Free Trade vs. National Security

by Patrick J. Buchanan – May 26, 1998

A strict interpretation of patriotism [is] injurious to business,” wrote famed artillery maker Alfred Krupp. True to his word, Krupp sold to both sides in the Franco-Prussian war.
On the eve of World War I, Krupp’s firm was filling “Russian orders for the latest artillery pieces and French orders for specially designed anti-Zeppelin guns while soliciting British orders for warships. In the 1880s, Hiram Maxim sold the ‘Maxim gun,’ the first modern machine gun, to his adopted homeland of Britain and to its future enemies, the Boers of South Africa and the German Reich.”

So observes defense writer Andrew Moravcsik, making a point familiar to Americans who recall that arms peddlers sold the Plains Indians the Winchester rifles they used on the U.S. 7th Cavalry.

The irreconcilable conflict between free trade and national security is exposed anew by today’s blazing controversy over Loral Communications’ alleged transfer of missile technology to China.

Defending the use of China’s rockets to launch its satellites, Hughes Electronics argues that the waiver it received from President Clinton to do so was endorsed by 15 Republican members of Congress from California. Moreover, Hughes says, if U.S. satellite builders are not allowed to use low-cost Chinese rockets, European builders, which demand fewer protections for technology secrets, will do so and take satellite supremacy away from the United States.

Thus, the corporate interests of Hughes required that China achieve successful launches of Long March rockets — which just happen to be the twin brothers of the rockets China is fitting with nuclear warheads.

Hughes claims it never transferred technology to Beijing. Yet, it is undeniable that China’s military acquired invaluable experience in perfecting rockets by launching U.S. satellites. And according to the Washington Times, 13 of China’s 18 operational ICBMs are currently targeted on the United States.

Not only is free-trade fanaticism imperiling national security, but if it is not abandoned, it will eventually kill the Republican Party.

Americans may prattle on about a “strategic partnership,” but Beijing looks at America as the last impediment to seizing Taiwan and achieving hegemony in Asia. How can our free-trade zealots not see this? In China, we are dealing with a nation that has never embraced the nonsense of a Global Economy where the world is one huge and happy suburban mall.

Beijing does not practice free trade; it conducts “strategic trade” to strengthen itself for the coming clash. In China, there is no distinction between the private and the state. Thousands of Chinese companies — from hotels to toy factories — are run by the People’s Liberation Army. The PLA exploits its unrestricted access to the huge U.S. market to earn hard currency for the aggrandizement of state power. China’s civilian sector buys what strategic interests dictate, like those 46 supercomputers recently sold by the United States, the precise whereabouts of which we cannot confirm.

U.S. companies are lured into China by offers of access to the “world’s greatest market” and a low-wage labor force. Once there, the U.S. firms find that access to China’s consumers is restricted and the hidden price of low- wage Chinese labor is mandatory transfer of technology to Chinese “partners,” who copy the American machines and begin replicating our factories.

As the profits of many U.S. companies now depend on Chinese workers, who produce for export to America, these firms become apologists for Beijing and ferocious opponents of sanctions. When Congress considered sanctions on China in 1996 for persecuting dissidents, bullying Taiwan and selling missiles to Iran, our major defense contractors — Allied Signal, Boeing, GE, Hewlitt- Packard, Honeywell, Lockheed-Martin, McDonnell Douglas, TRW, Rockwell International, United Technologies — lobbied against sanctions.

The Business Roundtable has been hooked on the China trade, and its interests are no longer compatible with the national security.

As U.S. purchases of Chinese goods account for 7 percent of its gross domestic product, while China’s purchases of U.S. goods account for one-tenth of 1 percent of our GDP, we could snap China’s spine in six months.

How? Impose on Chinese goods the same 40 percent taxes and tariffs China imposes on U.S.-made goods. Instantly, China would either forfeit its U.S. market to free Asia or begin subsidizing, with tariff payments, our 7th Fleet.

The profits of U.S. companies in the China trade would shrink, and the Dow would take a hit, but the dragon would be on its keister.

Query: If China had the leverage over the United States that we have over China, would Beijing use it to force us to conform U.S. policy to its strategic objectives — or would it embrace free trade?