My conclusion is that it would be smart for the United States to abandon its current negotiating posture, which is that we will take down our trade barriers if you will take down yours.
That is a reciprocity-based strategy, and it is built on a faulty premise, which is that current protectionist measures are good for the United States, but we’re willing to abandon them if other countries abandon theirs, since we really want to get into their markets. That is like saying, I’ll agree to stop banging my head against the wall, but only if you stop banging yours. The implication is that it makes sense for me to bang my head, but I am willing to negotiate that asset away.
As Brink Lindsey of the Cato Institute wrote in 1991 in an article in Reason magazine: ‘The reciprocity-based free-trade strategy helps to frame the whole trade debate in terms that favor the protectionist lobby. The special interests that seek a protectionist bailout rarely admit that they were out-competed by their foreign rivals. Rather they claim that they are the victims of ‘unfair competition.’ . . . A policy of trade negotiations lends credence to this ploy by focusing attention on the other countries’ import barrier and ‘unfair’ practices.’
Exactly. If our aim is to get imports into the United States, which is now at full employment with only 4.7 percent jobless, then the best way to do that is to take down our own barriers, no matter what anyone else does.”