America Needs to Lose Trade 'Virginity'

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The recent United Steel Workers-led tire trade case vs. China has provoked an outcry of protectionism not only from the global court of public opinion, but from many on our own shores as well. Americans rightly believe that free trade is our birthright, and that comparative advantage is the bedrock of free trade.

It's our view that America is the world's last remaining "trade virgin." As a nation we are so completely and blissfully unaware of the protectionist behavior of many of our trading partners that we actually rush in to apologize when some of us stand up and say "ouch" -- because we truly just don't know any better.

We believe that it's time for America to lose its trade virginity and wake up to the fact that for many in the rest of the world, comparative advantage has been abandoned in favor of mercantilism, favoritism and pure horse-trading. We cannot possibly play the free-trade game fairly all by ourselves.

In my nearly 30 years as an equity analyst covering the steel sector, most of those for a large global investment bank, Salomon Brothers in New York, I've seen that the steel trade outside of America is often managed trade and is anything but free. Americans aren't told this though. Our public opinion is driven both by academics -- wedded to theory over proven empirical facts or worse -- as well as the vested interests in this country who know better but make their living by looking the other way.