Free Trade by Any Means: How the Global Free Trade Alliance Enhances America’s Overall Trading Strategy

As a compliment to multilateral negotiations, Bush’s administration has increased bilateral and regional free trade agreements. However, there is another option to consider, the Global Free Trade Alliance, or GFTA. This is not a treaty, but as the name states, an alliance. This alliance would compliment bilateral, regional, and multilateral free trade negotiations. The nations involved with GFTA would have a provable commitment to “free trade and investment, minimal regulation, and property rights.” GFTA would allow the U.S. and other members mutual access to their markets with no tariffs, quotas, duties, or other trade restrictions or barriers.

The advantages GFTA are: 1) by being based on established policies and shared commitment to free trade, not by negotiation; 2) by meeting governmental requirements there would be immediate entrance into GFTA thus bypassing congressional approval; 3) countries participating in GFTA would be able to maintain their independence to accept rules that infringe the GFTA, with the understanding that they would lose their access to the U.S. and other nations markets; 4) belonging to GFTA would promote more membership as more countries become involved. They could still keep their property rights while opening their markets to meet the criteria for GFTA; 5) GFTA would include all nations in true free trade, not limiting them to the bilateral or regional trade agreements. This agreement should compliment our trade programs already in place.

In the past, the Smoot-Hawley Tariff Act did more harm than good and it was one of the causal reasons to the Great Depression. This tariff caused unemployment to rise while reducing overall trade by one half. Free trade has benefits to our standards of living as well. First, by increasing the effectiveness of the U.S. economy this will play a part in job growth. Second, tariffs and other obstacles to trade carry hidden taxes that affect the U.S. businesses and consumers. Given that, the effects of barriers to trade include reducing growth, job loss, higher prices for all consumers, and reduced spending power.

We are not alone in this situation where hidden import fees charged to consumers amounted to $18 billion for 2003 for the U.S. By no longer having these duties charged on imports prices should go down, saving money to all involved.

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