Q: Why are you such a strong supporter of free trade?
A: Over and over again free and fair trade has proven to promote peace, cultivate democracy and help improve the economies of all the countries involved. Free trade is the only way developing economies will truly grow. We saw the danger and damage of protectionism during the Great Depression and World War II. The economic devastation caused by the restrictive trade policies enacted during the 1930s contributed strongly to the prolonged war in which millions died. Trade policies put in place after that war have been largely successful in promoting peace and prosperity in the countries that chose openness and trade. At the same time, there are examples of countries that wall themselves off from the world, like North Korea and Zimbabwe, that have just gotten poorer and poorer. Seeking to expand the number of countries embracing free trade, the U.S. recently completed negotiations of a free trade agreement with five Central American countries and the Dominican Republic. This agreement has the potential to help further stabilize this region and be the next step forward towards freer and fairer trade around the world.
Q: What would the Central American Free Trade Agreement (CAFTA) mean for Iowa?
A: I call this agreement the Central American Fair Trade Agreement because it puts American exports to these countries on level footing. Currently, products coming into the U.S. from Costa Rica, El Salvador, Nicaragua, Honduras, Guatemala and the Dominican Republic are almost all duty free. In fact, over 91 percent of the food and agriculture products that we import from this region come into our country without any tariffs or other trade barriers. Meanwhile, our food and agriculture exports are hit with an average tariff of 11 percent, with some as high as 150 percent. By getting rid of the barriers American goods face, this agreement is a good deal for our farmers and manufacturers.
Q: What about reports about people who have lost their jobs because of trade. Is anything being done to help them?
A: It is important to point out that this agreement won’t make it any easier than it is right now for a company to move its production and, as a result, American jobs to any of the countries participating in this free trade agreement. Products from these countries already come to America duty-free, so there is nothing to stop a business from moving its production to any of these countries today. To help workers who are displaced because of trade, the government has offered trade adjustment assistance to displaced employees since the 1960s. Trade adjustment assistance offers occupational training to dislocated workers. Income support, relocation allowances, job search allowances, and a health coverage tax credit are also available through the trade adjustment assistance program. These benefits help smooth the difficult transition and prepare people for future employment.