Has free trade been worth the huge costs, Mr Biden?
Financial Times | 15 December 2015
Has free trade been worth the huge costs, Mr Biden?
by Tom Groenfeldt
Dear Mr Biden, I appreciated — enjoyed is probably the wrong word — your letter to Americans about a disappearing middle class. I grew up in Bethlehem, Pennsylvania — about 75 miles south of Scranton. The Bethlehem Steel plant stretched for miles along the Lehigh river and employed 25,000 people. Now it stands empty, a victim of foreign competition as well as insular management and a bloated unionised workforce where new hires were taught how to walk very slowly.
I live now in Sturgeon Bay, Wisconsin, where a local shipyard, owned by Italy’s Fincantieri, employs hundreds of skilled and semi-skilled workers year-round. In the winter, when other jobs are scarce in this summer resort area, the shipyard has repair work on lakers, the 1,000ft bulk carriers that were built on the Great Lakes, many of them here. Their size protects them from foreign competition — they are too big for the locks on the St Lawrence Seaway.
The year-round work — such as tugs, ferries and service vessels for the Gulf of Mexico oilfields — are protected by the Jones Act, which requires that ships travelling between US ports be built in the US. No doubt they would be cheaper from South Korea or China, but that would wipe out many of these local jobs. The question you don’t raise, much less answer, is whether free trade has been worth the huge costs it has imposed on residents of cities such as Bethlehem, Gary, Detroit and Pittsburgh and a number of cities across Ohio. And if the costs have been too high, what’s the solution?
