Cafta

[Fletchette]

Will it help or hurt the U.S.?

On a related note, I was listening to liberal Ed Schultz today interview a Democrat who voted for CAFTA. Ed (gasp) actually took him to task and challanged him about it. After the Congresscritter explained how this will help the Central and South American people get jobs and therefore not need to come to the U.S. as "undocumented workers" (what spin), Ed said, "respectfully, it seems that you are representing South America".

Ed won a few points of respect with me.

 

[Dan from MI]

I hate CAFTA and it's twins NAFTA and GATT. It's killing us in Michigan.

 

[Sindawe]

I think it will hurt the U.S. Moving manufacturing jobs outside our borders will continue to diminish our economic ability and reduce our standard of living. Some may recall in the 1980s when Manf. started getting hit bad (that I recall, I was too young in the 1970s to be aware of such things), the answer was white collar/high tech jobs, creative efforts and innovation. Well now the last of our skilled jobs that can be moved are being moved, along with those white collar/high tech jobs. Add to that the flooding of the "low skill" manual labor (not really low skill, just not the flying a desk thinking jobs) market with unchecked illegal immigration, and you have a recipe for disaster.

 

[Fletchette]

Add to that the flooding of the "low skill" manual labor (not really low skill, just not the flying a desk thinking jobs)...

...or the increasingly popular "non-thinking desk jobs".

 

[countertop]

Manufacturing jobs are already moving outside the US. CAFTA and NAFTA have nothing to do with that. Rather, the reason Michigan is getting killed is first and foremost the impact of a runaway civil liability system (toxic torts like asbestos), a screwed up energy policy that has created tremendous demand for natural gas - both a main power source as well as a feedstock of the manufacturing economy - without allowing for the infrastructure improvements that enable an adequate supply to exist (hopefully Congress will take a stab at fixing it when the Senate passes the energy bill later today), insane tax policies, and costly environmental laws that fail to provide any regulatory certainty and increase the cost of doing business substantially (the regulatory burden on the US economy is over $850 billion annually - with much of that (2-300) the result of environmental regulations which often times have no relation to the harm they are suppose to fix).

Throw in some crazy local laws not to mention continuing troubles with unions and health care (partly driven by law suit abuse but also driven by run away pension plans) and the cost of doing business in the US is a significant hurdle.

Then, on top of all that, in many cases a manufacturer can go oversees and get better trained (and more willing to work) workers than exist here in the US.

That, far more than any NAFT/CAFTA illusions your unions are trying to feed you are what drives jobs away.

 

[Fletchette]

(the regulatory burden on the US economy is over $850 billion annually - with much of that (2-300) the result of environmental regulations which often times have no relation to the harm they are suppose to fix).

I have often wondered about that. Do you have a source for this data? I have wondered how much this actually drives investment abroad. I wonder which is more responsible; it is mostly highly-paid U.S. workers or expensive regulations? Obviously both, but what are the percentages?

Note: one could also say that U.S. workers are not highly-paid, it is just that foreign workers are under-paid. The cold laws of supply and demand result in the majority of the planet working their butts off just to survive.

 

[Refirignis]

You're forgetting Codex, which in short basically makes dietary supplements regulated. Soon you will need an expensive doctor's prescription for things like Vitamin C.

Ron Paul says...

The House of Representatives is scheduled to vote (and now approved - GU) on the Central American Free Trade Agreement in the next two weeks, and one little-known provision of the agreement desperately needs to be exposed to public view. CAFTA, like the World Trade Organization, may serve as a forum for restricting or even banning dietary supplements in the U.S.

The Codex Alimentarius Commission, organized by the United Nations in the 1960s, is charged with “harmonizing” food and supplement rules between all nations of the world. Under Codex rules, even basic vitamins and minerals require a doctor’s prescription. The European Union already has adopted Codex-type regulations, regulations that will be in effect across Europe later this year. This raises concerns that the Europeans will challenge our relatively open market for health supplements in a WTO forum. This is hardly far-fetched, as Congress already has cravenly changed our tax laws to comply with a WTO order.

Like WTO, CAFTA increases the possibility that Codex regulations will be imposed on the American public. Section 6 of CAFTA discusses Codex as a regulatory standard for nations that join the agreement. If CAFTA has nothing to do with dietary supplements, as CAFTA supporters claim, why in the world does it specifically mention Codex?

