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Friday, January 11, 2008

It Turns Out The Protectionists Were Wrong About The Central American Free Trade Agreement

Here’s North Dakota’s own Senator Byron Dorgan, perhaps one of the most protectionist members of the US Senate, reacting to the Senate’s passage of CAFTA back in June of 2005:

“CAFTA simply continues the failed trade policies of the past which have produced the biggest trade deficits in the history of the world and exported American jobs by the millions. It does nothing to improve the lives of workers in CAFTA countries or in the United States. In fact, it asks U.S. workers to compete with workers in countries where there are little or no worker or environmental protections in place, and where wages are as low as $2 a day.”

“I am also very concerned about the precedent this agreement sets for the sugar industry. Sugar workers and producers in the U.S. will be hurt and hurt deeply by this agreement.”

“I expect there will be a tougher time winning CAFTA approval in the U.S. House. Traditionally, trade agreements are a tougher sell in the House than in the Senate, and that appears to be the case today. So there is still hope, but the fact is, American workers and producers – particularly sugar producers – have been dealt a very bad blow by the U.S. Senate tonight, and by an Administration that has once again negotiated an agreement that shows little evidence that the interest of American workers and producers were given much, if any, thought at all.”

Now here’s the reality of CATA’s impact on trade relations with Central America courtesy of the National Association of Manufacturers.

image

It seems like Dorgan was dead wrong on CAFTA, which actually doesn’t mean anything except that it’s yet another thing North Dakota’s media won’t call him on.

Not that trade deficits and surpluses are necessarily indicative of much of anything.  They have to be put in context.  If we, as a country, buy up a lot of goods from another country because they’re cheap and of acceptable quality but we don’t ship a lot of goods back we have a trade deficit with that country.  The economically illiterate are quick to jump on that as a bad thing, but the reality is that if we’re getting the goods from that country cheaper than what we’d get them for from another country that money we save has a very positive impact on our economy.

An impact that’s every bit as positive and significant as a large export surplus would have.  After all, if your average citizen can buy a television for a hundred dollars less than he/she would have anyway, that’s $100 that will get spent elsewhere in our economy.  It makes a difference.

Ultimately, Americans should be free to buy their goods from the manufacturers that best meet their requirements for price and quality regardless of where that manufacturer is located.  That’s freedom.  Protectionism, which drives up prices and restricts our freedom to choose, isn’t.

Comments

American pay double the world price
for sugar, because of import tariffs and restrictions.

The Fanjuls of Florida and the sugar beet growers political clout will be tested.

They have maintained their power for decades.

Here’s to cheaper twinkies.

WOOF on January 11, 2008 at 05:59 pm

The Clintonistas were all for CAFTA and GATT.
Anyone who isn’t, is guilty of jingoism.

Kevin on January 11, 2008 at 08:09 pm

WOOF:

American pay double the world price
for sugar, because of import tariffs and restrictions.

I suspect you won’t get any argument on this blog that these tariffs need to be lifted.

That way I can pay half as much at the nudie bar, when I say “give me some sugar, baby!”

Carrick on January 11, 2008 at 09:01 pm

The Fanjuls of Florida and the sugar beet growers political clout will be tested.

Despite your anti-business leftie spin, this is all the govt’s fault.  The govt always gets a quid pro quo.


"One must regard his leftist opponent as a parent regards his recalcitrant child. Don’t give an inch in a debate with a leftist, and you’ll soon frustrate him to the point that he falls back to his default position. He’ll gainsay your every point. He’ll even resort to calling you names and accusing you of having suspect parentage.”

robert108 on January 11, 2008 at 09:35 pm


All
is a long stretch R.

this is all the govt’s fault.

Almost all the nation pays,
a few benefit.

WOOF on January 11, 2008 at 09:44 pm

Almost all the nation pays, a few benefit.

The govt benefits, the rest of us pay, one way or the other.  Without a govt handing out favors, there is no graft.  This is why govt needs to stay out of the market.


"One must regard his leftist opponent as a parent regards his recalcitrant child. Don’t give an inch in a debate with a leftist, and you’ll soon frustrate him to the point that he falls back to his default position. He’ll gainsay your every point. He’ll even resort to calling you names and accusing you of having suspect parentage.”

robert108 on January 11, 2008 at 09:50 pm

Graft pays for favors.

Some politician didn’t get up one morning and think “Maybe if I do
the sugar boys a favor, then they might drop some bucks on me.”

There are legions who want favors from pols, those who apply grease best don’t squeal.

WOOF on January 11, 2008 at 10:01 pm

It’s rather funny the gals like Woofie get all upset with the sugar industry (or whoever’s handing out donations); but doesn’t give a darn about the politicians that set up the groundrules and take the money and perhaps vote against the good of the country for those donations.

