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French Pride, Thrift Test the Free Market
As originally written for the Los Angeles Times, November 1, 1991.





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MADRID – The Middle East peace negotiations here in Madrid are now dominating the local and British-satellite news programs. This is quite a refreshing break from the scenes of French farmers throwing raw meat that have aired almost continuously during the last two months.

Before Gorbachev, Bush, and the others arrived, big news in the European Community (EC) was the difficulties of economic unification, and in particular the bizarre protests of lamb producers in France. Mutton imported from the United Kingdom sells for about half the price at Paris meat counters as does the locally produced fare. So French farmers have been literally pitching their unsold wares at Parisian bureaucrats and policemen.

Throughout history the French agricultural lobby has been invincible. They've been able to derail the most recent GATT negotiations and even dodge last week's economic wedding vows of the EC and the EFTA countries (Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland).

Not even Orville Reddenbacher can sell his buttered popcorn in France. The popcorn itself isn't the problem, that's produced only in the United States. However, the dairy lobby and import regulations require that only French butter can be used.

But the chop chucking we've been seeing on the nightly news here in Europe really is the French farmer's final fling. Not even they can avoid the inevitable logic of free trade. Yes, they've got ammunition now, but that's because Parisian connoisseurs have been leaving French flanks on store shelves.

The growing pains of free trade are substantial and unavoidable. For example, the aforementioned British satellite TV broadcasts are an issue of concern on the Continent. Shepherds in Lyon, auto workers in Detroit, and even shipbuilders in Osaka have all suffered the consequences of cheap imports. Yes, the "quaint" French countryside will disappear as has small-town America. But consumers in Paris, Los Angeles, and Tokyo have all enjoyed the benefits of a more efficient, less impaired world trading system.

Indeed, that insight occurred to the EFTA and EC negotiators after they began to talk fourteen months ago. At the start, the EC's purpose was to limit membership applications. But now, despite their original goal, the twelve-member EC will actually be expanding to a nineteen-member European Economic Area encompassing 380 million consumers!

The stalled GATT negotiations have been an embarrassment to Carla Hills and the President. The Bush administration has overemphasized this top-down approach to world market deregulation. It's easy to see why. Elections are coming up fast and Americans by nature like to get everyone together and "hammer out" an agreement quickly. But in order to avoid flying French lamb or rocks thrown at Toyotas in Michigan, a piece-meal approach will work and in fact is working better. Unilateral negotiations can have an additive, even multiplicative effect. USA plus Canada plus Mexico, or the EC plus EFTA plus Eastern Europe, or Japan plus the ASEAN nations -- free trade is spreading like a winter cold in the Madrid Metro.

Many economists like Richard Drobnick at USC have predicted dire consequences of such "regional trading blocks." But there can be another outcome besides economic world wars. Let the Europeans and Asians harangue themselves while we settle our own North American spats. Once the British and Czechoslovakian meat producers (the latter will soon join the EC) disarm the French farmers, once imports from Thailand soften the market for Japanese home-grown rice, then new opportunities will emerge for a truly global free trade. Our leaders in Washington must anticipate such events and be prepared to seize the inevitable opportunities. Our trade representatives should be at this moment discussing and designing free trade agreements with their Tokyo and Brussels counterparts.

Indeed, much of the appeal of the democracy being embraced around the world today has to do with the associated fundamental freedom for consumers to buy what they want at the lowest possible prices.

Finally, back here in Madrid the peace negotiators seem to have forgotten that through trade, they have gotten along quite well historically. Talking only about trading real estate and not trading missiles is much too narrow a focus. In close by Toledo, the Church of Santa Maria La Blanca was long ago used for worship by all three religious groups of the time: Muslims on Fridays, Jews on Saturdays, and Christians on Sundays.

Related Articles

The Big Secret of World Peace
Journal of Commerce
(2/3/95)

French Pride, Thrist Test the Free Market
Los Angeles Times (11/1/91)

“The Road to a Sustainable Environment and a Safer World:
A Call for Global Glasnost”

By President Mikhail Gorbachev

In the Steppes of Asia, Bush's Spin on the Region
La Opinion
( 2-24-02)

Trade Brings Peace
University of California, Irvine

Not even Orville Reddenbacher can sell his buttered popcorn in France. The popcorn itself isn't the problem, that's produced only in the United States. However, the dairy lobby and import regulations require that only French butter can be used.

Indeed, much of the appeal of the democracy being embraced around the world today has to do with the associated fundamental freedom for consumers to buy what they want at the lowest possible prices.


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