During the Cold War, the United States adopted a national-security doctrine described as “peace through strength.” It worked well enough: Between 1945 and the fall of the Soviet Union, we managed to avoid World War III.
At a time of rapid globalization and international terrorism, perhaps we should try a variation on this theme: “peace through trade.”
As Gen. David H. Petraeus made clear this week, the most pressing problems in Iraq involve basic security for its citizens and the establishment of a stable government. Over the long term--when the current surge of U.S. troops is out of the newspapers and into the history books--much of that country’s fate will hinge upon its economic performance. We should take steps right now to guarantee its success.
Four years ago, President Bush proposed the Middle East Free Trade Agreement, which he wanted in place by 2013. As with so many grand ambitions, this one has fallen by the wayside. Yet certain aspects of it have become a reality: The United States has approved bilateral trade agreements with Bahrain, Israel, Jordan, Morocco, and Oman.
We would be wise to improve trade relations with Iraq, too. Before the war, Iraq was home to some 240 operating factories. Today, about 175 of them are open for business, though they aren’t necessarily working at full capacity. Unemployment estimates for the country range between 40 and 60 percent—that’s very high but it’s an improvement from a year ago.
The U.S. government is of course a huge player in the Iraqi economy. In the last year, our tax dollars have bought Iraqi goods and services worth $760 million. This is not foreign aid, but rather purchases that are necessary to support the troops as they try to defeat the insurgents and terrorists. There’s plenty of outright assistance, too: Several months ago, Congress approved $50 million for economic development, with most of the money going to projects around Baghdad or in the Kurdish north.
At some point, however, Iraq’s prosperity will depend upon its ability to compete in the world economy on an equal footing with other nations--and it will need to sell more than oil. Just as the troop surge appears to be showing some signs of success, there are glimmers of economic accomplishment as well.
Last month, Shelmar, a small chain of retail stores based in Tennessee, agreed to purchase clothing from Mosul Ready to Wear, a factory in Iraq. Shelmar hopes to have a couple thousand tracksuits and boys shirts on sale by October. It’s a test order, with more purchases in the offing if this initial batch of clothes moves off the racks.
The president of Shelmar is Mike Longo, an Army veteran. “We’ve got to get [Iraqis] back to work,” he told USA Today. “Otherwise, my buddies are going to keep getting ... blown up.”
That’s certainly a worthwhile motive, but Shelmar’s transaction wasn’t an act of charity, either. The company agreed to pay a sensible price for the clothes.
Iraqi officials appear to understand the importance of trade. “For the first time, our product produced in our country will be in American stores,” said Sami Al-Araji, the deputy prime minister of industry and minerals. “And if Iraq succeeds in this, it means Iraq will be able to capture a percentage of the American market for our products.”
Perhaps an eventual drawdown of U.S. troops can coincide with an up-tick in trade.
In order to make real gains in the American economy, of course, Iraq will have to compete with efficient textile manufacturers in Bangladesh, China, and Central America. It will also want to diversify.
Rugs are another area of opportunity. In recent weeks, American businesses have arranged to purchase more than 300 high-quality rugs from Iraqis. A single rug takes about six months to weave and probably will retail in the United States for more than $1,000.
It goes to show that we shouldn’t pull the rug out from underneath the Iraqis--we should purchase their rugs instead, at a fair price, for the benefit of both buyer and seller.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology.
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During the Cold War, the United States adopted a national-security doctrine described as “peace through strength.” It worked well enough: Between 1945 and the fall of the Soviet Union, we managed to avoid World War III.