Who’s got the higher standard of duty.

Jack Abramoff funnels I think about $100,000 to Byron Dorgan who funnels money to wealthy tribes but they don’t think anything of Dorgan’s part of it.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on January 11, 2008 at 10:09 pm

There are legions who want favors from pols, those who apply grease best don’t squeal.

You’re not getting it; no politics in business, no one to pay for favors; no favors, just competition.
Govt is the source and the cause of graft.


"One must regard his leftist opponent as a parent regards his recalcitrant child. Don’t give an inch in a debate with a leftist, and you’ll soon frustrate him to the point that he falls back to his default position. He’ll gainsay your every point. He’ll even resort to calling you names and accusing you of having suspect parentage.”

robert108 on January 11, 2008 at 11:11 pm
Avatar for ww
ww on January 11, 2008 at 11:20 pm

You forgot the part about the Americans that lose their TV manufacturing jobs and the money that they would have used to buy refrigerators, washers, dryers, cars, houses, candy, corn, flowers, jewelry, dishes, booze, guns, ammo, fishing poles, furniture, soap, salt, tires, tune ups, oil changes, computers, software, DSL, books, magazines, cable TV, American flags, college classes, food, gas, go to the movies, rent videos, donate to charity, pay in taxes, go on vacations, ----

That money is now south of the border. So, you need to crunch more numbers and figure out if there is actually more money here or less money here when we lose jobs compared to paying $100 less for TV sets.

Our Country’s credit rating, which is about to be lowered, is a direct reflection of the amount of money in our economy compared to our debt.

Something’s not working.

ews48 on January 12, 2008 at 02:35 am

ews48, did you not read Rob’s post. It refutes your argument. The manufactured goods trade deficit has been reversed with CAFTA, and we now have huge surpluses with those countries. So we’re making and selling more south of the border. How does that eliminate U.S. manufacturing jobs.

The erstwhile hirsuit Dorgan will point somewhere else, now complaining about NAFTA. But our trade deficit with NAFTA is the result of energy (oil) imports, because of our growing demand and the failure of people like Dorgan to support expanded domestic production.

Manufacturing jobs have declined, true, since 2000. But that’s because low-cost—LOW-COST—manufacturing has migrated to China, mostly; U.S. manufacturing is dramatically more productive; and U.S. students don’t learn the skills needed in a high-tech economy; and, ummm, the world is dynamic and things change.

Pomerdorgrad on January 12, 2008 at 06:18 am

That money is now south of the border.

Actually, that is what’s happening with the invaders sending their pay back to Mexico.  If we were really “losing jobs”, our unemployment rate would be a lot higher than 5%l, which is economically in the range of “full employment”.  Your lame populist argument is just wrong on the facts.


"One must regard his leftist opponent as a parent regards his recalcitrant child. Don’t give an inch in a debate with a leftist, and you’ll soon frustrate him to the point that he falls back to his default position. He’ll gainsay your every point. He’ll even resort to calling you names and accusing you of having suspect parentage.”

robert108 on January 12, 2008 at 09:30 am
Avatar for skh.pcola

EWS, the federal government’s credit rating isn’t “about to be lowered.” Your reading comprehension is poor, or you are engaging in that time-honored leftard tradition of flat-out lying.  Here’s the pertinent quotation:

Moody’s Investors Service said on Thursday the United States’ “triple-A” government bond rating could come under pressure in the very long-term if the Medicare and Social Security programs are not reformed.

“Could” and “very long-term” do not equate to “about to be lowered.” But thanks for your shrill alarmism, anyway.

Linky to story:
http://www.reuters.com/article/bondsNews/idUSN1017237120080110?sp=true

skh.pcola on January 12, 2008 at 12:05 pm

It’s also just the rating of govt bonds, not the economy of the US.  The strength of our economy is microeconomic, not macroeconomic.  Of course, big govt lefties are ignorant of this fundamental economic truth.


"One must regard his leftist opponent as a parent regards his recalcitrant child. Don’t give an inch in a debate with a leftist, and you’ll soon frustrate him to the point that he falls back to his default position. He’ll gainsay your every point. He’ll even resort to calling you names and accusing you of having suspect parentage.”

robert108 on January 12, 2008 at 02:07 pm
Avatar for Dave Mastio

I was the USTR speechwriter during the debate over CAFTA and one of the frustrating facts that we had a hard time getting out widely enough was that before CAFTA, the U.S. had already abandoned almost all of its trade restrictions with Central America under a wildly popular bipartisan program called the Caribbean Basin Initiative. So when the free trade agreement was negotiated we actually had to lower very few barriers compared to the CAFTA countries.

Dave Mastio on January 13, 2008 at 08:18 am
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