Digging ourselves out of the current economic crisis will require more than injecting capital into banks, and more than overhauling the financial regulatory system. Both are necessary, to be sure, but we should take the opportunity to negotiate sustainable improvements to global trade regulations that would free the flow of not only goods, but human capital.
The current economic downturn has revived calls for economic protectionism, despite the proven benefits of global trade. The $787 billion economic stimulus bill signed by President Obama last week contains a "buy America" provision requiring federal stimulus money to favor domestic suppliers, regardless of their ability to provide the best products and services at a competitive price, and threatening to set off a chain reaction whereby countries across the globe pass similar protectionist regulations, thereby threatening our ability to do business in the global market.
Cooler heads prevailed, thankfully, and the provision was qualified with language such that the regulation be "applied in a manner consistent with United States obligations under international agreements." If there is ever a time to revert of economic isolationism, a global financial crisis is certainly not it.
Unfortunately, we still seem to be looking in the wrong direction in one area of global trade. The Wall Street Journal reported last weekend that the stimulus bill imposes disincentives for companies to hire foreign workers. This is a move in the wrong direction.
Instead of placing obstacles in the way of US firms hiring international workers, we should be using the incentive of increased numbers of H1-B visas to arrange agreements with other nations to ease restrictions on American workers coming to their countries, creating a smoother and more regular flow of people across the globe. Freeing the flow of human capital promises significant economic and national security advantages as well.
- Broadens the pool of available talent for struggling companies.
- Increases productivity by increasing competition for top jobs.
- Broadens the pool of economic opportunities available to American workers.
- Increases number of young workers in the US, reducing the strain of future entitlement spending as the native population ages.
National Security Advantages
- Increases number of foreign workers in the US, resulting in an increase in financial and cultural remittances to foreign countries and strengthening ties between the US and the world.
- Offers a rational solution to undocumented immigration from the South.
- Increased the number of Americans working abroad, creating bonds of friendship and cultural respect that improve America's image abroad.
These are but of few of the potential advantages for improving global economics and security. Global trade liberalization has seen millions of people across the world lifted out of poverty. It has resulted in better living conditions, and better health care across the world. But for too long we've focused solely on increasing the freedom of movement for goods, keeping the most valuable resource nations produce chained down.
It's time for the workers of the world to break their chains and move freely through the global marketplace, creating a more prosperous and secure world for all.