Free Trade Solution to Balancing Trade

Export Coupons:

by
Clifford W. Lazar

Unbalanced Trade is Everyone's Problem
America's trade is unbalanced, and the results are lost jobs, higher prices of imports, and transfer of ownership of real estate and American corporations to foreign peoples and companies.

Eventually this transfer of wealth from Americans to others will be translated to a loss of political power and control over our own destinies. This transfer needs to be stopped.

Every import, while it may have immediate benefits in saving money for a consumer or a manufacturer, hurts America and Americans, if it is not part of balanced trade.

Balanced Trade Benefits All Peoples
Balanced trade spurs economic efficiency and is good for people of all nations and it should be America's policy to promote balanced trade.

A solution to balanced trade should be easy to understand, simple to apply, not generate undesired domestic effects, and not lead to international retaliation.

At its best, a solution to balanced trade would be ideal if all nations could adopt the same policy.

When some propose that America become as projectionist as Japan or Brazil, respected economists fear such protectionism by America could lead to a world-wide depression. Americans should oppose protectionism. We believe in free trade. But we believe that trade should be free for both sides.

Let America then consider a simple, easy-to-apply solution to our balance of trade that all nations could implement equally. At the same time, if we apply it unilaterally, it would not lead to international retaliation. It would, in fact, lead our domestic companies and our international trading partners, with the worst imbalances, to help us balance our trade.

Imports Should Correct Exports
Imports should balance exports. Imports, if excessive, should subsidize exports to prevent them from getting out of line.

America should award exporters 1.2 coupons for each dollar they export and require that every dollar of imports be matched with 1.0 coupons. Thus, when a New Hampshire farmer sells $10,000 worth of maple syrup to France, he will receive 12,000 export coupons that he can later sell or trade. When Toyota wants to ship a $10,000 car to the United States it must deliver 10,000 coupons to US Customs. It will have to buy the coupons from the New Hampshire farmer or a Minnesota computer company or a California rice grower.

Because there will be a 20% surplus of the coupons there will not be a shortage that will promote price gouging. At the same time the exporters will receive additional revenue and the imports will cost slightly more until the US dollar regained its strength. Which it would.

If, however, trade becomes unbalanced and imports exceed exports then the coupons will become expensive and the higher prices will automatically correct the imbalance.

I suggest that in the first year each dollar of exports receive the coupons but imports not require coupons for four months to allow a buildup of coupons so that there wouldn't be artificial shortages.

The coupons could be traded on the world's great mercantile exchanges, so that smooth, nearly perfect free markets would be created for the coupons.

Companies that both export and import and international trade brokers could stock the coupons to facilitate their trade transactions.

Major importers, such as oil companies, consumer electronics companies and auto importers would voluntarily look for opportunities to export American goods. They would utilize their agents overseas to seek opportunities for American exports including American sub-assemblies, American food stuffs, and use of American shipping services.

Japanese auto makers would use their political power to open Japanese consumer and government markets to American goods in order to secure export coupons. The Japanese would even look in other countries to help American companies export.

At the same time, because the export coupons are freely traded, any trade item can subsidize any other. This would enhance market efficiency and free trade.

If other nations adopted the export coupon policy, then coupons could be traded between nations, when imbalances existed, thus tending to balance all of international trade. By promoting such a program we would become the benefactor of the lesser developed countries that suffer from severe chronic trade imbalances. It would be a reversal of our role as a colonialist nation and would reduce requirements for foreign aid.

Export coupons is a free enterprise, free trade way, to balance trade.

We have to get trade in balance before all American corporations, the tall office buildings in our major cities and all of the fertile farms on our vast prairie lands are owned by overseas landlords and before America becomes the colony of our projectionist trade partners.

Export coupons would be good for America, and we should welcome other nations adopting the same policy.

Export coupons are fair. They are simple, and they would solve the balance of trade problem.

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