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The CONCEPT of free trade is good. I will admit that.
HOWEVER, here is always a big BUT
Freeing up trade does not “open new markets” as much as it enables giant, multinational corporations to become even more giant and more multinational – at the expense of smaller companies and the rest of us.
Economists say that free trade allows us to take advantage of the “comparative advantages” offered by other countries. Here’s the thing. Buying goods from low-wage and low-environmental protection countries means not making them here anymore. “Trade” increases, but so does our country’s trade deficit as imports rise and exports fall. Factories here close, people here get laid off, wage pressures here increase and overall demand in our economy decreases.
A healthy balance must be achieved somehow.
Free trade benefits the consumer more than it can possibly benefit the worker because of;
1) Government gets the tariff, protectionism is a big government tax program.
2) the law of comparative advantage. Protectionism shrinks the size of the pie.
3) Protectionism actually hurts workers in many industries. It actually often (due to higher costs of input goods in the manufacturing process) raises the costs of manufacturing goods. Thus less sales, thus less jobs.
Other problems with protectionism;
1) Retaliation, means less exports, less jobs.
2) Inflation, especially tough on those with fixed pensions.
3) The Treffin Dilemma, the end of trade deficits would jeopardize the dollar's status as the world's reserve currency.
The great Milton Friedman:
"Another fallacy seldom contradicted is that exports are good, imports bad. The truth is very different. We cannot eat, wear, or enjoy the goods we send abroad. We eat bananas from Central America, wear Italian shoes, drive German automobiles, and enjoy programs we see on our Japanese TV sets. Our gain from foreign trade is what we import. Exports are the price we pay to get imports. As Adam Smith saw so clearly, the citizens of a nation benefit from getting as large a volume of imports as possible in return for its exports or, equivalently, from exporting as little as possible to pay for its imports. The misleading terminology we use reflects these erroneous ideas. "Protection" really means exploiting the consumer. A "favorable balance of trade" really means exporting more than we import, sending abroad goods of greater total value than the goods we get from abroad. In your private household, you would surely prefer to pay less for more rather than the other way around, yet that would be termed an "unfavorable balance of payments" in foreign trade."
That "unfavorable balance of trade" helps finance our deficit, maintain inflation at a low rate and increases foreign capital in this nation of ours.
You are too young to remember the crap Detroit produced before Japanese competition came along.
hundreds of corporate representatives are advising the US negotiators and have advance access to the negotiating texts. While citizens are left in the dark, corporations are helping to write the rules for the FTAA.
How is that free trade? MANAGED trade is not FREE trade. 100% free trade doesn't exist in real world. It is highly controlled by global elite to benefit a few.
The North American Free Trade Agreement (NAFTA) is the quintessential managed-trade vehicle sold under the rubric of free trade.
hundreds of corporate representatives are advising the US negotiators and have advance access to the negotiating texts. While citizens are left in the dark, corporations are helping to write the rules for the FTAA.
How is that free trade? MANAGED trade is not FREE trade. 100% free trade doesn't exist in real world. It is highly controlled by global elite to benefit a few.
Yes, Free trade is a concept you move toward. Not away from. You certainly do not slap 45% TARIFFS ON ALL CHINESE GOODS. There were tariffs slapped on other nations goods in 1930. How many jobs did that produce?
Yes, Free trade is a concept you move toward. Not away from. You certainly do not slap 45% TARIFFS ON ALL CHINESE GOODS. There were tariffs slapped on other nations goods in 1930. How many jobs did that produce?
On this, I would have to agree. I am not saying tariff is the solution. Actually, I don't have a solution.
However, Free trade means the ability of producers to exchange their wares with anyone on the globe for other goods without some government standing in the way of some of those exchanges due to the country of origin of the goods involved.
We have a 19 trillion dollar national deficit. Much of that is currently being financed by our trade partners. Reducing trade means higher financing costs, higher deficits and debt.
The dollar is the world's reserve currency. One of the main ways nations obtain those dollars is giving us goods for them. We have a strong interest in maintaining the dollar's status as the reserve currency of the world.
On this, I would have to agree. I am not saying tariff is the solution. Actually, I don't have a solution.
However, Free trade means the ability of producers to exchange their wares with anyone on the globe for other goods without some government standing in the way of some of those exchanges due to the country of origin of the goods involved.
If economists ruled the world we would have trade. Free trade will always be a goal never reached. That does not mean that you do not try to tear down as many barriers to trade as possible.
“Our goal must be a day when the free flow of trade, from the tip of Tierra del Fuego to the Arctic Circle, unites the people of the Western Hemisphere in a bond of mutually beneficial exchange.’’ Ronald Reagan
If economists ruled the world we would have trade. Free trade will always be a goal never reached. That does not mean that you do not try to tear down as many barriers to trade as possible.
“Our goal must be a day when the free flow of trade, from the tip of Tierra del Fuego to the Arctic Circle, unites the people of the Western Hemisphere in a bond of mutually beneficial exchange.’’ Ronald Reagan
Managed trade is not free trade. Free trade doesn't exist in this world we are living in right now.
In real world, we have 27 giant profitable companies paid no taxes
This is good reason why we should look at Nafta. Mexico and other third world nations come in at lower wages purposely to shift Manufacturing from America. I do not see the President or Ms. Clinton speak towards this.
It will be interesting how may unions will not support the Dem's, like they have in the past. Again we are dealing with Trade deal long over due for review and we need to look at the impact of these deals. If we are not netting jobs in return to these Trade deals. This is a rip off, not for the common good!
Remember a good business deal must make the ROI to both parties. These Trades Deals are not in the best interest of the American People or this country!
NAFTA and Free Trade Do Not Belong in the Same Sentence
Also,
The line "all economists agree" carries much less weight these days because almost the entire economics profession somehow failed to see the $8 trillion housing bubble, the collapse of which wrecked the economy. Tens of millions of people continue to suffer with the loss of their jobs, their homes, and/or their savings as a result of this incredible incompetence.
Economists are just part of the political economy.
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Nafta Issue Raises her Ugly Head!
