How Restrictions on Chinese government IT Products can Support Free Trade

In September, the James Madison Institute – Florida’s top think tank – hosted their annual Tech Summit in Miami. Dr. Roslyn Layton was accompanied by Georgia Rep. Martin Momtahan, and Florida Rep. Randy Fine discussed Chinese government intrusion in US state legislatures. The panelists were asked how to square free trade with restrictions on imports.  

Representatives Fine and Momtahan acknowledged that free trade requires accountability and protection of properties rights.

Florida Representative Randy Fine, a former Harvard economics professor, described the notion of externality, the unintended consequences of economic activity, and how markets address this problem through pricing. However malign Chinese government IT products are not priced to reflect the consequences they present to security. Rep Fine observed,

“Trade means I buy something from you or I sell it to you. If you can just steal it, there is no free trade. And China today does not respect private property rights. They literally just go and steal our intellectual property. Without that, you don’t have it. The second thing is you have to price those externalities (national security), the cost of being reliant for the key ingredients that drive an economy from another country, we don’t price that either into our markets.”

MIAMI, FLA.9/15/22-During the James Madison Institute’s Florida Tech & Innovation Summit 2022.COLIN HACKLEY PHOTO

Georgia Rep. Martin Momtahan, sponsor of the Georgia bill which Gov. Kemp signed into law (Senate Bill 346) explained its role “to hold Chinese government accountable for their actions, and for what I feel is a fraudulent theft, both corporate and governmental information. We just need to keep them accountable… but we got to make sure that American interests are also held up on their side of the bargain.”  The Georgia law prohibits state government purchase of information technology products and services from Chinese government owned entities.

States are starting to take notice and building some momentum in order to protect their most sensitive assets. Both Georgia and Florida have passed legislation in protecting their systems from Chinese intrusion.

The representatives concluded that where there is rule of law, property rights, and transparent pricing, free trade will flourish.

You can watch Rep. Fine and Momtahan’s videos here: