Christmas is not made in the U.S.
Economy Talk
By Mark Thompson| Special Columnist
Monday, December 24, 2007

Because today is your last day to finish up your Christmas shopping, when you are out and about shopping for your crazy aunt who decided to show up at the last minute, buy something made in the U.S.

Many Americans want you to do what they consider patriotic, caring and in the best interest of U.S. companies.

Can this be done? Is it possible to buy U.S.-only products. If you are lucky, it might even be easy. Next year, do this for your family and friends. This will become even more difficult, especially when kids want certain electronics, toys or sporting goods that are imported.

Can the U.S. manufacture or produce these goods? Yes, but we might not have the comparative advantage in doing so. Therefore, it will cost you more.

Why stop there? Imagine this argument in a different way. If you are patriotic to Georgia, then only buy products that are made in Georgia. Your Christmas would be filled with pecans, peaches and golf carts. This is where Georgia has a comparative advantage with other states. We benefit by trading with neighboring states for goods that they have a comparative advantage with. The result is that we are better off by producing goods or services that we have a comparative advantage in and trading.

It is the same for countries.

Free trade is good for all of us. Even trade with China provides benefits to the U.S. economy. If you advocate buying only U.S. products, then you are harming the economy. China will just trade with other countries. We cannot stay idle and close our borders to trade.

We should strengthen trading relationships with China. The main issue that many cite as why we should not trade with China is the protection of intellectual property. This is very important and is in China's best interest to improve these safeguards because there are mutual gains for both economies.

Another issue is the loss of manufacturing jobs to China. U.S. businesses need to adapt and change to be competitive. China does some manufacturing better than we do, but we have comparative advantages over China in other products. Hence, we export those goods to China and import their goods.

Is this bad? No. China is having to compete with Pacific Rim countries in importing goods to the U.S. Competition is good for U.S. consumers in terms of quality and price. We all benefit.

The next time you are shopping, buy gifts without restricting your choice as to where they come from, although, I will admit I am looking forward to spiced pecans and glazed peaches this year.

Mark A. Thompson is the Cree-Walker professor of business administration at Augusta State University. He can be reached at mthompson@aug.edu.

From the Monday, December 24, 2007 edition of the Augusta Chronicle
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