The US Does Not Need Economic Integration or Globalization

Somber industrial scene, imports and closed factory image courtesy of Antonio Graceffo

 

The Transpacific Partnership (TPP), another Obama-era globalist free trade agreement, is back in the news, and unsurprisingly, the usual suspects think the US is missing out by not surrendering its sovereignty and allowing other countries to export to the US tariff-free. In addition to free trade, globalists think the only way to save the American economy is to allow millions of people into the country who are willing to work for $5 an hour.

Globalists believe that the US needs integration with the rest of the world and that this integration is some sort of panacea that will solve all the world’s problems while improving the lives of all people. Groups like the Asia-Pacific Economic Cooperation (APEC) argue that inequality has widened and that integration will help to reduce it. However, if the US integrates with poorer countries, we will wind up with an average, which means Americans will lose while the people from the developing countries will gain.

One example would be Mexico, where the average income is $11,500 per year, whereas in the US it is $70,000. If we calculate a weighted average, considering the difference in the size of the populations, we get about $25,000. So, if the US integrates with Mexico, we can eliminate income disparity if we all agree to live on just $25,000 per year. This is essentially what globalist organizations want. By forcing the US to integrate its economy with other nations, we would just be decreasing the standard of living for Americans.

Of course, the US could also integrate with Haiti, which has a per capita GDP of less than $800 per year. The globalists would love that.

An organization called Global Sourced praised Clinton and Obama for their contributions to the globalization of the United States in an article titled “Globalization: The Foundation of America’s Economic Power.” They miss the point that the foundation of American power is hard work, fair courts, a lack of corruption, a high degree of freedoms, innovation, risk-taking, education, democracy, private property rights, capitalism, and one of the highest worker productivity in the world. The countries they want the US to integrate with generally have high levels of corruption, low levels of judicial independence, and lower worker productivity. They also tend to have higher degrees of socialism. Integrating the two economies won’t solve the problems of the poorer country.

The North American Development Bank wrote, “U.S.-Mexico Border: Linchpin for the Economic Integration of North America.” American conservatives would see this as a stronger argument to keep the border secure. However, Obama is still active on the speaking circuit, telling globalist conferences that the US needs globalism and that it is the only way to transition to lower inequality and green energy.

Similarly, President Biden has instructed the United States Trade Representative (USTR) to promote “Biden’s Vision for Worker-Centered Trade Policy.” This policy is supposed to improve the lives of workers by ensuring compliance with “international labor rights under U.S. trade agreements,” but the Biden administration “excludes foreign workers, employers, and counterpart governments from those processes.” By not forcing countries that export to the US to comply with international labor rights, Biden is giving these countries an unfair price advantage, which will only increase the amount of foreign products in the US while eliminating US jobs.

The globalists are also pushing for US participation in multinational organizations and trade agreements. The Transpacific Partnership (TPP), for example, is a massive, multilateral trade group championed by Obama, which Trump rightly pulled the US out of. Supporters of the TPP claim that it will create jobs, but this makes absolutely no sense as the tariff-free imports from countries with low wages will eliminate manufacturing jobs in the US. Meanwhile, poor countries are unlikely to buy increasing quantities of high-value, high-priced US export goods.

Critics of the US aversion to joining these large groupings always argue that the US is missing out. But that is not the case. The US is the world’s second-largest trading country, and that will not change by joining these groupings. The US is the biggest importer, and these countries will not refuse to sell to us. The US dominates certain areas of trade where China doesn’t hold a candle, such as machine parts, farm machinery, white goods (appliances), precision technology, aviation and space technology, and food.

Additionally, the US already has bilateral trade agreements with most of the world and is already trading, investing, and maintaining diplomatic relations with all but six countries: Afghanistan, Bhutan, Iran, North Korea, Syria, and Yemen. Other than Bhutan, those countries are all pariah states, and all of them are poor. The US is losing nothing by not establishing free trade or economic integration with them.

Among the supposed benefits of the TPP is the “greater integration of the economies,” but it is unclear why anyone believes that integration would benefit the United States. The US is the richest country by GDP and the eighth richest by per capita GDP. The US dollar is the dominant trade and reserve currency. As stated above, the US already trades with the world. No harm could possibly come from securing the southern border, controlling immigration, remaining outside of transnational trade groupings, and just continuing to trade and invest with other countries as we always have.

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Dr. Antonio Graceffo, PhD, China MBA, is an economist and national security analyst with a focus on China and Russia. He is a graduate of American Military University.

You can email Antonio Graceffo here, and read more of Antonio Graceffo's articles here.

 

Thanks for sharing!