Greenspan, addressing the World Affairs Council of Dallas, acknowledged that "in recent years, competition from abroad has risen to a point at which our lowest-skilled workers are being priced out of the global labor market."

But the answer, he said, is education and retraining, not protectionism or adopting the position of anti-globalization forces that favor "employing the power of the state to override the outcomes arrived at through voluntary exchange."

Greenspan did not give specific examples, but President Bush last week lifted steel tariffs he had instituted in March 2002. The nation's huge trade deficit and weakness in the job market also are expected to be hot election-year issues in 2004.

As the chief architect of U.S. monetary policy since 1987, Greenspan carries authority that has led some to describe him as the second-most powerful person in the country. But that didn't make his message any easier for Debbie Sullivan to hear.

Sullivan, chief financial officer of cardboard box maker Bates Container of North Richland Hills, Texas, was among about 1,500 people to hear Greenspan's pitch for free trade.

"Manufacturing is going overseas," she said after Greenspan's speech.

"When manufacturing leaves the U.S., the need for corrugated boxes diminishes. Nothing has really replaced that demand.

"It's a serious issue for our industry," she said.

Greenspan said the creation of new jobs and the destruction of old ones, while stressful, leads to higher productivity and higher living standards.

"One would be hard pressed to cite examples of free and prosperous societies that suppressed the marketplace," he said.

Greenspan also questioned the wisdom of forcing China to raise the value of its currency. American manufacturers have complained that China has kept its currency artificially low, which makes its exports more competitive in world markets.

He said a rise in China's currency "would be unlikely to have much, if any, effect on aggregate employment in the United States, but a misaligned Chinese currency could have adverse effects on the global financial market and hence indirectly on U.S. output and jobs."

Brad Lummis, a Fort Worth investment adviser who attended the speech, said with Greenspan expressing such a view, "it doesn't sound like there will be any intervention in the currency markets."

Frank Vargo, vice president for international affairs at the National Association of Manufacturers, told The Associated Press that American manufacturers are convinced that a stronger Chinese currency would help narrow the U.S. trade deficit and save manufacturing jobs.

"Everybody knows that China's currency is undervalued, and it is having a definite impact on American manufacturing," Vargo said.

Sullivan said a trade group representing the corrugated-box industry is scheduled to visit China this month.