Necessary Roughness

An interesting article in the Washington Post relays concerns from Columbia. Employees of a jeans factory that exports to the United States are worried that trade deals that kept their factory in business will be nixed by the Democrat-controlled Congress.

President Alvaro Uribe of Colombia has championed the free-trade agreement and cultivated a friendship with President Bush. The death of the deal would undermine his standing and deprive Colombia of a crucial source of livelihood — export dollars — as it confronts American pressure to eradicate cocaine production.

“This would be a disaster,” said Sergio Clavijo, a former Colombian deputy finance minister, who noted that exports to its neighbor Venezuela are already threatened by continued tensions with Chavez. Without export growth, “narco-trafficking will be the only way out.”

Peru is in the balance between capitalism and Marxism. Peru’s liberal (in the good and classical sense) economist has convinced President Garcia that free trade will attack poverty. Nixing trade deals would have El Presidente considering Chavez-style Marxism.

The Democratic party has been so worried about what the world thinks of us. Killing trade pacts isn’t going to foster trust or give us any more allies.

The article also notes a nice example of the economic law of competitive advantage. Columbia can make jeans more cheaply than we do. The United States is superior to Latin America in food production. If we let each party do what they are best at and trade those goods, more jeans and more food will be available at lower cost.