Big Labor is gearing up to fight a free trade agreement with Panama supported by the President, Speaker Pelosi, and many republicans. The agreement would reduce or eliminate tariffs and other trade barriers between the two countries. The administration could present the deal before Memorial Day.
Not only does free trade bring lower prices for all consumers by lowering taxes on imported goods, but it also opens markets for American producers to sell their goods. That’s good for everyone involved. Citizens of Panama and the United States would benefit from this agreement–even the members of Big Labor.
Sure, some people might lose their jobs in the short term because they’re out-competed by foreign workers or producers, but the prices of the goods those people used to make that the foreign company now makes will be cheaper for every consumer. Those people that lost their jobs to foreign competition will eventually move into other industries where they have a comparative advantage. They’ll produce the goods that they’re best at producing relative to everyone else. That will drive down prices for still more consumers and the economy will grow as prices fall and consumer dollars purchase more goods than before because the prices are lower.
The last trade agreement passed by Congress was with Peru. It gathered bipartisan support in both the House and Senate, but then-Senator Obama and Biden didn’t vote on the bill. It was implemented in February of this year. Opening up trade with more countries would help our economy to recover and grow. Congress, the president, and even the labor unions should all see that and support the flow of goods across lines drawn by politicians.