A lot of people suffer from the misguided notion that free trade --completely free, unfettered, and untaxed trade --is the ultimate example of free enterprise and that we should strive for that ideal. They believe that market demand alone will guide the development of trade into an efficient and fair system.
The truth is international trade is not a cooperative global effort. It is the buying and selling between two or more countries, each with its own goals and interests. The extent to which nations trade with each other is carefully measured as each seeks to gain an advantage. International trade may not involve arms but the interests are as selfishly focused as they are in war. Of course, it is true that international trade can mutually benefit two or more countries simultaneously but, unchecked and unregulated, it can lead to the collapse of entire industries.
A well-documented example is how Japanese companies cooperated to destroy the American television manufacturers. Japanese industry organized itself to conquer the American television industry by close cooperation between Japanese companies and their government, illegal secret agreements, discipline, high quality products, product dumping on an immense scale, and using only Japanese suppliers. They destroyed the American TV industry by taking technology from RCA and others and selling televisions in America for less than it cost to manufacture them while forbidding the sale of American-made televisions in Japan. Although some may think this is an example of Japanese efficiency winning over American mismanagement, it is actually an example of unfair trade practices. And in this case, "free trade" led to the loss of thousands of jobs in the American TV industry.
The success enjoyed by Japan's automobile industry is another example of unfair trade practices. Although legally entitled to sell cars in Japan, American manufacturers are unable to make a profit due to the exclusive actions of Japanese conglomerates. At the same time, Japanese companies are offered lucrative terms to produce and sell cars in America. It appears that the goal of Japanese automobile producers is to put the American car industry out of business the same way they did the TV industry.
