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Post by Tim Collins on Dec 3, 2008 16:52:31 GMT -7
Why is it we develop "free trade" agreements such as NAFTA CAFTA etc, with the stated objective of improving each country's ability to export their goods to a bigger market and the primary method is removing unnatural Trade Barriers, IE tariffs on imports. The theory is that all participants economies will improve.
If NAFTA is the poster child for this, then these programs are a failure. In particular these programs fail when a developed nation is tied into a developing nation. In the case of NAFTA, the US and Canada I classify as the developed nations and Mexico is the developing nation. The result has been, the US and I assume Canada, have gained access to cheaper labor at the cost of lost manufacturing capability. Mexico has gained manufacturing jobs, but not corresponding increases in wages (yes wages have grown but still are minuscule compared to the US and Canada).
Do these agreements not just perpetuate the exploitation of labor in a developing nation?
What if we required that any manufacturing moved to a member country be required to pay salary and benefits to their employees of not less than (for example) 80% of the pay scale in their home country? In the case of Mexico, would this not in the long run raise wages and produce a middle class with disposable income, and thus create a viable market for the products produced in the US and Canada? At the same time, would it not also slow the exporting of our manufacturing capabilities?
It seems to me, in the long run, it would be Fair Trade that is achieved. The citizens of all countries would have an opportunity for economic advancement and the competition would take place on quality of product instead of cheapness of labor?
Still developing these thoughts
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rosa
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Post by rosa on Dec 3, 2008 20:09:20 GMT -7
most up and coming economies cannot sustain this. some won't even consider it because they understand the desperation of citizens who accept work even as they're being exploited
"fair trade" was what it was called. it's not necessarily what they meant
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rory
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Post by rory on Dec 3, 2008 22:02:05 GMT -7
very true.. fair trade is not what it is... basically nafta is, and i may be going off track now, a way of improving our economy, and allowing others to improve ( at times, at their expense) the economy of their respective countries. We are living in a GOBAL economy!... we must improve our ways in order to progress. this in turn gives others the opportunity to improve. in the long run its good for all.... look at the big picture...
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rosa
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Post by rosa on Dec 4, 2008 19:32:17 GMT -7
NAFTA was a snow job; ask anyone whose job is in Bangladesh now. I talk to folks in another country when I need my phone serviced. We exported in order to sell it and it snow-balled
what can you buy that's still made in the US?
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Post by Tim Collins on Dec 4, 2008 19:52:25 GMT -7
Sorry to be the nit picker here but the term used is FREE trade (North American Free Trade Agreement). My argument is for FAIR trade, meaning a level playing field, or a more level playing field. FREE trade had the objective of removing "unnatural" barriers to trade - primarily import tariffs, and the sweetener was some requirements for product safety etc. This is a nice idea, but when for example labor in the US, oh I don't know lets look at a strong industry like auto manufacturing , averages $28 per HOUR before benefits and cost of safety regulations and environmental compliance' and then in Mexico labor cost are $40 per WEEK before the safety and environmental cost compliance, removing the tariffs for northward moving products sounds like a sweet deal for companies south of the border. The problem is those companies (and the jobs) used to be north of the border, or in Japan, or in China etc. How has the Mexican labor market benefited? Hell they got great wage increases and new jobs that did not exist before. Will this produce a better life, a strong and growing middle class? Never. What NAFTA created was almost a 180 degree flip of the old colonialism. In the Colonial Economics period the Power Countries took the raw materials from the colonies at low cost, kept the manufacturing home and sold the finished products back to the rich in the colonies. They also put laws and/or tariffs in place to try and keep the colonies from becoming competing manufacturers. Now look at NAFTA - the colony (figuratively) Mexico provides the cheap labor to MANUFACTURE and the powerful country keeps the bigger profits and throws the scraps in terms of slightly improved wages to the colony. NAFTA and similar agreements are still exploitive, no matter how you spin it. I will write more, as I have more to say, when I am not balancing my Granddaughter on my knee as I type.
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rory
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Post by rory on Dec 4, 2008 19:56:40 GMT -7
adam smith ;D baby.....
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rory
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just wonder what i'm thinking of.....
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Post by rory on Dec 4, 2008 20:07:44 GMT -7
i'm gonna take a postive point of view here. the usa is in the process of moving warehouse industries out. those types of jobs have gone / are going to second, third world countries.... it forces us, usa, to learn new trades, become more service oriented. it gives other countries the opportunity to expand thier trade. we are what we are a "global society".
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Post by Tim Collins on Dec 4, 2008 20:19:46 GMT -7
Nope we are not a global society. Some would like us to become such a thing, unfortunately they are the wrong some. As a student of History I love the idea of Utopian Societies, but as a pragmatist - you have to think about the meaning of the words Global Society and think through the necessary changes to get there. There are great dangers as well as benefits, particularly when it comes to global economics - look at how wide and how quickly economic downturns or market or currency fluctuations can circle the globe.
Also, Nations still exist and will so for a long time and with them nationalism.
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Post by Tim Collins on Dec 5, 2008 7:46:06 GMT -7
i'm gonna take a postive point of view here. the usa is in the process of moving warehouse industries out. those types of jobs have gone / are going to second, third world countries.... it forces us, usa, to learn new trades, become more service oriented. it gives other countries the opportunity to expand thier trade. we are what we are a "global society". That would be great if it were true. We are not moving warehouse industries (if I understand what you mean by that) we are moving actual manufacturing and assembly industries and keeping the low value warehouses. I know this from up close and personal experience selling industrial equipment and supplies on the US/Mexico Border. IN 2008 alone, I have sold capital equipment to include large (100 HP and above) Air Compressors, and standby generators to US owned companies moving operations to Mexico. The states these companies were coming from included North Dakota, Texas (El Paso), Georgia and North Carolina. Here in El Paso, since I arrived in late 1999, I have watched the manufacturing base for all intents and purposes disappear. Large US Corps that had plants here are now operating in Juarez,MX. Almost the entire garment industry that was a major player/employer here is now shut down - I really do not know where they went to but am certain it was not Mexico. As to warehouses - these too are moving out as the law changes for trucking companies crossing from Mexico. In the past El Paso had many transshipment warehouses where products assembled or manufactured in Mexico were imported to El Paso warehouses from which they were cross docked and transferred to trucking companies (US) that could distribute the product throughout the US. As Mexican trucking firms gain the ability to travel throughout the US, these warehouses become unnecessary, except in a smaller mode where the direction of travel reverses, so that US materials or equipment destined for Mexican factories are received and the paperwork is processed for import to Mexico. This flow obviously is much smaller in volume than that of finished product entering from Mexico.
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