On Thursday, I wrote about the present and future of the supply chain from the point of view of Craig Fuller, CEO of FreightWaves, a company dedicated to analyzing, reporting on, and improving the trucking and logistics industries.
In his analysis, Fuller mentions a concept for trade that he believes will supplant the free trade movement. He calls it “Freedom Trade,” and he believes that it’s a better way forward for the United States because it centers on “the idea that the rule of law, domestic free markets, human rights, and environmental standards are necessary for global prosperity and peace.”
Fuller begins his explanation of this new way of looking at trade with a history lesson. He talks about how America’s commitment to spreading capitalism benefited nations who also pledged themselves to free market economics. Other nations, even ones that didn’t exactly practice capitalism, have benefited from American free trade as well. The status of the United States as the world’s lone superpower and policeman in the first couple of decades after the Cold War ended made prosperity easier.
Fuller then contrasts the American view of economics with that of China. As China was developing, it flirted to an extent with free-market economics, but as its economy strengthened, China stayed closer to its communist, insular roots.
“But as China became wealthier, the American version of the free market became far less appealing to the Chinese Communist Party (CCP),” he writes. “The CCP wanted American free-market prosperity, but without offering the rule of law, domestic free markets, human rights, or environmental standards. The Chinese wanted to mooch off the free market but offer little in return.”
“The United States paid a massive price for allowing China to ‘have its cake and eat it too,’” he adds. “The American working class was hollowed out as jobs and production were outsourced to Chinese manufacturers.”
Moreover, China’s draconian lockdowns have exposed just how dependent we are on the communist nation.
Related: Will the Supply Chain Return to Normal Anytime Soon?
Our dependence on China for trade puts us at a disadvantage because we’re trading so much with a nation that not only doesn’t share our values but also actively acts to undermine them.
That’s where the concept of Freedom Trade comes in. Freedom Trade shifts the focus of our trading toward partners who share the American value of economic freedom.
“Freedom Trade demands that autocratic regimes stop trying to manipulate the markets in which they operate,” Fuller writes. “Otherwise, they artificially impact the supply chains that global businesses depend on and can cause great damage to the entire Freedom Trade system.”
On Wednesday, Fuller also wrote that such a shift in our trade policy can benefit the United States and other parts of the world.
“Latin America will become a big winner, as it benefits greatly from having direct land transportation networks with North America and seas that are well protected by the U.S. Navy,” he pointed out. “The American South and Midwest will also see an acceleration in manufacturing and production, as they can offer predictable and resilient sourcing, without the geopolitical risks of foreign suppliers or the labor unions of the Rust Belt.”
There are a lot of fascinating aspects to the concept of Freedom Trade. It has potential.
I’ve put in a request to interview Fuller to get more perspective on the idea. If he agrees, I’ll share more about this intriguing idea.
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