Free trade necessitates fair competition at home and abroad

Jack Kemp
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Posted: Oct 10, 2005 12:05 AM

In Washington, D.C., and capitals throughout the world, the positive force of market competition often becomes clouded by regional politics and short-term self-interests.

Unfortunately, this nation, the beacon of free-market capitalism, has not proved to be the exception to this ominous trend of late.

Despite having long fought for and won a number of trade accords to provide a fair playing field for our goods and services abroad, some U.S. leaders now seem content to selectively thwart international engagement here at home. At the same time that we ask our counterparts in Asia, Europe, the Americas and elsewhere to open their markets and government procurement programs, we cannot and should not deny them the same ability to compete within our own borders.
Yet under the guise of patriotic slogans or calls of U.S. industrial defeatism, overt political efforts are increasingly being mobilized to establish new protectionist barriers against foreign competition. The reality is that foreign and domestic industries have converged internationally to take advantage of an ever-expanding global marketplace. The competitive result can be viewed in terms of dramatic new innovations, increased productivity and lower costs. And the aggregate economic effect can be seen from Main Street to Wall Street through increased investment and more open global trade.

The pending competition to procure a new aerial refueling aircraft for the U.S. Air Force provides a case study that highlights this evolving dilemma. Despite some initial hurdles, procurement officials at the Pentagon are now emphasizing an acquisition program that will best meet its technological requirements while providing the greatest value to American taxpayers. As with the majority of the commercial jetliner industry, the competition falls between Boeing and Airbus, both international companies.

For several decades, these two rivals have directly competed for contracts around the globe, resulting in better, more diverse and affordable products, as well as increased sales opportunities. The positive byproducts of this healthy rivalry should be allowed to come forth through the current bid to fulfill the Air Force's next generation of aircraft refueling needs.

Many who now seek an upper hand for U.S.-based businesses argue that any potential selection of Airbus could cut domestic jobs and adversely affect our own industrial base.
The facts, however, paint a different picture. Both Boeing and Airbus are global organizations, building parts and components for aircraft throughout the world. About 43 percent of the components for Boeing's 787 aircraft are built outside of the United States. Airbus works with a number of international partners, as well. As author Tom Friedman points out, the world is rapidly "flattening."

In total, more than 50 percent of both Boeing and Airbus' planned manufacturing of aerial tankers would be performed within our borders. The playing field is level, from even the most ardent nationalist perspectives. As such, both sides should be allowed to develop the most competitive bids possible without any external or political influence.

Opponents of a free and open competitive bidding environment seem resolved to a defeatist and protectionist mentality. In contrast, I believe that competition brings out the best in U.S. enterprises and should be embraced. Global engagement has numerous risks but presents exponential opportunities for our domestic industries, employees, consumers and national well-being both today and tomorrow.

Free and fair trade must be a two-way street with clearly marked rules for the road. Our nation has learned that when one party does not abide by its own trade obligations, it undermines the profound economic and societal benefits for all. Members of both our political parties must reconcile that it is ultimately the best course of action for our nation to lead by example on this front.

I've always believed in free trade and open competition, and now that I'm on several multinational company boards and work as a consultant, I continue to believe, as I have for more than 2 1/2 decades of public service, in free trade and competitive bidding.

Free trade cannot and will not flourish globally when it remains politically expedient to disregard its principles here at home. While it may be good politics for a handful of individuals seeking short-term gain, it is most certainly bad policy for the nation and our continued standing in the world.