Re: US, Japan Fail to Clinch Trade Deal
One of the great economic fallacies of our time is that free trade is beneficial to a country only if its trading partner also adopts free trade. Thus we witness the spectacle and bear the expense of watching pompous bureaucrats failing to negotiate a free trade agreement with Japan. Such negotiations are completely unnecessary. The US will benefit from freely importing Japanese goods even if Japan fails to freely import ours. US consumers will have access to the full range of Japanese products at lower prices, increasing our standard of living. And what will Japan do with the dollars that it accepts in exchange for its products? Either it must spend them in the US, buy from another country that is willing to accept dollars for its goods, or buy US securities. In the short run the US has exchanged pieces of paper for valuable goods. In the long run the US must hand over valuable goods to holders of dollars, whoever they may be. There is nothing here that is disadvantageous to the US; on the contrary, the US consumer's standard of living increases while that of the Japanese consumer suffers. Therefore, the US should set an example to the world by firing its trade negotiating teams and adopting unilateral free trade. The example of the benefit to the US consumer and the irrefutable fact that holding massive quantities of dollars indefinitely does not benefit foreigners will result in other countries gradually abandoning their own trade restrictions, making the world more prosperous and more peaceful.