Free Trade FAQ's

The Center for Trade Policy Studies ^ | Unknown | Unknown

[GraniteStateConservative]

Laz,
You forgot:

James Madison, Speaker of the House before becoming the 4th President, led the efforts to pass the Tariff Act of 1789. American production of cloth--cut two-thirds by British dumping in 1816--grew an astonishing 1,650 percent within four years of Madison's tariff becoming law.

"The prohibiting duties we lay on all articles of foreign manufacture which prudence requires us to establish at home, with the patriotic determination of every good citizen to use no foreign article which can be made within ourselves without regard to difference of price, secures us against a relapse into foreign dependency." --Thomas Jefferson to Jean Baptiste Say, 1815.

"...[E]xperience has now taught me that manufactures are now as necessary to our independence as to our comfort..." Thomas Jefferson, 1816

And Monroe signed Henry Clay's Tariff Act of 1824 into law.

[MonroeDNA]

Are you good enough at what you do to compete worldwide? I am.

Then again, I am an American man.

[MonroeDNA]

Real men don't whine.

[GraniteStateConservative]

So, it's whining to say that our government should do what it says it will do in the Preamble to the Constitution? Okay, whatever.

[Lazamataz]

Real men don't whine.

No, but Real Men sure do impose tariffs!

[cp124]

Free trade is a boon to the US manufacturing base, which is alive and thriving according to statistical evidence. Now thats funny or just plane bs.

[thtr]

Free Trade FAQ’s:
Is night really day?
Yes, night is really day.
Is up really down?
Yes, up is really down.
Is wrong really right?
Yes, wrong is really right.

[thtr]

So many lies - Just some from the first section…

“wherever globalization has taken hold, there has been a measurable improvement in incomes and working conditions” Like Thailand, Cambodia, Columbia, Venezuela….

” Western businesses know that treating workers poorly is bad for business back home” I guess firing American workers and replacing them with cheap foreign labor does not count as “treating workers poorly”

” American consumers demand that US companies respect worker rights, and US companies producing abroad pressure their local suppliers to do the same-a truly virtuous cycle” Oh yes, those women and children in the Vietnam sweatshops have American corporations looking out for their benefit.

[harpseal]

How to fix what is wrong when one is done with teh lies.

In no particular order of importance.

1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.

2. Use tariffs on those nations which are engaged in unfair trade practices such as currency manipulation (China and India for example), those nations which refuse to open their markets to US products (China for example with its 50% tariffs on US consumer goods and non tariff barriers), those nations that subsidize competition to American Industry (airbus for example) and those nations which have slave conditions for their workers.

3. Use tariffs and other means to prevent the relocation of jobs offshore that are essential to the national defense. If necessary take control of the company seeking to export vital technology or industry by means of eminent domain (No I do not like this last option and I will only defend its use as an absolute last resort like say in the case of rare earth magnets essential to smart bomb technology). Provide a hardened, widely distributed infrastructure to supply all that is needed for our military units and civil defense that can be continued to be deployed in the event of any military attack.

4. An immediate end to guest worker programs. If people wish to come to the USA to work and make a life let them immigrate according to the rules.

5 Provide economic development zones where the corporate income tax is zero for operations within these zones. In order to operate in this zone a company must agree to only purchase American components if available and employ only American citizens or legal immigrants in these operations. These economic development zones shall be eventually be expanded to include every bit of every state once the benefits are shown I would like them to be totally implemented immediately but I realize4 that may be overreaching.

6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.

7. Increase the domestic content in purchases by the Department of defense and give absolute preference in non-domestic content to proven allies of the USA over say the French or Germans. The only reason any content for DOD purchase may come from non US allies is that content is not available elsewhere and is essential.

8. Do not allow expense involved in moving operations overseas to be included in business expenses under the IRS code.

9. Prosecute for perjury anyone who has made a false statement in order to employ an H1B or L1 visa worker. I will be lenient on the actual perjurer if he/she was ordered to make this false statement and he/she provides testimony to aid in the conviction of the person ordering the perjury. Just because a person is a CEO does not give them a pass on criminal behavior.

