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Are Foreign Lobbyists Really a Threat?

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Throughout the campaign finance investigation, there has been a presumption that lobbyists representing foreign interests are automatically inimical to the interests of the American people. Domestic lobbyists are bad enough, according to most people. But foreign lobbyists must be even worse. Right?

Not necessarily.

If we look in one particular area of policy, world trade, foreign lobbyists are more likely to be working to reduce government power than their domestic counterparts. And that is good for the American people, for the simple reason that free trade is good for them. Free trade raises living standards through competition and the efficient use of scarce resources. Not coincidentally, it is also the only policy that respects individual liberty.

Lobbyists for American companies are notorious for seeking government favors that violate the right of Americans to trade with whomever they wish. No surprise here. If the government has the power to give out goodies, people will line up to collect them. The culprit is the government, not the lobbyists.

As a result, the United States has as long a list of products protected from foreign competition as almost any other nation on earth. Each of those items is protected at the request of an American firm or industry. The government maintains strict quotas on textiles and clothing, on a variety of food products, and on many other producer and consumer goods. As a result, Americans have a smaller range of choice and face higher prices than they would otherwise. It is unseemly in a free society for the government to tell its citizens how many foreign peanuts or sweaters they may buy. Where there aren’t quotas, there are tariffs, which are taxes designed to make foreign-made products artificially more expensive than the competition.

It is true that in recent years trade has been “liberalized.” That is the euphemism for somewhat freer trade, but it is not real free trade. The so called free-trade agreements fall far short of simply letting Americans buy whatever they want from whomever they want in any quantity they want. There are many exceptions and technical details that interfere with this basic freedom.

If we compare the role of domestic lobbyists versus foreign lobbyists, we will see that the foreign interests are more likely to be seeking a loosening or repeal of trade restrictions. In other words, foreigners are often on the side of the freedom of Americans to trade as they wish. Unlike American business lobbyists, the foreign businessmen will probably not seek trade restrictions. Their interest is in open access to American consumers. Thus, they have a harmony of interest with most Americans.

Take the case of China, which has been the center of controversy in the campaign finance investigation. Each year the U.S. government decides whether China will have “most favored nation” trade status. This term is a misnomer because MFN signifies “normal” trade relations between the United States and the country in question. Unfortunately, that does not mean free trade. It means only that the level of restriction will be no higher than it is for most other nations.

MFN status is obviously important to Chinese manufacturers, and no doubt they lobby each year to ensure that it will be conferred. By doing so, they are helping to keep the restrictions on Americans lower than they would be. In other words, when Chinese lobbyists fight trade restrictions in the United States, they are benefitting American consumers. How often do domestic business lobbyists do that?

Let’s be clear: trade restrictions violate the rights of Americans and lower their living standards. They should be repealed without waiting for other nations to embrace free trade. Even if the United States were the only free-trade nation, the American people would benefit. But we wouldn’t be the only free traders for long. Our example would quickly spread as other people saw how free trade makes us richer while making us free.

To the extent foreign lobbyists are fighting trade restrictions, they are a good influence and deserve no persecution.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.