The Very Frighteningly Exceedingly Bad Trade Deal Between The Bush Administration And Congress
I Could Add More Adjectives, But This Is Supposed To Be A Family Blog
By Pejman Yousefzadeh Posted in Economy | Featured Stories — Comments (16) / Email this page » / Leave a comment »
My take on it is in column form. And as always, Daniel Ikenson does nothing to allay my fears concerning the state of trade liberalization.
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The Very Frighteningly Exceedingly Bad Trade Deal Between The Bush Administration And Congress 16 Comments (0 topical, 16 editorial, 0 hidden) Post a comment »
The collapse of the Doha Round has signaled the sad fact that we've done all the easy things.
I don't think US/EU politicians will ever be willing to give up Agricultural subsidies and without those, other nations won't be willing to go farther.
Furthermore, the incentive to make further deals has been totally eroded in the US because of trade cheaters, like China, whose artificially low currency, discriminatory business practices, and reliance on other non-tariff barriers to protect their markets, is totally disheartening.
Finally, I don't even think we should seek future agreements until we clean up the WTO, whose AB panel refuses to apply the agreements we've signed (like 17.6 in the AD Agreements).
Its one thing when its free trade. Its another when its freer trade for others.
Also, food supply has an important intersection with sovereignty. While certainly sugar subsidies should go, I'm not in favor of shutting down american agriculture because Argentina can do it cheaper, nor am I in favor of increasing corporate control over the ag sector in order to make up with scale the cost difference.
Relativley small, distributed agriculture is similar to public key security. It should be thought of as a part of national security.
american agriculture. It would however weaken large agri-business and make smaller farmers more competitive and able to adapt to the shifting marketplace from foreign competition.
I don't tie any of these ideas to maintain subsidies with national security. If anything, the increased propserity a lack of protectionism brings to smaller poor countries is a benefit to our security in that these people enjoy a better standard of living and think more favorably of us.
The wealth pie is not fixed...it grows with more productivity. When we attempt to place grid lock on the pie to protect a portion of it, we place grid lock on growth which means less for everyone in the long run. We all have less as a result thru less properity in poorer countries and higher prices at home.
_Don't tread on me._
And just what country would you be talking about? France? Certainly not the US. I don't have a number in front of me, but "corporate interests" control agriculture in the US, lock stock and barrel. Ag subsidies are nothing more than welfare for the very rich.
US farms are also far and away the most efficient on earth. Farming isn't done cheaper or more productively ANYWHERE on earth.
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CongressCritter™: Never have so few felt like they were owed so much by so many for so little.
Ag subsidies are ruinous to the american tax payer and consumer who also pay a hidden tax thru higher prices. To believe in the benefits of free markets and then make exceptions is hypocritical...not to mention that it's not free markets anymore.
All people gain true wealth when when goods and captial flow as freely as possible.
Imagine if the US subsidized industries that do the bulk of their manufacturing in China and such places to keep them here. We'd be poorer, not better off.
Productivity matters the most. The rest is protectionist distraction that helps a few at the expense of everyone else.
_Don't tread on me._
Well, maybe not. We disagree on subsidies to manufacturing industries.
I agree with your "wealth" comment, though. And productivity. Generally, if the government is involved in the process productivity suffers.
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CongressCritter™: Never have so few felt like they were owed so much by so many for so little.
Why? How are they different than Ag sub's? or any sub really for that matter?
Subsidizing manufacturers is pointless and even harmful in the bigger picture. Again, you protect an extremely small group of people at the expense of everyone else thru taxes and higher prices (double whammy).
The prior-to-end-consumer utilizer of the goods that uses said goods to sell to to wholesalers, retailers and end consumers is also kept at a disadvantage with higher production costs..especially against foreign competitors. The end consumer, especially the poorer, will ultimately pay the price and have less purchasing power....hence less wealth.
The absence of subsidies forces innovation and frees manufacturers to make smarter choices. The increase in purchasing power for the masses thru lower prices will create new opportunities as will need to compete.
Sorry to go all "Austrian" on you but I strongly believe in these principles. Actually, there not even principles, they are fact. The question is whether we choose to respect them or not. When we don't, a price is paid whether we like it or not.
_Don't tread on me._
Chinese imports to the US are still only in the range 12-15% of all imports. The difference that would be achieved if they had a free floating currency would not have that great of an effect on us.
Besides, the increase in the standard of living in China has created a very large middle class with spending power (considering they have over 1 billion people). The demand for foreign goods from the US and Europe is increasing. China is also beginning to exhaust their trade advantage. Wages are increasing and China is trying to figure out how to adapt to domestic demand while not losing its exporting power.
China cannot go on without changing and they will change.
_Don't tread on me._
makes me sick that our government and businesses bow to a marxist state hell-bent on becoming a bigger super power than we are.
I think China is a modern day form of a mercantalist state, not a truly capitalist state. The posters condemn any U.S. protectionist tendencies, but fail to state that China is one of the most protectionist states in the world.
There is no such thing as pure free trade. Every country in the world has subsidies and tariffs. Ag subsidies occur everywhere. It is a simple proposition that you don't want to destroy your ability to feed yourself. In order to have pure free trade, you would have to abolish nation- states and the concept of "the common good."
China is using their WalMart profits to double the size of their Navy and modernize its
Army and Air Force. They are invested heavily in our government debt so that they can tell us, someday, we will ruin your economy by pulling our money out, if you try to interfere with our invasion of Taiwan.
It's just that the state is heavily involved. This won't work in the long run and China will have to change. In the mean time we are enjoying the benefits...which greatly outnumber the disadvantages.
I wouldn't get too hysterical about china. They need us as much (if not more) as we need them. Ruining our economy would hurt their manufacturing base. WE BUY THEIR STUFF....more than anyone else.
Market forces will not allow them to stay protectionist forever. The world is changing rapidly...faster than it did when we were essentially doing the same thing in the 1800's with the American System to bolster American manufacturing.
China's changing. They can't stop it.
_Don't tread on me._
agreed, but it would not hurt to give them a little "shove" in the right direction.
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
I say we lead by example and adopt more open trade UNILATERALLY. It may sound a bit quixotic but I feel we'll be better for it both in principle and results. We have protectionist policies ourselves, many of them, so we aren't exactly in a position to talk as much as some would like.
_Don't tread on me._
What is it with the congress and the terrible immigration bill that they are trying to convince Americans that it is so good.
We had one passed last year and it was not enforced. How is this one going to make any difference except to allow millions of illegal alliens to come to the US.
This is crazy. Something has to be done and congress needs to pull up their boot straps and do something.
They better listen to the American people or they are going to be booted out of office. The American people are very angry about this bill.