In his op-ed “Where the Trade Court’s Tariff Decision Went Wrong” (June 2), George E. Bodgen uses the technique of misrepresenting the words of respected historical figures to support his protectionist views. It’s true, for instance, that Cordell Hull advocated reciprocal trade agreements as a means of reducing tariffs. But when he praised reciprocity for reducing “excessive economic barriers to trade,” he didn’t, contrary to Mr. Bogden’s claim, refer to “unfair trade practices targeting the U.S.” An internationalist, Hull hoped that U.S.-led efforts to reduce tariffs worldwide would promote peace. He understood that, for political reasons, governments will cut tariffs only in exchange for cuts by other governments.
Moreover, the trade negotiations that Hull envisioned were from existing tariff rates. He would have been appalled by the U.S. suddenly jacking up rates and then bullying other countries into negotiating them back down.
As for the claim that U.S. trade deficits are an emergency, there is no evidence that trade deficits have ever dampened economic growth in the U.S. Over the 29 years from demobilization (1947) through the year when America last ran an annual trade surplus (1975), real per-capita gross domestic product grew at an average annual rate of 2.1%. Over the next 29 years, as the U.S. ran trade deficits, 1976-2004, that rate was 2.2%. Today, in the 50th consecutive year of trade deficits, by every economic measure America’s economy is stronger and healthier than ever. A half-century of global capital infusions and economic growth is hardly a problem warranting “emergency” intervention.
Phil Gramm and Donald Boudreaux
AEI and George Mason University
Helotes, Texas, and Fairfax, Va.
Mr. Gramm was chairman of the Senate Banking Committee.
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