Unquestionably there has been a slow but sustained effort to regulate dietary supplements on an international level. WTO and CAFTA are part of this effort. Passage of CAFTA does not mean your supplements will be outlawed immediately, but it will mean that another international trade body will have a say over whether American supplement regulations meet international standards. And make no mistake about it, those international standards are moving steadily toward the Codex regime and its draconian restrictions on health freedom. So the question is this: Does CAFTA, with its link to Codex, make it more likely or less likely that someday you will need a doctor’s prescription to buy even simple supplements like Vitamin C? The answer is clear. CAFTA means less freedom for you, and more control for bureaucrats who do not answer to American voters.

Pharmaceutical companies have spent billions of dollars trying to get Washington to regulate your dietary supplements like European governments do. So far, that effort has failed in America, in part because of a 1994 law called the Dietary Supplement Health and Education Act. Big Pharma and the medical establishment hate this Act, because it allows consumers some measure of freedom to buy the supplements they want. Americans like this freedom, however-- especially the health conscious Baby Boomers.

This is why the drug companies support WTO and CAFTA. They see international trade agreements as a way to do an end run around American law and restrict supplements through international regulations.

 

[R.H. Lee]

More globalism, less sovereignty, but what the hey, it increases the bottom line for the corporate/government beast.

And that's really what's important, right?

 

[countertop]

have often wondered about that. Do you have a source for this data? I have wondered how much this actually drives investment abroad. I wonder which is more responsible; it is mostly highly-paid U.S. workers or expensive regulations? Obviously both, but what are the percentages?

Actually, my numbers were slightly off.

They come from the Crain and Hopkins study commissioned by the U.S. Small Business Administration a couple of years ago (I believe it was conducted during the Clinton Administration - it came out in 2000 or early 2001). According to their findings, the annual cost of all federal regulations is about $843 billion with environmental regulations costing $197 billion. Those costs have risen since that time (though I suspect while the burden of other regulations will begin to decline, the cost of environmental regulations will continue to rise - EPA's recent Mercury Rule and Regional Transport rules will cost almost $100 billion alone over the next 10-15 years).

Here's the citation for it:

W. Crain, T. Hopkins, The Impact of Regulatory Costs on Small Firms, Report RFP No. SBAHQ-00-R-0027, The Office of Advocacy, U.S. Small Business Administration.

You should be able to find it on either SBA's or OMB's web page.


If you actually listen to business leasers, you will hear them repeat time after time that these are the main reasons they are going offshore.

 

[Vang]

Good, of course. The downside is job loss. The upside is higher quality of life in the long run.

 

[Waitone]

Countertop, thanks for chiming in. I've yelled loud and long that the issue is not cheap labor. The issue is expensive government. The ruling class is using free trade agreement as a way of temporarily allowing US business interest to escape the artifically high cost of production in the US. Costs are high because of Health, Environmental, and Safety laws and regulation. Overlaying it all is the litigation risk. The National Association of Manufacturers put out a study estimating the added cost of product in the US over and above legitimate costs is 23 %.

My beef is these trade agreements have nothing to do with "free trade" and have everything to do with "Managed Trade." It the issue was free trade agreeing countries would sit down and begin striking laws that hinder the free flow of goods and services. In other words negotiators would begin depopulating the law code. What we get instead is the creation of another NGO with an expensive bureaucracy that has to be paid somewhere and somehow. These agreements always have a section that limits the national sovereignty of subject countries. I got major problems with it.

In selling CAFTA proponents could no longer use the arguments used with NAFTA. So they use the hot issue of the day. CAFTA will give locals the chance of a better life so they wont have to come to the US illegally. But my favorite arguments was CAFTA is a good thing because it will allow the countries to get kissy kissy with the US and not Cuba or Venezuela. So here we have "free trade" being used to implement US foreign policy objectives. Loosk like managed trade to me. Freedom is not the issue.

Bottom line? CAFTA allows US politicians to slip the weenie into the US sugar lobby. Politicians have taken sugar money for years and now they can reneig on promises because an outside force has "forced" them to stand up and stop sugar subsidies. All in all CAFTA is a simple extension of NAFTA.

Now we get to wait for FTAA and the North American Community. Ohh, goodie!

 

[aquapong]

I'm torn. On one hand I don't like the fact that our jobs are getting exported and will continue to do so...now some will go to Central America. On the other hand, history shows us that the "lesser" industries have always been moved from the 1st world to the 2nd and 3rd world countries while the new innovative industries flourish in the 1st world. I would rather see the feds offer more low cost loans and such to reeducate Americans in the newer fields rather than on unemployment.

 

[jmonarch]

"More globalism, less sovereignty, but what the hey, it increases the bottom line for the corporate/government beast."


