August 3, 2006 | Commentary on Foreign Aid and Development

U.S. needs to keep up the fight against trade barriers

The open microphone at the recent G-8 summit produced two newsworthy revelations. The first is that President Bush sometimes uses colorful language when discussing world hot spots.

The second, far more important news arising from "Open Mic Nite" came as the president and British Prime Minister Tony Blair discussed the Doha Round -- the multinational talks designed to expand free trade:

Bush: "I just want some movement."

Blair: "It may be that it's impossible."

Indeed, Doha, aimed at creating a global free-trade agreement, seems to have broken down. The talks basically pitted three groups -- the European Union, the United States and a gaggle of developing countries -- against each other. So far, none is willing to bend enough to make a deal.

If the Doha negotiations ultimately prove fruitless (and last-ditch talks probably will continue), America should keep fighting for free trade every way it can.

During the last 50-plus years, American leadership has helped greatly reduce international trade barriers. We've trimmed subsidies and encouraged the flow of imports and exports, generating economic growth both in developed countries and in developing countries (such as China) that embrace trade liberalization.

Free trade also has helped Americans.

Trade (as a percentage of our economy) has climbed from single digits in the 1930s to nearly one-quarter of U.S. GDP in 2003. During this period, real per capita GDP in the United States (in constant 2000 dollars) has climbed from $5,061 in 1933 to $35,726 in 2003.

The demise of Doha in the face of European protectionism doesn't mean we've reached the end of the line. The success or failure of World Trade Organization talks shouldn't be the only path the U.S. pursues. The Oman-U.S. free trade agreement that passed the House by 22 votes in July is a perfect example of working a parallel line. Washington must think even more creatively about expanding economic freedom and lay tracks to a new destination: a Global Free Trade Alliance.

Much like free trade itself, a GFTA would be beautifully simple. No one has to sign a treaty, because the alliance is voluntary. Countries join by passing laws that guarantee their commitment to free trade, open investment, property rights and minimal regulation. Congress would give GFTA members access to the U.S. market -- with no tariffs, quotas or other trade barriers -- provided they grant the same access to the U.S. and other GFTA members.

Best of all, a GFTA wouldn't compete with the WTO. Both encourage countries to embrace free trade. But as the WTO expands, it has become more difficult to get a deal, since each country has a form of veto power.

Instead of forcing dozens of countries to green-light identical language before a deal takes effect, a GFTA puts the language out there so willing nations can meet those conditions. As new members join, the organization would grow increasingly attractive; neighboring countries would see the benefits of belonging and say, "I want to join, too." That would encourage non-member countries to make market-friendly reforms.

Plus, unlike bilateral or regional free-trade agreements, a GFTA wouldn't be limited to a small number of partners or a specific region. In theory, it could include all nations. However, unlike the WTO (leader of the Doha Round), it would be based on true free-market practices rather than a slow decrease in trade barriers.

We live in an innovative country and an innovative era. If we want poorer countries to enjoy the prosperity and promise of globalization, we need to think creatively about expanding free trade.

Winston Churchill switched parties in 1904 -- joining the Liberals when the Conservatives wavered in support for free trade. Today's conservatives also should be willing to change their approach. It's time for a Global Free Trade Alliance -- one that enables any country to join us in our race to the top.

Edwin Feulner is president of The Heritage Foundation (heritage.org), a Washington-based public policy research institute and co-author of the new book Getting America Right.

About the Author

Edwin J. Feulner, Ph.D. Founder, Chairman of the Asian Studies Center, and Chung Ju-yung Fellow
Founder's Office

First Appeared in the Chicago Sun-Times