Loading ...FREE-FOR-ALL TRADE
A coalition of Indiana farmers, labor and faith leaders are protesting a NAFTA-style agreement with Peru that the U.S. Senate will debate next week. They say NAFTA and similar free trade agreements have been responsible for the loss of thousands of American jobs.
I agree jobs have been lost, but jobs have also been gained. What the opponents of free trade don’t understand is that we as Americans are a bit contradictory when it comes to labor and prices. On the one hand we want people to have “good-paying jobs” but on the other hand we want items on the cheap.
The only way you can achieve this is to either charge so much that you can afford to pay the high wages or you move so much product that what you lose in price you make up in volume. I frankly don’t care where certain items come from as long as they are of equal value and they’re cheaper.
Welcome to capitalism and the 21st Century. For every job allegedly lost by free trade, there are more opportunities created. But to take advantage of those opportunities you have to be creative and offer a personal service that the bigger guys can’t provide. It has been done before and it will be done again. So give it a try.
November 30th, 2007 at 7:49 am
Doesn’t matter how cheap the goods are unless you can buy them. The trick is to keep the purchasing power of your job steady or increasing.
Companies naturally want to pay their own employees as little as possible but really want other companies to pay their own employees well enough to buy the first company’s products. It’s sort of tragedy of the commons kind of situation.
November 30th, 2007 at 8:25 am
Free and fair trade is a necessity.
The United States must create a American free trade block to compete with emerging trade blocks in Europe and Asia in the absence of a global World Trade Organization agreement.
Globalisation is a reality that will not go away by being protectionist and by beating the drums that all of our countries weaknesses are the fault of foreigners or immigrants.
That message only works for hate groups like the KKK.
November 30th, 2007 at 8:34 am
“A coalition of Indiana farmers, labor and faith leaders are protesting a NAFTA-style agreement with Peru”
What an odd group to get together to protest.
It gives me an images of a bunch of backwoods Hoosiers that hate the big city Indianapolis as much as Peru.
November 30th, 2007 at 8:51 am
I can tell I’m not quite awake yet. At first glance I thought we were negotiating a NAFTA agreement with Peru, INDIANA!
November 30th, 2007 at 9:01 am
NAFTA does hurt Indiana disproportionately to the rest of the nation because of the concentration of manufacturing jobs in our state. Unions make outrageous demands until the camel’s back finally breaks and manufacturers jump the border to cut labor costs.
The flip-side is that Indiana has increased opportunity to reform it’s workforce for 21st century jobs. Attracting life sciences companies to the state is only half of the equation. The state needs to do a better job of grabbing the laid-off factory worker and immediately placing him or her in education and training in high-tech and science-based fields. Unemployed people can’t afford high-dollar tuition, so yes, the state would have to cough-up a chunk of cash for such a program, but it makes long-range economic sense! A highly trained workforce attracts investment; Indiana could become the Silicon Valley of life sciences in stead of becoming a magnet for minimum wage call center jobs.
Too bad it will never happen. The current “we hate all taxes” mentality destines us to become a low tax, low service state like Mississippi with dismal education statistics and no real prospects for economic development.
NAFTA or not, the modern trend is to export unskilled jobs to foreign countries and import highly skilled jobs here. Unless we get on board with that concept, there’s no hope for progress in the Hoosier state.
November 30th, 2007 at 1:32 pm
This is an area where I vehemently disagree with you, Abdul.
Although pricing and jobs are important issues, they aren’t the primary concern.
Besides the fact that I’ve yet to see an FTA that’s “fair”, the primary issue is that once signed, these agreements take future sovereign decision making authority on critical economic issues away from our elected officials (ie away from us) and place them in the hands of appointed tribunals who comprise officials from multiple countries.
Meaning that when a dispute or issue requiring adjucation or resolution is introduced, protecting US interests is no longer in the hands of the US Congress or our legal system - it’s in the hands of non-elected appointees, most of whom are foreigners.
The danger here is that our GOP/Dem government keeps adding more and more of these agreements, further dwindling our domestic/sovereign control over critical trade decisions, and all of them are structured to place US trade policy in alignment with the World Trade Organization, which is aligned to the goals and policies of the United Nations. That is their primary purpose.
And contrary to popular belief, it’s not a natural progression. It’s a detailed, painstakingly planned and intentional effort to motivate, influence, and/or force a common global economy - conducted by the private, non-elected elements who are behind the WTO and it’s inception.
We all have a right to our opinions, but to repeat myself, I strongly disagree with you on this one. It’s about more than prices and jobs. The issue goes straight to the core of our Constitutional principles of sovereignty and of the future ability of our representative leadership to effectively craft and control our economic policy.
November 30th, 2007 at 4:54 pm
Importing highly skilled jobs and raising education and skill levels for our current workers to fill new high tech jobs here is an idea most people should support. Unskilled jobs are being exported for a reason.
How else can we retain our sustainable competitive advantages over other nations.
November 30th, 2007 at 8:47 pm
Quote: “On the one hand we want people to have ‘good-paying jobs’ but on the other hand we want items on the cheap.”
Hmmm…I just saw $25 NFL team caps for sale in the mall, all of them made in Bangladesh. So much for “cheap products”–the manufacturer is eating all the benefits, not passing any to the consumer.
But anyway, the problem with free trade–i.e., 0% revenue tariffs–is that you need to raise taxes on domestic manufacturing in order to make up for the lost revenue due to no revenue tariffs. I.e., what is called “free trade” is really just reverse protectionism, hiking the burden on domestic manufacturers in order to exempt it on foreign.
You can be opposed to free trade and still be pro-import, because you need imports to pay the taxes. To imply that those who support revenue tariffs are anti-import is like saying those who support state sales taxes don’t want people to buy anything. Of course they do–for how else could sales taxes be effective for revenue generation?
Quote: “I frankly don’t care where certain items come from as long as they are of equal value and they’re cheaper.”
I do. I care more about my fellow Americans than I do foreigners. Charity begins at home.
Still, don’t forget to take into account the falling value of the US dollar due to large trade imbalances. Plus higher income taxes due to so many more unemployed. Not only does that money savings disappear, it actually becomes *more* expensive for you overall–remember, the manufacturer, not you, is pocketing all the benefits from the cheap labor when he sells you a simple baseball cap for $25.
Ultimately, when you have a manufacturing base that resembles Haiti’s, soon you have an economy that resembles hers as well.
November 30th, 2007 at 9:39 pm
Shorebreak is right; it is much more complicated than low wages and low prices.
There is nothing positive about annual trade deficits in the hundreds of billions of dollars. This country can’t sustain itself with just financial manipulations and the creation of false internal markets. If we were really doing so well, these trade deficits would not exist or would be minimal at worst. See below.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/11/26/101232904/index.htm?postversion=2007111211
http://money.cnn.com/magazines/fortune/fortune_archive/2007/11/26/101232838/index.htm?postversion=2007111212
December 2nd, 2007 at 11:49 am
I guess it depends what kind of society we want to have. The disappearance of low-skill manufactoring and other labor jobs has *not* meant a disappearance of capital in the USA. We are shifting from a laboring nation to a managing nation. It puzzles me that so many clutch to low-skill work. Do we want to be a nation of laborers, or managers? We need to embrace the power of education and our minds rather than our hands and backs. There is a huge segment of our population positively begging to be left behind.