Friedman on Free Trade

I agree with Friedman's latest op ed in support of free trade -- with one caveat. Friedman characterizes Democrats as being anti-free trade isolationists, which they largely are not. (Clinton, he will recall, very much supported free trade agreements).

Most Democrats, in fact, are in favor of trade agreements -- so long as they are fair trade agreements -- a policy that promotes free trade while seeking to protect the jobs of American workers, who are increasingly completing with ultra-low-pay, non-American workers.

Leveling the trade playing field would serve three purposes: 1) it would allow American companies to trade without outsourcing American jobs to the lowest bidders, and 2) it would raise the standard of living for foreign workers, whose countries could not enter into trade agreements with the US until they guaranteed a liveable-wage for their workers, and 3) it would send a message to the international community that the United States is as concerned about the treatment of workers in other countries as we are in our own; in other words, we would lead by example instead of bombast.

Big Ideas and No Boundaries
By Thomas L. Friedman
The New York Times

My rabbi told this joke on Yom Kippur: At the front of the lunch line at a parochial school was a bowl of apples with a sign that read: “Take only one. God is watching.” At the end of the lunch line, after the entrees, was a bowl of cookies, where a student had put up a sign: “Take all you want. God is watching the apples.”

Somehow that joke reminds me of the debate about free trade in America today. Right now, with the Republicans in charge, free trade is secure. Yet, while everyone is watching the front of the line, out back in the country, an erosion of support for free trade is under way. The “Doha” trade talks have stalled, because of opposition by U.S. farmers, and the White House’s “fast-track” authority to negotiate free trade agreements expires soon. With protectionist-leaning Democrats likely to take the House or Senate, any new free-trade accords will probably be stalled.

I hope Democrats won’t go this route. I’ve always believed in free trade, accompanied by better pension and health care safety nets. But I’m not a free trader anymore. I’m now a radical free trader. Why? Because in this new era of globalization, so many people now have the communication and innovation tools to compete, connect and collaborate from anywhere. As a result, business rule No. 1 today is: Whatever can be done will be done by someone, somewhere. The only question is whether it will be done by you or to you. In such a world, the way our society flourishes is by being as educated, open and flexible as possible, so more of our people can do whatever can be done first. It matters that Google was invented here.

“That society which has the least resistance to the uninterrupted flow of ideas, diversity, concepts and competitive signals wins,” says Nandan Nilekani, C.E.O. of the Indian tech giant Infosys. “And the society that has the efficiencies to translate whatever can be done quickly — from idea to market — also wins.”

The old left thinks free trade is something that benefits only multinationals. In fact, it is now critical for small businesses and individuals, who can now act multinationally. They are the ones who create good jobs.

Last week, I was in Nebraska, where I met Doug Palmer. He and his partner, Pat Boeshart, make insulated concrete forms for buildings. The traditional way to insulate concrete with foam is to make the foam and then truck it around the country to building sites to be attached to concrete. Mr. Palmer’s company, Lite-Form, found a Korean machine that, when combined with devices added by his firm, can make the foam and concrete together on site, saving big dollars in trucking. Today, Mr. Palmer’s South Sioux City company imports these machines from Korea, attaches its devices and exports them to Kuwait. His company has an Arabic brochure that tells Kuwaitis how to use the device. The brochure was produced by a local ad agency owned by the Winnebago Indian tribe of Nebraska. The agency was started by the tribe’s economic development corporation. Midwest Indians publishing Arabic brochures for Nebraskans importing from Koreans for customers in Kuwait ...

“Protectionism scares me,” said Mr. Palmer, who has 28 employees. “If we put up a moat and keep doing what we’re doing, thinking we’re the smartest in the world, we’re going to die. We have to have that flexibility to barter and trade.”

A few days later, in Silicon Valley, I met Arijit Sengupta, a young Indian-American educated at Stanford, whose company, “BeyondCore,” developed a software algorithm able to detect and reduce errors in outsourced back-office work. When I met Mr. Sengupta, he handed me a card with his logo, which, he explained, was designed by a graphic artist he found online in Romania. His database and Web server are freeware, and he has outsourced his marketing, sales support and patent filings to Indian firms. When I asked, “Where’s your office?” he held up his BlackBerry, which takes calls forwarded from numbers in India, Boston and Palo Alto. He and his seven workers already have one Fortune 500 client.

“When I started this company I never had to think about geography,” he said. “All I had to think about was: Where was the best resource to get something done. ... What you need are the big ideas. That is the tough thing to come up with.”

The way you keep good jobs in this country is not by building big walls, but by attracting people with big ideas — and then giving them the freedom to do whatever can be done with anyone, anywhere, anytime.

Photo Credit: Thomas Friedman. (Fred R. Conrad/The New York Times)

Response to Friedman:

• MUST READ: Another Open Letter to Thomas Friedman - By David Sirota

  After reading Sirota's article, I hope those of you who reprimand me for being overly critical of Tom-Tom will see that, in comparison, I have been rather kind. That said, I have been too kind; I agree with Sirota 100%.

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