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Small Town Sympathy Shouldn’t Trump Common Sense Trade Policy

Posted By Ryan Olson On October 11, 2012 @ 8:00 pm In International | Comments Disabled

Recent negotiations [1] of the Trans-Pacific Partnership have sent representatives of government supported industries, like New Balance [2] shoes, scrambling for political help to maintain their high tariffs. While an economic case can’t be made for keeping these tariffs in place, proponents are touching a much more emotional one: culture.

New England has always stood out from the rest of the United States for its embrace of small town manufacturing, which, in its time, contrasted sharply with the huge, vertically integrated factories of the Midwest, like Henry Ford’s River Rouge Complex [3] in Dearborn, Michigan. In its infancy, New England manufacturing revolved around textiles, with firms taking advantage of hydropower from the area’s quick running rivers.

From these roots the “mill town” evolved—towns that developed specifically because of the work produced from the factory. These “mill towns” produced a whole generation of workers that prospered in the mills—towns like Lowell, Lawrence, and Pittsfield, Massachusetts.

Over the years international competition and America’s evolving economy have made many of these industries obsolete, yet the cultural image of idyllic towns with their home-grown manufacturing remains. And so does the desire to protect them through wasteful tariffs that make up for their lack of competitiveness. Arguing for the tariff protection for the few remaining small-town industries, Senator Olympia Snowe (R–ME) said: [4]

Small towns across America…are home to these companies [and] depend on footwear-related manufacturing jobs…the elimination of duties on Vietnamese and Malaysian footwear could give these countries an overwhelming competitive advantage that could put domestic manufacturers at a potentially insurmountable disadvantage.

This cultural soft spot for small town manufacturing is epitomized by New Balance, whose Lawrence, Massachusetts factory resides in a 19th century textile mill [5]. This ancient multi-storied mill has to compete with huge, modern, and efficient plants in Vietnam.

So how does it succeed? It gets the U.S. government to raise its competitor’s prices between 10 percent and 38.5 percent through import tariffs. In the end it is the American consumers who literally pay this price.

Embracing the cultural heritage of manufacturing in New England is honorable, but doing it at the expense of American consumers who suffer from the high prices that these tariffs cause is just selfish. We should want more from our economy than manufacturing jobs that our great-great-grandparents had. Protecting old industries is not the way to make America more competitive in the 21st century.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/10/11/small-town-sympathy-shouldnt-trump-common-sense-trade-policy/

URLs in this post:

[1] negotiations: http://blogs.wsj.com/searealtime/2012/09/03/u-s-trade-rep-confident-about-trans-pacific-partnership/?KEYWORDS=tpp+leesburg

[2] New Balance: http://www.msnbc.msn.com/id/49025398/ns/business-careers/t/new-balance-presses-us-keep-vietnam-shoe-tariffs-protect-jobs/

[3] River Rouge Complex: http://www.nps.gov/nr/travel/detroit/d38.htm

[4] Senator Olympia Snowe (R–ME) said:: http://www.snowe.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=1f9412ff-cd68-42d8-b9d9-b6baaaed3771&ContentType_id=ae7a6475-a01f-4da5-aa94-0a98973de620&Group_id=2643ccf9-0d03-4d09-9082-3807031cb84a

[5] 19th century textile mill: http://www.npr.org/2011/11/16/142414371/pacific-rim-trade-deal-may-force-new-balance-to-run

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