Tuesday, September 11, 2007

Supply-siders and the Mexican truck debate

Last week Mexican trucks began rolling across the U.S. border in a program authorized by the Dept. of Transportation, and this came in spite of the opposition of an eclectic coalition of Teamsters, environmentalists, and national sovereignty advocates. According to a recent NewsMax article, "Canadian trucks have free passage throughout the U.S. but the DOT has never certified Mexican trucks, until now, in response to a 2000 demand from a NAFTA tribunal which upheld Mexican complaints."

Jerome Corsi, author of our NYT bestseller The Late Great U.S.A.: The Coming Merger with Mexico and Canada, told NewsMax: "The White House lobbied the Senate Transportation Committee to not hold hearings on the Senate version of the bill."Corsi went on to add:

The DEA constantly finds Mexican trucks smuggling drugs, human beings and who knows what kind of contraband. There is massive organized criminal smuggling activity going on at the border. If al-Qaida gets into this mix, we will have a nightmare. You could have nuclear weapons, dirty bombs or terrorists in those trucks, and no one would ever know.

Since today is Sept. 11, I will simply note that Corsi raises a valid concern. The abdication of sovereignty to a North American Union (NAU) that he discusses in his book is indeed a massive security risk.

But rather than dwell on the national security implications of this issue, I'm going to shift gears and briefly comment on the economics. It seems like the specific issues surrounding the NAU debate such as Mexican trucks are often being framed as an argument between pro-growth supply-siders (who support free trade) and paleo-conservatives (who favor protecting domestic industries). This strikes me as the wrong way to think about the issue. In my opinion, the entire conservative movement ought to be of a single mind on issues relating to the NAU and it has little to do with trade policy.

Being pro-growth doesn't mean mean being pro-NAU. As a supply-sider myself, I support free trade for the simple reason that tariffs are a tax on our own consumers. They also lead to a misallocation of resources by effectively subsidizing inefficient industries. But there is no reason that national sovereignty needs to be thrown away for the sake of lowering tariffs. America can lower its trade barriers through bilateral and multilateral negotiations (and, heck, unilaterally if we want to!) without the oversight of any super-national entity.

In fact, any such regulatory body would surely undermine the free trade benefits that came along with it. If you build a super-state and stock it with bureaucrats whose job is to regulate, they will regulate! Look at Brussels. The net effect is a less free, less productive economy. So in a sense the debate over Mexican trucks seems to me to be a proxy for a far more monumental issue: the question of whether Washington (like Europe before it) is gradually ceding sovereignty to a patchwork of regulatory bodies that could some day morph into an NAU. And on this issue, conservatives of all flavors should be in agreement.

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