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It Turns Out The Protectionists Were Wrong About The Central American Free Trade Agreement
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Rob - 05:01pm on 01/11/2008

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.

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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.


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