I think that pretty much sums it up. I'm very discouraged by the prospect of Codex.

If Ron Paul is against it, you can be sure it isn't good!

 

[CZ 75 BD]

How about LAFTA?

Scrappleface

 

[FLXRing]

On the other hand, history shows us that the "lesser" industries have always been moved from the 1st world to the 2nd and 3rd world countries while the new innovative industries flourish in the 1st world.

If you consider menial service tasks innovative this is a great direction to go. Meanwhile back at the ranch we subsidize the growth of the Chinese military so it can match us technically when we come to the defense of Taiwan. Funny we signed NAFTA and that doesn't appear to be stemming the flow of iillegals any better than a cheesecloth wall would. Thanks Republican party... conservative eh.. I don't think so.

Interesting outtake from Paul Craig Roberts recent newsmax.com commentary.

America's Descent Into the Third World

Paul Craig Roberts
Thursday, July 21, 2005

The June payroll jobs report did not receive much attention due to the July 4 holiday, but the depressing 21st century job performance of the U.S. economy continues unabated.

Only 144,000 private sector jobs were created, each one of which was in domestic services.

Fifty-six thousand jobs were created in professional and business services, about half of which are in administrative and waste services.

Thirty-eight thousand jobs were created in education and health services, almost all of which are in health care and social assistance.

Nineteen thousand jobs were created in leisure and hospitality, almost all of which are waitresses and bartenders.

Membership associations and organizations created 10,000 jobs, and repair and maintenance created 4,000 jobs.

Financial activities created 16,000 jobs.

This most certainly is not the labor market profile of a First World country, much less a superpower.

Where are the jobs for this year's crop of engineering and science graduates?

U.S. manufacturing lost another 24,000 jobs in June. A country that doesn't manufacture doesn't need many engineers. And the few engineering jobs available go to foreigners.


you can read the rest here Article

 

[R.H. Lee]

Outsourcing low skilled labor to third world sweatshops is not 'free trade'. It's exploitation. We become a debtor nation as trade imbalances increase because y'all keep buying that cheap crap at Walmart, Costco, etc. thinking it makes you happy.

 

[wingman]

More globalism, less sovereignty, but what the hey, it increases the bottom line for the corporate/government beast.

Simply put it's all about greed on the part of our large corporations which
now care nothing for this country only about the bottom line, we continue
to outsource jobs and import uneducated labor at some point our system
will not take it any more pehaps when there is nothing more to bleed from
average joe taxpayer, sound bitter, yes and more people should be, our
freedom, quality of life is being sold.

 

[longeyes]

maggots rule

It makes sense, economically, if American workers own their companies, in whole or in part.

Non-economically is a whole other story.

My advice: Accept reality and invest in emerging markets.

 

[longeyes]

Form of stealth colonialism.

Problem is, most of us are in the "colonial class."

We are forging a latifundisti world.

 

[FLXRing]

In 1993, Republicans, by four to one, signed on to NAFTA. They believed the promises that our $5 billion trade surplus with Mexico would grow and illegal immigration would diminish. They were deceived. The NAFTA skeptics were proven right. The U.S. trade surplus with Mexico vanished overnight. Last year, we ran a $50 billion trade deficit. Since 1993, 15 million illegal aliens have been caught breaking into the United States.

Pat Buchanan WorldNetDaily Article Read it here

Essentially our politicians in cahoots with corporate entities are selling our national birthright. I am not a supporter of the Democratic party by any stretch but I'm running out of circles to mark in the voting booth because my congressman just lost my vote. I wrote him regarding CAFTA and he wrote me back some hogwash about "not making up his mind yet". It appears he caved to party pressure or contributions were at risk. Honorable indeed...

 

[longeyes]

one nation, under Greed...

The joke is that NAFTA and CAFTA are going to be followed by HAFTA...

as in "hafta move abroad to get a job!"

 

[GT]

There are no jobs abroad.

Massive unemployment everywhere except where they pay you $5 a week to assemble widgets.

Lack of realism here.

G

 

[longeyes]

Just a joke, GT. And not mine. I'm not advocating moving anywhere.

America needs to get a realistic grasp on its economic situation, big picture, and start taking the steps needed to deal with it. We are living in fantasy about what's really going on. The impact of job transfer, massive debt, et al. will explode in a few years. Meanwhile, too many of today's kids are preparing for neverending, entitled fun.

