Question

In the travels of a T-shirt in the global economy in the Chapter 10 - Dogs Snarling Together: Congress has constitutional control over trade policy. However, some have noted that it is "unnatural" for a Congressperson to vote for free trade. Why is a vote for free trade characterized as unnatural for members of Congress? Why might a Congressperson be willing to give up their authority over trade policy? If you were in Congress, would you want to maintain or surrender your authority over trade policy? Why or why not?

Answer 1

After the world war 2 the foreign trade began to flourish due to removal and narrowing of trade barriers due to GATT. At the time apparel and textile industry in the US employed about 2.5 million people and with such huge mass dependent on the apparel and textile industry and with the domestic industry facing stiff competition from the imports from foreign players the distress of the domestic apparel industry surged and their voice against imports which could cause their doom intensified.

When a significant portion of the labor force crib about something in a unified and eloquent manner and raise their voice to highlight their misery and distress the policymakers find it hard to ignore it in a democratic nation as they have a vested interest in pleasing the masses and not to disappoint them in any respect as it is these masses who decide the fate of the policymakers in future elections thus ensuring the welfare of the masses is in the interest of the policymakers thus it was in the interest of Congress curtail free foreign trade of apparel and textile as it was opposed by mass labor force. Hence it is the conventional wisdom that when the congressmen can use their influence and authority over policies to secure their future victory in elections by pleasing the prospect voters they will take all the necessary measures to ensure that policies which please the mass voters are implemented, which in this case was policy against free trade, hance it was unnatural for them to vote for free trade as it would jeopardize their future election prospects.

The policymakers imposed Several constrains on foreign trade which was lobbied by strong industrial bodies .The curtailed imposed on free trade of cotton textile resulted in Japan being asked to voluntarily reduce its cotton textile exports to the US and for other nations as well restrains through quotas  were imposed for the cotton textile exports to the US. Cotton farmers, yarn spinners, apparel manufactures all of them came together and unanimously in solidarity made sure their voices are heard to the policymakers which resulted in the policymakers devising and implementing constraints on imports of apparel and textile.

If I were in congress I would want to surrender my authority over foreign trade policy because in foreign trade their will be losers and winners that is an inherent feature of foreign trade. The proverbial invisible hand in the market  as mentioned by Adam Smith is the best judge of what works best for the majority market participants. When policymakers interfere in trade they create distortions in the market. Due to their vested interest they may favor certain parties at the detriment of the economy or other parties, ignoring what is feasible, viable, sustainable and in favor of economic growth in the long run. Hence it is in the interest of the public if the congressmen do not interfere in the market to accomplish their vested interest by favoring certain individuals. The economy and other individuals who fail to lobby should not suffer due to the vested interest of the government and its favoritism for the certain groups, strong lobbyists. In free foreign trade there will always be losers and winners. The government should create a conducive environment to improve the competitiveness of the various domestic industries and firms and enable them to leverage free foreign trade to augment their market outreach and profitability and not create bottlenecks for free trade , it should avoid from interfering in the market and thus distorting it, hindering the the functioning of free market mechanism to protect certain individuals at the cost of others is not sustainable economically. Interference is deemed appropriate only if there is a market failure and not otherwise.

Most of the times when the government exercises authority over trade deals it is those with strong lobbying power who gain from the discretionary power of the government and not the general public, who more often then not are fragmented and fail to express their opinions in a organized and eloquent manner to the policymakers. Thus free trade governed by market mechanism will ensure that the interest of the majority participants in the market  is prevailed over that of strong lobbyist, unions etc. Thus for the congressmen being the representative of the public, it is morally and economically correct to let the market mechanism influence trade rather then them.