Let's get real in trade talks

The Boston Globe ^ | July 29, 2006 | Robert Kuttner

[A. Pole]

[...]

The current round of trade talks was launched in 2001 at Doha, Qatar, an authoritarian location conveniently off- limits to protesters.

[...]

The trade agenda has been set by business elites who would impose one economic model on the world -- the model of laissez-faire. This model rejects more than a century of Western history, during which democracies have relied on government regulation and social investment to temper the instability and income extremes of a pure market economy. The elite model would also coerce Third World countries to give up their successful development strategies, in which government helps local business develop new technologies and markets, and fledgling economies are sheltered from foreign speculation.

To the extent that Third World countries have already given in to US pressures, results have often been disastrous. East Asia's economic meltdown of 1998 was largely caused by too abrupt an opening of local financial markets. Speculative capital poured in, overheating local economies; then, when the winds shifted, it poured right out, sinking economies that were otherwise sound. Much the same thing happened to Mexico.

Current trade rules make it too easy for global business to deny workers in both poor and rich countries the fair fruits of their labors, despite rising productivity. US multinationals outsource in search of cheaper labor. China runs a huge trade surplus, in part by denying its workers fundamental rights and decent wages. This puts downward pressure on wages in the United States, Europe, even Mexico.

[...]

It embarrasses free-trade ideologues that the most successful emerging economies like Japan, Korea, and more recently Brazil, India, and China, have generated their own domestic savings and entrepreneurs, and have not relied much on foreign investors. This has both produced high rates of growth, and insulated them from imported instability.

[...]

[1rudeboy]

Here is an interesting artical from the July 20 National Review, "Foreign Direct Investment: Under Assault ". No mention of foreign purchases of U.S. government debt. Why would that be?

[Toddsterpatriot]

I think raybbr is confusing foreign governments (China, Japan) buying our Treasury Bills (which he feels is evil, for some reason) with foreign companies building factories here (which, I think, he also feels is evil) which employs Americans.

If we ask, maybe he'll tell us why either of these is bad for America.

[Toddsterpatriot]

From your Economist link:

FOREIGN DIRECT INVESTMENT

Investing directly in production in another country, either by buying a company there or establishing new operations of an existing business.

I don't see how buying bonds fits into that definition.

[raybbr]

Like I said - the BEA is using the words 'direct investment' in their report.

[1rudeboy]

You know, not too long ago, He Who Should Not Be Named was arguing that high levels of FDI are a sign of weakness. On this thread, some people are arguing that we have no FDI at all, and the only "I" is debt-purchases. I suppose things change.

[1rudeboy]

And like I said, you don't know what "foreign direct investment" means.

[Toddsterpatriot]

Like I said - the BEA is using the words 'direct investment' in their report.

LOL! Because Direct Investment is part of U.S. net international investment.

[Toddsterpatriot]

You know, not too long ago, He Who Should Not Be Named was arguing that high levels of FDI are a sign of weakness.

Did HWSNBN change his position? I remember him blaming Bush for FDI dropping. Although HWSNBN taking both sides of an argument (even in the same thread) wasn't unusual. It was easy for him because he so rarely understood the issues he was discussing.

[1rudeboy]

Contained herein is what the BEA has to say about FDI. If you find where the term involves purchase of U.S. government debt, please point it out. I didn't see it.

[hedgetrimmer]

OPIC is a self-funding agency.

LOLOLOL! So is the post office. So are price supports for sugar.

[hedgetrimmer]

OECD and Economist? Quoting the left wing and internationalists?

[1rudeboy]

I've got a song ain't got no melody,
I'm a gonna' sing it to my friends.
(2x)

We go 'round in circles,
We fly high like a bird up in the sky.
(2x)

--Billy Preston [RIP, Billy]

[1rudeboy]

I've provided definitions from at least four agencies/ organizations concerning an Economics term of art. You can't even get the term "working group" straight, so I thought I'd provide as many as I could.

[1rudeboy]

Thanks for helping correct Dakota.

[1rudeboy]

BTW, how are price supports for sugar self-funding? What is there to be funded in the first place? You could argue that a petty theft is self-funding.

[hedgetrimmer]

You could argue that OPIC is self funding through grand larceny and graft.

[Toddsterpatriot]

Now that we've shown that raybbr's original assertion, "We have very little foreign investment in the U.S. other than they're buying our bonds", do you think he had a point?

I mean other than, foreigners = bad?

[1rudeboy]

I'd like to see you try, but I won't hold my breath.

[1rudeboy]

Last time I checked, I think he's still arguing that there is no significant FDI in the U.S., and that his unique, one-time only definition of FDI includes foreign investment in U.S. government debt.