Two Very Stupid Trade Proposals

Andy Roth at the Club For Growth kindly sent around a list of trade-related provisions to some of the free trade folks.

I picked out two of the dumbest ones to share, and what would you know, they’re both sponsored by Ohio’s Marcy Kaptur!

Latest Title: Balancing Trade Act of 2013
Sponsor: Rep Kaptur, Marcy [OH-9] (introduced 1/4/2013)      Cosponsors (None)

What it would do:

To require that, in cases in which the annual trade deficit between the United States and another country is $10,000,000,000 or more for 3 consecutive years, the President take the necessary steps to create a more balanced trading relationship with that country.

Why it’s stupid:

Balanced trade is a harmful, arbitrary idea. If you think back to the comparative advantage example you learned in grade school, hopefully your teacher didn’t insinuate that country A needs to trade equally with country B. That would make no sense. The very point of comparative advantage is that countries are able to capitalize on using and trading the goods they make efficiently, and take advantage of the fact that other countries have their own comparative advantages.

Requiring balanced trade basically means you don’t want to benefit from comparative advantage, since you’re just saying we should all trade equally when it comes to the figures that represent the transactions of individuals in our respective countries. Only outliers like Ian Fletcher, labor unions and mercantilist rent seekers push for this idea. Thankfully, mainstream economists aren’t behind this idea, and it won’t go anywhere.

In short, this economically bad idea would restrict the ability of individuals to trade with other people who live elsewhere, all so an arbitrary balance sheet that isn’t a real deficit is made even.

Latest Title: Congressional Made in America Promise Act of 2013
Sponsor: Rep Kaptur, Marcy [OH-9] (introduced 1/4/2013)      Cosponsors (None)

What it would do:

To clarify the applicability of the Buy American Act to products purchased for the use of the legislative branch, to prohibit the application of any of the exceptions to the requirements of such Act to products bearing an official Congressional insignia, and for other purposes.

Why it’s stupid:

Should items bearing the seal of Congress be made in America? This is populist chaw, and I say no. Right now there are a ton of procurement rules that apply to the things Congress buys for itself, and laws that mandate jobs for blind folks making pens that date back to the Great Depression, while well-intentioned, are just unnecessary.

Does Congress really need made-in-America Fischer Space Pens, or Skilcraft pens made by disabled folks?

No, it doesn’t. It’s just a fluffy PR move to distract you from the fact that they’re passing bad laws day in and day out. A ten-cent bic pen works just fine, whether it’s made in the good old USA, Canada, Mexico or France.


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