The following transcript of The Great Debate: America’s Global Trade Future is imaginary; there was no such television program. But it is a debate that needs to be heard immediately and evaluated carefully by all Americans. It is time for a responsible member of the media to earn its charter and make this happen.

Neal Asbury
President, Greenfield World Trade

MODERATOR: The term “Great Debate” was coined in 1920 to describe the debate between Harlow Shapley and Heber Curtis over the size and makeup of the universe. In 1960, it set the stage for the first-ever televised presidential debate between John F. Kennedy and Richard M. Nixon. More recently, it has been used to describe the deeply emotional discussions about faith and evolution.

Today we use it to frame the most important economic debate of our time: America’s global trade future. Many believe that our exploding trade deficit is the gravest threat we face, while others continue to suggest that deficits don’t matter.

What is certain is that every single American is touched by trade in both positive and negative ways. It is time to ‘take stock’ and understand who the winners and losers are and what it means to the common folk of this great land.

We have brought together a diverse group of distinguished Americans with differing views to help us navigate these complex issues. Speaking will be Leslie Jobs, a well-known economist, author and close adviser to President George W. Bush. Bill Walls is chief of staff for a prominent Democratic member of Congress. Herb Stiles, a successful businessman who considers himself an objectivist, is influenced by the Warren Buffett school of thought. Ken Compeet is an American entrepreneur and exporter.

In a symbolic spirit of fairness sorely lacking in our trade relations, we have drawn straws to determine the order of speakers. We will hear first from Les Jobs.

LESLIE JOBS: Milton Friedman, the architect of America’s liberalized trade, wrote in Capitalism and Freedom that “He moves fastest who moves alone.”

Friedman further asserts, “We should say to the rest of the world: We believe in freedom and intend to practice it. No one can force you to be free. That is your business. … Our market is open to you. Sell here what you can. Use the proceeds to buy what you wish.”

America has always led by example. We have opened our market to the world, with great benefit to people everywhere.  Access to the American market rebuilt Germany and Japan from the ashes of World War II and transformed our wartime enemies into vibrant democracies. The American market gave birth to the Asian Tigers of Hong Kong, Singapore, South Korea and Taiwan. Their economic success has been an inspiration to the world and provides much-needed stability in the region.

Nowhere in the world can we see the stark difference between having and not having access to the American market than the Korean peninsula. If anyone doubts the fruit of America’s free-trade policies, simply look at North Korea and South Korea. Today, the lure and power of the American market is changing China. From Cultural Revolution to Capitalist Revolution in just 20 years, it is one of the most mind-boggling transformations ever. This was made possible by the American consumer. Not only is the world a better place, but also the American consumer has greatly benefited from having the most choices anywhere. The competitiveness of the American market delivers quality products while keeping inflation at an historic low. Our large deficits should not be the overriding concern of our economic policy. It is not correct to conclude that German or Japanese economies are stronger than ours or better managed even though they enjoy large surpluses. The fact that the U.S. economy substantially outperforms the German and Japanese economies suggests that deficits may be desirable.

I often hear angry mobs in Congress accuse Brazil, China and India of subsidizing their exports. Why should we care? If they are willing to provide their products below the cost of production, we ought to welcome them as gifts.

After all, they deliver to us goods from which we derive benefit and pleasure. For their hard work we give them paper dollars that we simply print to cover our deficits. They cannot eat them, wear them, or live in them. They are then compelled to invest them back into the United States.

The system may not be perfect, but it is working. Over time, the distortions work themselves out. No government or country has been able to trick the world market for any sustained period of time. If you don’t believe me, just ask the Japanese.

MODERATOR: We will now hear from Bill Walls.

BILL WALLS: Free trade has been a disaster for workers everywhere. It is time we make a U-turn. Unfettered one-way trade has wrecked U.S. industry and shattered the American Dream in terms of layoffs and lost wages.

The United States has been engaged in a no-win global competition. The countries with the lowest wages, weakest workplace safety laws, biggest polluters and toughest repression of unions have ransacked the American working family.

The unrelentingly sky-high trade deficit with China is proof positive of our failure to adopt trade policies that promote the interests of U.S. workers, businesses and farmers. We can’t keep whistling in the wind and ignoring these deficits. They are undermining our economy and causing hard-working Americans to lose their jobs.

The NAFTA model of free trade, which we have concluded with some of the world’s most poverty-stricken countries, was never designed to expand U.S. exports. The markets are simply too small and the people too poor.

Instead, the underlying objective has been to help U.S. multinationals set up factories in these countries to take advantage of the pitiful low wages and nonexistent safety regulations to manufacture products to be sold in the United States. Not only have these agreements increased imports, they also have removed American workers from quality manufacturing jobs.

International trade is the worst polluter among all economic activities. We are creating the conditions whereby our trade partners ravage the environment. Free trade has flunked all tests. We must build walls of selective protectionism to shield ourselves from the onslaught of 50 years of unfair trade before we are turned into a Third World poverty pit.

MODERATOR: We will now hear from Herb Stiles, a fellow To The Pointer.