 

[longeyes]

next step

from wikipedia:

Free Trade Area of the Americas
The Free Trade Area of the Americas or FTAA (in Spanish: Área de Libre Comercio de las Américas, ALCA; in French: Zone de libre-échange des Amériques, ZLEA; in Portuguese: Área de Livre Comércio das Américas, ALCA) is a proposed agreement to eliminate or reduce trade barriers among all States in the Western Hemisphere except Cuba. In the latest round of negotiations, officials of 34 nations met in Miami on November 16, 2003 to discuss the proposal. The proposed agreement would be modeled after the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States.

Discussions have faltered over similar points as the Doha round of World Trade Organization (WTO) talks; developed nations seek expanded trade in services and increased intellectual property rights, while less developed nations seek an end to agricultural subsidies and freer trade in agricultural goods. Similar to the WTO talks, Brazil has taken a leadership role among the less developed nations, while the United States has taken a similar role for the developed nations.

Talks began with the Summit of the Americas in Miami in April 1994, but the FTAA was brought to public attention during the Quebec City Summit of the Americas in 2001, a meeting targeted by massive anti-corporatization and anti-globalization protests. The Miami negotiations in 2003 were met by similar protests, though perhaps not as large.

In previous negotiations, the United States has pushed for a single comprehensive agreement that would reduce trade barriers for goods, while increasing intellectual property protection. Specific intellectual property protections could include Digital Millennium Copyright Act-style copyright protections, similar to the U.S.-Australia Free Trade Agreement. Another protection would likely restrict the reimportation or cross-importation of pharmecuticals, similar to the proposed agreement between the US and Canada.

Brazil has proposed a measured, three-track approach that calls for a series of bilateral agreements to reduce specific tariffs on goods, and a hemispheric pact on rules of origin and dispute resolution processes. Brazil seeks to omit more controversial issues from the agreement, leaving them to the WTO.

The location of the FTAA Secretariat is to be determined in 2005. The main contending cities are Miami, Florida and Port-of-Spain, capital of Trinidad and Tobago.


History pre-1994
In the 1960s there were several modest attempts at regional integration in South America, Central America, and the Caribbean. Though not technically correct, states in these regions are often referred to collectively as “Latin America”. The approach of these regional initiatives was to lower tariffs internally while maintaining high trade barriers against non-members. Regional initiatives included the 1960 Latin American Free Trade Association (LAFTA), the 1960 Central American Common Market (CACM), the 1965 Caribbean Free Trade Association (CARIFTA), and the 1969 Andean Pact.

Many Latin American countries experienced a debt crisis in the 1980s, such as Mexico in 1982. These debt crises contributed to a ‘lost decade’ in terms of economic growth, the adoption of numerous stabilization and structural adjustment programs with the IMF, and a widespread re-evaluation of interventionist, protectionist and inward-looking development strategies. In 1984 the U.S. unilaterally lowered its tariffs against many states in the Caribbean Basin, as part of its Caribbean Basin Initiative.

Many Latin American countries took non-discriminatory steps towards trade liberalization in the late 1980s (lowering tariffs against all countries - not just selected ones). This was done partly to follow through on GATT (now the WTO) commitments, but also unilaterally as a domestic policy choice or at the urging of the IMF, the World Bank, the IDB, and USAID. Average tariff levels fell to about 20% in the region by the end of the 1980s.

Another wave of regional trade agreements took place in the late 1980s and early 1990s. In 1989 the AP agreed to move towards freer trade within the region, as did CACM and the Caribbean Community (Caricom) in 1990. The Southern Cone Common Market (Mercosur) notably including Brazil was established in 1991 with similar plans for freer regional trade.

The U.S. entered into the Canada-U.S. Free Trade Agreement (FTA) in 1989, and the beginning of negotiations towards free trade between Mexico and the U.S. were announced the next year in 1990. These negotiations were soon expanded to include Canada in the North American Free Trade Agreement (NAFTA). Several Latin American countries approached the U.S. after the announcement, seeking to negotiate their own bilateral free trade agreements with the US, but the U.S. refused to negotiate any more bilateral PTAs in the region until NAFTA was implemented. Instead, in June 1990 U.S. President George H. W. Bush announced the Enterprise for the Americas Initiative with the goal of achieving hemispheric free trade by 2000.

In 1994 NAFTA came into force and the 1986-1994 Uruguay Round of GATT negotiations were completed. The goal of hemispheric free trade, which had been renamed the FTAA, was postponed until 2005 primarily at the request of Canada and the U.S.

 

[Waitone]

Update. Atlanta and Houston and Miami are all pitching for the Secretariat. Seems they all want a crack at 24,000 bureaucrats needed to implement a "Free Trade Agreement".

You don't need bureaucrats to implement free trade. Free trade is something you just do.