10. Prosecute anyone who orders the transfer of vital defense technology or funds a R&D project that could be of use to our military overseas except to strong allies of the USA. Make the necessary enhancements to our espionage laws so that continued support or funding of any R&D in a nation whose government has threatened the USA is guilty of espionage. The UK and Australia come to mind as meeting these criteria for being eligible for transfer of technology first. There will be other nations and a gradation of what can be transferred to which specific nation. Under no circumstances may technology be transferred to any nation whose government has threatened the USA within five years without a complete change of government or specific exemption from Congress and the administration.

11. Deport all illegal aliens immediately and take measures that prevent the entry of any more illegal aliens. Fine all companies knowingly employing illegal aliens Criminal sanctions should be imposed on anyone helping an illegal alien stay in the USA in violation of our laws.

12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends. See effects of item 5 for how minimal this will be if item 5 covers the entire USA. Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.

13. Eliminate the minimum wage so that the worker can be paid based on productivity. Overtime compensation will remain the same but instead of 150% of the "wage" the worker would receive 150% of the production pay. If one through 13 are enacted # 14 becomes an irrelevancy as no one will be working for that low a wage

You will note that I have added the proposed change I flagged you about on the other thread as there will be no further changes without agreement.

[harpseal]

Ask your grandfather, or if he is not alive, ask for advice. What would he say about "fair trade?" Or protectionism?

Given it is 2003 Most gradfathers would have said of course we need tariffs. The first protective tariff law wa spassed inb 1789 as teh second act of the first Congress. Thomas Jefferson was proud that tariffs balanced his budget and supported tariffs that encvouage the developmentof industry. A point a got from free Trade advocate who was actually knowledgeable about history is that in 1789 wages in England were higher than in the USA. A scant thirty years later Wages in teh USA were higher than in England. His history was just a little flawed because he was thinking there were no protective tariffs in place.

[harpseal]

Now it is late on teh East Coast and I am really tired after several hours of dealing with a problem I do have to deal with right now but if you would like maybe sometime tommorrow I can go point by opoint on any arguments posted above and show flaws. At least I can for those I have read fully.

[secretagent]

Three proposals of yours that a true free trader would support:

1. Get rid of government subsidies for offshore investment of US companies. OPIC is the first such program which should go but support of World Bank programs that subsidize the outflow of Capital would be another.

6. Scale back unnecessary regulation including the tort system. Institute a cap on punitive damages, limits on class action suits, and limits on liability to the actual percentage of liability with no plaintiff able to collect if said plaintiff was involved in the commission of a felony at the time of the alleged tort or was more than 49% negligent in the alleged tort. Note that the loser in a frivolous lawsuit shall pay the attorney fees of the winner. There are many other regulatory structures that also need to be included that need to be included such as repealing the Family leave mandate, getting rid of OSHA etc.

12. Decrease the punishing levels of taxation on companies and eliminate the double taxation on corporate dividends.(snip)... Eliminate all IRS provisions that inhibit free use of independent contractors by businesses for example section 1706.

Please explain "section 1706"

[harpseal]

Section 1706 of the IRS code was inserted into the tax reform act under Reagan in a late night conference. It was cosponsired by Moynihan and Packwood. What it does is remove the common business practice rule for determnining who is a contractor and who is an empoyee for electricl engineers, computer programmers, sysatems analysists, draftsmen and a couple of other professions so that instaed of what at the time was the cheapest and most efficient way for companies to hire independant contractors to perform these task on a contractual basis there needed to be an intermediary who actually paid the money to these peopel or teh company had to hire them as employees. The tax liability was placed on the consuming company if the IRS in a subsequent audit were to find the employees were not "independant contrcators" under the rules.

Now this was added at just the time the big seven accounting firms were purchasing a number of the smaller IT consulting/contract service companies.

