The Therapy Sessions
Friday, June 17, 2005
The case for CAFTA
I'm thinking of a product produced both in the US and abroad. See if you can guess what it is.
Foreign countries can produce this product very cheaply. They have been doing so, and our American production facilities have been virtually wiped out.
These foreign producers are often state-owned, receiving unfair help from foreign governments. This help is a factor in enabling foreign producers to keep this product at prices that American producers cannot match.
To make matters worse, the states that profit from selling this product to American consumers are involed in crime. Undoubtedly, some of this money is going to people who want to kill us.
It is completely unfair. There should be boycotts! Trade protections! It is a slam dunk case for import quotas and tariffs! Those state subsidies alone would make an excellent WTO case, wouldn't they?
Why isn't our government going full throttle to implement policies to protect from this devastating import?
In truth, the government is doing NOTHING. Because the product is OIL. And without affordable oil, a modern economy grinds to a halt.
Even Chimpy McHallibush can figure that out.
The economy benefits - and our standard of living is increased by - EVERYTHING we import. Cheap foreign steel makes it more economical to build factories, stores and offices. Cheap food makes it easier to feed a family. Foreign cotton and textiles makes our clothing more affordable. Foreign cars make transportation more reliable and cheaper, even for the poor.
A land with plentiful skilled workers with a high - but affordable - standard of living is a good investment climate. This is why Japanese automakers are building their plants here and not in Japan. The US is a relatively cheap place to live and invest.
This is one reason why CAFTA is important. Free trade will increase the affordable standard of living of the American worker.
That means more - not less - jobs.
NAFTA opponents claimed that jobs would be "sucked away" to Mexico in the nineties. Can we admit that they were wrong? The 1990's was one of the sustained job booms in American history, and unemployment is still very low today.
It is trade protection - not free trade - that kills jobs. And it is trade protection that causes the greatest corruption of government policy by corporations.
Pick up a can of soda. Read the ingredients. Chances are excellent that it has been sweetened by corn syrup. In every other country in the world, soda is sweetened by sugar. But in the US, it is too expensive to use sugar. Companies like ADM - which makes corn sweetener - push hard to keep American sugar expensive by retricting imports. It is a good deal for domestic sugar producers, but it is a terrible deal for everyone else. Food producers who need access to cheap sugar - particularly candy producers - have moved to Canada. And of course, hundreds of millions Americans pay a little more in grocery bills to save the jobs of a few well off sugar producers.
In the 90's, steel producers said they needed protection. Everyone else who used steel - Boeing, GM, Ford, Caterpiller (and the rest of America's biggest manufacturing employers and exporters) - opposed the import quotas that would make steel more expensive. The steel producers won, and US exports to the world became more expensive and uncompetitive.
CAFTA will - were it to pass - help our unstable Latin American neighbors build stable economies. And the US would be well positioned to sell them tools they will need to build.
The US gets richer. Our trading partners get richer and more stable.
This is why increasing trade has always been a win-win proposal throughout history.