So many of our protectionist brethren focus on the negative side of free trade. The negative side is that when there is competition, jobs tend to go to the nations which provide the best environment for business. They seem to think that America qualifies, but that’s simply not true. America hasn’t had to compete on a global scale until recently, because we had an enormous internal market, and the cost and time of shipping goods worldwide made it unfeasible to outsource all but the most low-skill jobs.

But you add in a little competition, as Cato@Liberty points out, and we find ourselves getting upstaged by the French:

It is always easy to make fun of the French for their hopeless infatuation with redistribution, intervention, and other statist policies. So it is rather embarrassing that France (33 percent) currently has a significantly lower corporate tax rate than the United States (about 40 percent, if state taxes are included). Imagine, then, how humiliating it will be if Nicolas Sarkozy wins the French presidency and follows through on his proposal to lower France’s corporate rate to 25 percent. To be sure, the impetus for a lower corporate rate is tax competition rather than a new-found appreciation for market forces.

You see, global competition can force us to get the government out of our lives. While that’s a bad thing to the leftist protectionists, pointing it out to the right-wing protectionists might just make a point. With America surrounded by two oceans, for most of our history we could only conveniently outsource to Canada and Mexico, and thus we found ourselves with one of the highest corporate tax rates in the developed world. France, a country known for its propensity to tax it’s way out of (and then into) all sorts of problems, is finding that they have to reduce taxes to compete. Could not we do the same?

American taxation, and our regulatory burden, have only been made possible by the fact that we were insulated from competition. We’re no longer insulated from competition, and that may force us to reduce the impact that government has on our lives in order to compete. If even France! can learn their lesson, I’m sure we can too.