[harpseal]

Three proposals of yours that a true free trader would support:

Now lets get this clear this will only work as a package deal anything less does not have a prayer of even really getting noticed. NBow clearly I am not an absolutist regarding Free Trade I believe as Adam smith did there are four sound reasons for Tariffs and I even go along with David Riccardo's principles about tariffs being justified because of absolute advantage. I did not include that justification in my tariff proposals. I further did not rule out a revenue tariff even though I am not at this time advocating same. Said revenue tariff would be in place of income taxes but IMHO would raise insufficeint revenue by itself at any level that could be passed.

Now most of my fous in teh discussion has been on Chinese tariffs but as of February 5, 2003 the following statement of fact is included in the following link. “India’s tariffs are today, more than ten years after the beginning of economic reform, the highest in the world, except for those of Pakistan, according to the World Bank.”

LINK

Now what we have is not Free Trade we have Unfree trade. We have a trade war where some are advocating unilateral disarmament on our part. IMHO it makes about as much sense as a person advocating eliminating our armed forces on December 8, 1941 so we do not have to fight with the Japanese.

[.cnI redruM]

Let's assume a 15% tariff on all foreign goods. Here's what I think would occur as a result.

1) Domestic producers come under immediate pressure to raise their prices by 15% as well.
a) All their employees expect a 15% raise.
b) All of their subcontractors and suppliers know the money is out there and immediately charge a 15% above previous rates.

2) Every consumer in the economy now has to pay 15% for everything they buy.

3) Every foreign country we do business with takes immediate offense and tariffs us by at least 15%. The ones that don't particularly like us make it 30% out of spite.

4) As a net result the following occur.
a) Intrest rates decrease because our tariff regime chased out foreign capital. US banks can and do charge more for the use of their money. Fewer marginal firms can afford credit and therefore are no longer able to debt finance. No investment means no new jobs.
b) Prices increase across the board and wages stay stagnant or decrease as a result of the increased cost of credit and capital.
c) Standards of living go down as the US economy contracts until it reaches an equilibrium.

[SteveH]

type slooooower....

Y'all will have to take my word for it that I typed as slowly as I could.

Now answer the questions I posed (unless you are just a free trade troll, in which case thanks, good luck and good-bye).

;-)

[SteveH]

Really? Viewed as a tax on corporations, tariffs are just another form of regulation and income for government programs. Couple tariff increases with a corresponding decrease in individual (non-corporation) income taxes, and the net effect would be more consumption by those individuals within the US to drive the domestic economy.

Basically I am coming to believe that the same arguments that apply to the reduction of regulations and taxes on multinationals are also applicable, if not more applicable, to individual taxpayers. And the sky-falling predictions of free traders droning on about how tariffs can only hurt me begin to fall flat. Maybe we should even arrange for a tariff withholding for multinationals. The point is that taxation is a fact of life and it is the free traders who seem to be duped into whining about it on behalf of the all-wonderful multinationals (who after all are only fictitious persons).

Now if all one wants to do is increase the wealth and power of multinationals at the expense of real US citizens via "free trade", you may have scored some points...

(And in response to what will probably be your next point, I do draw a distinction between large and small investors, due to the inability of insider trading laws to keep the stock market playing field level.)

[secretagent]

Thanks for the explanation of Section 1706. Sounds like welfare for those 7 big accounting firms.

[secretagent]

"Three proposals of yours that a true free trader would support:..."

Now lets get this clear this will only work as a package deal anything less does not have a prayer of even really getting noticed.

Why not? Your 3 proposals would increase the competitiveness of US companies, and so would appeal to the free traders that have the upper hand today.

[FITZ]

I understand your apprehension, but I guess my ancestors were born of pretty strong stuff. I hope to live up to their standards.

So were mine ---- and I actually think I'll end up okay --- I've got two jobs now and taking classes, I've learned Spanish, and all the rest ---- I'm ready, you might be. But it's not really about just you and me ---- it's what is happening to the majority of Americans, including the lower skilled Americans who will never work again because millions of factory jobs and garment worker jobs are gone forever. And American programmers who will quickly slip backward in their skills if having to clean carpets for a living instead of programming. It matters what happens to the most Americans --- I think the Founding Fathers realized that. Most of them could have opted for the aristocracy and gotten themselves into that class easily enough ---- but they had a greater vision.