HERB STILES: We are at war and losing badly.  Let’s not dilly-dally around with “lawyering.” Our simple goal should be to balance trade, not necessarily country by country, but overall. We can achieve the benefits of Adam Smith’s “specialization of labor” without incurring the problem of Japanese, Chinese, Korean, Canadian and other termites in our economic infrastructure. If we simply establish the one rule of balanced trade – imports must equal exports – the subsidies and unfair trade issues begin to sort themselves out.

To achieve this end, we should issue tradable certificates of import licenses called “Import Certificates (ICs)” to American exporters equal to the dollar value of the goods they sell abroad. These would then be sold in the open market to foreign exporters or American importers wanting to bring goods into the United States, in the same way that SO2 certificates are issued and traded to control air pollution emissions. We would thus create the simplest and most efficient way of balancing imports and exports that the trading markets can deliver. As an example, to import $1 million of goods, an importer would need ICs that were the byproduct of $1 million of exports.  The inevitable result would be balanced trade.

Foreign governments will be motivated to level the playing field, but they will do so in their own idiosyncratic ways. Their export-driven economies are hooked on the American consumer, whom they will not abandon easily. They will feverishly work to find ways to make U.S. exports more attractive in their markets.

This capital control will stimulate U.S. exports and rebalance the economies of both importing and exporting nations in a more positive and sustainable manner without destroying the value of the dollar.

MODERATOR: We will now hear from our final speaker, Ken Compeet, an American exporter who believes that America can compete.

KEN COMPEET: It is beaten into us every day by academia, the media and traitorous CEOs that America can no longer compete. They totally miss the point, whether because of naivete or narrow self-interest.

The issue is not that Americans are uncompetitive; it is that the system we are competing in is intrinsically corrupt and crooked.

It is no mystery why our adversaries fight with such life-and-death intensity to protect and build their export infrastructure.  Dollar for dollar, our exports employ five times more people than our imports do, and they pay 17% higher wages.

Average real wages remain today substantially below their levels of the early ’70s. Despite the rise in the number of two-income households, median after-inflation family income has dropped. It is no coincidence that American wages began their decline at the same time that we lost our global competitiveness. Both parties are equally guilty in their betrayal of American industries. Successive Republican and Democratic administrations have repeatedly and unconditionally surrendered American exports in favor of a foreign policy boondoggle.

It is now time that Americans of all stripes join the fight to regain the manufacturing prowess that was once the envy of the world. From this expertise, American wealth and power was created. Doing nothing to rebuild our export competitiveness will be the genesis of our decline.

Foremost in our struggle is to realize that “free trade” is the most misused phrase on the planet. The reality is that free trade among countries rarely exists. In one place where truly free trade does exist, among the states of the United States, it has been tremendously successful.

Let us examine free trade in its purest form. The U.S. Constitution forbids tariffs among states on any kind of product or service.

All 50 states are under one Congress guided by the U.S. Constitution, which gives power to Congress to regulate interstate commerce.  All 50 states are under the same federal laws controlling banking, the environment, labor rights, safety standards, and copyright and patent protection. All 50 states use the same currency that is not subject to manipulation or devaluation. All 50 states are ultimately answerable to the Supreme Court.

Free trade agreements work because they bring us much closer to the kind of trade that exists between U.S. states. They are comprehensive and not only deal with eliminating tariffs on manufactured and agricultural products but also open up service markets and government procurement. They regulate labor rights, set safety standards, protect the environment, defend against intellectual piracy, and instill due process. In short, they level the playing field. They must be vigorously pursued.

90% of our trade deficit is with countries with which we do not have free trade agreements. The average duty on products entering the United States is 3%, whereas the average duty imposed by a World Trade Organization (WTO) member is 30%. We do not need WTO, but we do need more free trade agreements.

Forty years of Friedman-inspired one-way trade and out-of-control deficits have resulted in a weakened and frightened America.

The call by Mr. Walls to build walls and return to the protectionism of the past will undoubtedly result in a more unstable and suspicious world.

The Import Certificates suggested by Mr. Stiles are simply tariffs by another name, leading to managed trade.

By keeping true to our values and simply allowing Americans to compete, the deficit will be reduced significantly and in a short period of time.

However, it will take determined leadership with the courage to fight. Our trade partners will not easily dismantle the barriers and impediments to American exports that are at the heart of their national agendas.

Time is running out. We must insist on free trade agreements with the countries that cover the bulk of our trade, including Japan, South Korea and, most especially, China.

MODERATOR: I would like to thank our speakers for their passion and patriotism. Let the Great Debate begin in our living rooms, lunchrooms and classrooms across America.  We the people throughout our history have been called upon to take charge of our destiny. Providence has bestowed on ordinary Americans an extraordinary privilege to change things for the better. It is our duty to seize that right.

The Great Debate : America’s Global Trade Future was originally published at To The Point News Friday, October 6, 2006.  The article was then adopted as the theme of the 2007 National District Export Council Conference moderated by CNN award winning journalist Gene Randell.  One of three panel discussions covering the dynamics of U.S. trade and what is in store for the American economy in the future “The China Trade Card” included myself, Trevor Houser, Director, China Strategic Advisory, William Zarit, Regional Director, Asia – U.S. Commercial Service and Richard Latham, Managing Director, Asland China Forgings.  View “The China Trade Card” panel discussion videos on YouTube.

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Part 1

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Part 2

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Part 3