The high cost of free trade

The Des Moines Register ^ | 11/16/2003 | REKHA BASU

[Willie Green]

Tomorrow marks 10 years since the North American Free Trade Agreement got a green light in the U.S. House, after the first President Bush and Bill Clinton pitched it as the answer to most of our problems.

We were told that removing trade barriers between Mexico, the United States and Canada meant more American goods would find more markets. Along the way, Americans would find more competitive prices and Mexican workers would find a higher standard of living so they'd be less driven to cross the border unlawfully.

[Clemenza]

More nostalgia for "smokestack America" from the great Willie Green.

Willie, let's agree that the US acts like Chumps (capital C intentional) when in trade negotiations with China. However, it should be pointed out that industrial jobs are decreasing ALL OVER THE WORLD in places as diverse as the US, Brazil and the Czech Republic. Technological innovation has been a key factor behind this, albeit not the only factor.

[RiflemanSharpe]

The one question I ask any free traitor about Nafta is where are the good paying jobs we we promise would come from this. I have yet to see them, in fact I have seen the exact opposite. Good jobs this country needs dearly are leaving in droves.

[alex]

There are serious issues with Free Trade and whether we have to continue it the way it goes, but the last thing to do is to turn for advise to various pinhead pinkos.

"Holland says that happened in one region of Bolivia, after water was privatized. Costs doubled in months."

[xzins]

Free trade and not free trade.

I don't believe that these things just happen. I think they have a whole book of rules that go along with them about "how free trade is to be practiced."

It only makes sense to me to keep track of those rules and monitor whether they give unfair/unfree advantages to one or more parties to the agreement. If they do, those rules should be changed.

Now, I've always felt that going to little carnivals was an OK thing. They have a few rides a few booths, and they charge a certain amount.

But when I go to DisneyWorld I expect to be charged an admission price because they have a premium operation going on behind their walls. There is a far better ride and show program in their operation than one can find at any independent carnival. Vendors pay a premium to sell within Disneyworld and customers pay a premium to get in.

I think that the American business environ is like Disneyworld. Within our walls we have a premium operation going on. If any outsider wants to get in, and they're required to pay an upfront fee to play, then I won't weep any tears for them. They're getting a bargain in any case.

[Voltage]

At the very least, any new treaty must include enforceable labor and environmental standards.

And I thought leftists were against us bossing other countries around.

[BMiles2112]

Some U.S. companies that moved to Mexico are moving on to China, where the $98-per-month average wage is less than a third of Mexican ones.
Mexican corn growers have been driven out of farming as government-subsidized American corn has flooded the Mexican market, causing even more to emigrate.
The first is a result of the cheap labor available in China, the second is a result of US farm subsidies. Neither is a result of NAFTA.

Corporations could even outbid local governments for control of public-sector services such as water, utilities, transportation or health care. There's a risk that once profit-making was introduced, quality would suffer and prices go up. Holland says that happened in one region of Bolivia, after water was privatized. Costs doubled in months.
Well, it happened once in some unnamed location in Bolivia, well then it must be the inevitable result of privatizing industries. Seriously, an article that promotes the idea that governmental control is preferable to control by a business, (which would be accounatable to customers), has no business being posted without a "BARF ALERT".

[Clemenza]

I benefitted from open markets. I worked in International Finance for three years and loved it.

[citizenK]

Seriously, an article that promotes the idea that governmental control is preferable to control by a business, (which would be accounatable to customers), has no business being posted without a "BARF ALERT".

Absolutely correct here.
The problem with the free trade debate is that the economy, and the international economy in particular, is incredibly complex. Even the most dedicated scholars in the field are hard pressed to quantify, analyze, and summarize the overall benefits and detractions of free trade. That is why ideology and particular philosophies are important to the debate. While detractions exist within the free trade paradigm, the alternative - government control - is far more detrimental to economic growth and the provision of opportunity for people around the world. It's just too easy for the people who "don't see the jobs" or "see the jobs leaving" to buy into the leftist claptrap and clamor for more government intrusion into the economy and our lives.

[the_devils_advocate_666]

Says Steve Dobbins, president of thread maker Carolina Mills: "We want clean air, clear water, good living conditions, the best health care in the world--yet we aren't willing to pay for anything manufactured under those restrictions."

[sixmil]

Tariff-free traders believe that a 5% tax on imports has a bigger negative effect on the economy than a 5% national sales tax. Not only does that make no sense, it also moves the burden of collecting taxes from the public sector to the private sector. It is obvious that the unilateral free traders will never admit they are/were wrong, so they must be crushed at the voting booth.

[citizenK]

What's the connection between tariffs and a national sales tax? Maybe some make this argument, but it's not really dominant in the free trade debate.

A 5% tariff would be fine, if it were truly an across the board rate. Unfortunately, tariffs are used for protectionism. Protectionism is bad enough because it effectively subsidizes the few at the expense of the many, and leads to a weakened competitive position for domestic companies. However, tariffs are too convenient a tool of politicians to garner the favor of select campaign contributors. IOW, tariff structures are too easily corruptable, especially in our type of representatitve government and the with the type of politicians our nation produces. When tariffs are not across the board, the process of maintaining a tariff system becomes corrupt and becomes a back-door to government intervention in the economy and socialism.

[Gargantua]

Yeah, that NAFTA, GATT, and Permanent MFN Trading Status for Communist Red China have really done wonders for our economy, our employment rates, the standards of living in Mexico and China, our Trade Deficit, and our manufacturing base.

Perot was dead right... as the results of these Trade Deals are now in... but, amazingly, there are still those here on FreeRepublic who refuse to admit that this is the brick which has for years been slamming them in the face.

There are none so blind as those who simply refuse to see...

;-/

[sixmil]

What's the connection between tariffs and a national sales tax? Maybe some make this argument, but it's not really dominant in the free trade debate.

There is no connection, it could be any tax, but it is a common tax mentioned around here when talking about getting rid of the income tax.

Protectionism is bad enough because it effectively subsidizes the few at the expense of the many, and leads to a weakened competitive position for domestic companies.

I believe the opposite here.

However, tariffs are too convenient a tool of politicians to garner the favor of select campaign contributors. IOW, tariff structures are too easily corruptable, especially in our type of representatitve government and the with the type of politicians our nation produces.

To the degree this is true, it is exponentially true of the income tax, which has become the replacement for tariffs.

When tariffs are not across the board, the process of maintaining a tariff system becomes corrupt and becomes a back-door to government intervention in the economy and socialism.

You could insert any tax into this statement, and it would be true.

[TaxRelief]

While detractions exist within the free trade paradigm, the alternative - government control - is far more detrimental to economic growth

If people would just keep this fundamental principle in mind, then we would be able to make a little progress towards improving trade relations to the benefit of both parties.