age about the dangers of smoking. Identify family members who smoke and ask them to stop (Thomas). Children are the most valuable commodity we are given in life. Let's try to educate them while they're young to be independent thinkers and to not be swayed by the tobacco companies who are trying to take advantage of their mind and body. Bibliography: Word Count: 2927
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