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IBD: Free trade would save Caterpillar jobs

RealClearMarkets posts an Investors Business Daily commentary encouraging lawmakers to break eliminate trade barriers with Colombia, and everywhere else for that matter.

Economist Dan Griswold, director of the Center for Trade Policy Studies at the Cato Institute, found exports were responsible for 6,667 new U.S. jobs at Caterpillar alone.

“Caterpillar is in many ways a typical American company,” Griswold told IBD. “It sells more abroad (63% of sales) than here, and it’s increasingly a global company. The success of its U.S. workers and shareholders is determined by its success abroad. That depends on free trade, freedom of investment, and strong relations with its commercial partners.”

Without free trade, Caterpillar is stuck paying around $100,000 in tariffs for each earthmover it sells to Colombia, a big mining country that’s one of Caterpillar’s best markets.

The article notes that trade unions in Colombia wants the government to reduce the tariffs so their employers will buy more Cat equipment.

Cat’s already sounding the alarm against “buy American” provisions in the stimulus package, which might sound odd coming from a U.S.-based company, but the Cat brass are more concerned about the blowback from trade barriers. If we put anti-trade rules in our stimulus bills, so will everybody else.

This is precisely what happened in the Great Depression: laws designed to protect jobs killed them by discouraging trade.

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Tom Mangan posted at 9:13 am January 27th, 2009 |

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