Taking on Our Trade Deficit By U.S. Senator Russ Feingold Racine Journal Times September 25, 2006 There can be no doubt that the deeply flawed trade policies of the past decade and more have sent too many of our jobs overseas, leaving families to struggle financially, and undermining the economic strength of many of our communities. Trade is critical to our economy, but trade agreements have to be fair to the businesses and workers who make that economy run in the first place. As a columnist wrote in the Wall Street Journal about the trade agreements in recent years, “These are not your textbook free-trade deals. These are finely orchestrated special-interest deals that boost the profits and power of multinational corporations, leaving workers, family farmers, many small businesses, and the environment more vulnerable than ever.” As I travel around Wisconsin holding Listening Sessions in each of the state’s seventy-two counties every year, there is nearly universal frustration and anger with the trade policies we have pursued since the late 1980s. Even among those who would have called themselves traditional free-traders, it is increasingly obvious that the so-called NAFTA model of trade has been a tragic failure. I voted against NAFTA, GATT, and Permanent Most Favored Nation status for China, in great part because I felt they were bad deals for Wisconsin businesses and Wisconsin workers. At the time I voted against those agreements, I thought they would result in lost jobs for Wisconsin. But, even as an opponent of those trade agreements, I had no idea just how bad things would be. Now the impact of these agreements is crashing down on people’s lives, and it is clear that we’ve traded away too much in a series of bad deals. And things could hardly be worse. You can see the results of those policies in hundreds of communities around Wisconsin. To help straighten out our flawed trade policies, I have joined Senator Byron Dorgan (D-ND) in the Balanced Trade Restoration Act, which is based on a proposal advocated by one of the foremost free market advocates in the world, Warren Buffett. Our bill is a straightforward and market-based approach to our massive trade deficit. The Balanced Trade Restoration Act focuses on reducing the trade deficit, and while it is not a substitute for soundly crafted trade agreements, it can stem some of the damage done by the trade policies of the past several years. This proposal is simple. It requires that the total value of what we import not exceed the total value of what we export, and rather than trying to pick winners and losers, as some of our trade agreements do, it lets the market decide which product areas will thrive in global competition, and which will not. This is done through the use of Balanced Trade Certificates (BTCs). BTCs would be issued to U.S. exporters in an amount equal to the dollar value of their exports. Upon receiving the BTCs, exporters could use those certificates themselves, or they could sell them, directly or indirectly, to foreign exporters wishing to bring goods into the United States. Foreign exporters would have to have BTCs in an amount equal to the dollar value of the goods they want to bring into the U.S. To import $1 million worth of products, a foreign exporter would have to have BTCs representing $1 million worth of U.S. exports. The result would be trade balance. This legislation is not a substitute for a sound trade policy, but it is a step in a better direction. Even if we enact this measure, we will still need to straighten out the flawed trade policies of the past several administrations. No system of international trade will be sustainable if it does not address the imbalance we have seen over the past decade and more. Congress needs to act on this issue, begin to address the damage our trade agreements have done, and start to turn our flawed trade policies around.