How the World Works

Free trade, but not for the flag

As of this year, all U.S. flags sold in Minnesota must be made-in-America. Break the law, and pay a $1000 fine and/or up to 90 days in jail.

The news value of this tidbit, courtesy of the Minneapolis Star Tribune, by way of Adam Minter's Shanghaiscrap blog (via The Wall Street Journal's China Journal), probably expired a few minutes after midnight, July 4th.

But I can't resist, because there are some compelling side angles.

As Minter points out, the Minnesota law was signed by Governor Tim Pawlenty, a politician much hyped as a potential Republican vice-presidential candidate.

Pawlenty is best regarded as an unabashed supporter of free and expanded trade between Minnesota and China. He's the architect and promoter of the innovative Minnesota-China Partnership. He's made two official visits to China (and attended two small, private receptions held in his honor by the Minnesota Club of Shanghai), and he's actively -- actively -- promoted the interests of US companies in Asia.

The vast majority of not-made-in-America flags are made in China. John McCain, incidentally, released a refurbished economic plan on Monday that includes one direct reference to the benefits of "free trade."

Export growth is the strongest part of our sluggish economy, and we should be encouraging the growth of even more jobs in this sector through more free trade agreements which give American firms more access to sell our goods and services abroad.

State laws prohibiting the sale of specific items based on their country of manufacture are likely violations of the United States' commitments under the rules of the World Trade Organization. China could probably file a trade complaint, if it so desired, though one guesses that annual exports of five million dollars or so of American flags aren't big enough fish to fry.

But how the World Works would still love to hear some straight talk from McCain on the subject. When exactly, are restraints on trade OK -- when they're colored in red, white and blue?

Posted in: China

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A conversation about globalization.

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Is the Obama economic rescue plan a failure?
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