July 05, 2016
The Washington Post is at it again, using a front page piece to repeatedly tell readers that the protectionist pacts crafted by recent administrations are “free trade.” The phrase appears in each of the first two paragraphs.
Of course, the deals are not about free trade. They do deliberately place U.S. manufacturing workers in direct competition with low-paid workers in the developing world. This has the predicted and actual effect of lowering their wages. However, the deals leave in place the protections for highly paid professionals like doctors and lawyers.
It is still illegal to practice medicine in the United States unless you go through a U.S. residency program here. As a result of protectionist measures our doctors earn on average more than twice as much as doctors in other wealthy countries. This costs us roughly $100 billion a year in higher health care bills. “Free traders” would be upset about this.
The trade deals also put in place longer and stronger patent and copyright protections. As a result of these protections, we will spend over $430 billion this year on prescription drugs that would cost around one-tenth of this amount in a free market. Of course, protectionism like this is not free trade.
Educated types think they have to support free trade, so labeling these trade deals as “free trade” pacts undoubtedly wins them support among a substantial segment of the population. However, it is not accurate.
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