Thread: Free Trade vs Protectionism

I'd love to. There was a great video, IOUSAthemovie.com. It talked about 4 deficits one of which was the trade deficit. Another interesting point is how America's deficit should lower the value of the dollar but because the dollar is the world "reserve currency" it's relative value is higher than it otherwise would be and this worsens our trade deficits as the see saw of deficit is value of currency trade. Another more recent debate is "free trade" v "fair trade." More than false claims of global warming, I think free trade is the best thing the industrialized countries can do for the emerging countries.

The World Trade Organization (WTO) allows any nation to impose trade restrictions on imports so long as those same restrictions apply to domestic products.

Our government has (rightly and at our direction) placed numerous restrictions on companies operating in the United States. These restrictions, in the form of U.S. law cover:

• Child labor
• Environmental protection
• Antitrust
• Product safety
• Occupational safety and health.
• Equal opportunity
• Collective bargaining
• Intellectual property
• Minimum wage

While most Americans agree these laws place right and proper constraints on capitalism, these laws also place an economic burden on American companies that put us (and other like minded nations) at a disadvantage when we compete, both domestically and abroad, with goods and services produced by companies unfettered by such restrictions.

We can do little to force sovereign nations to follow American law; however, we can and should, under WTO rules, require that products imported to our nation be produced under the same standards as those produced in America, or, be subject to normalization tariffs. It is necessary to fair competition between foreign and domestic goods in the American market.

Otherwise we condemn children, not protected by child labor laws, to slavery in squalid third world sweat shops.

Otherwise we are complicit in the ravishing of the world’s ecosystem by short sighted companies and nations unconcerned with the global impact of their actions on our shared environment.

Otherwise we allow corporate cartels, or trusts, to rule whole segments of the global marketplace and give them the power to fix prices, manipulate supply, and declare embargos for political motives.

Otherwise we put Americans at risk from unsafe imports.

Otherwise we contribute to a system that maims and kills workers in unsafe factories so that the owners may sell their wares more cheaply than we can.

Otherwise we deny economic liberty to women and ethnic minorities living in nations that do not value them.

Otherwise we deny workers in unenlightened nations the power to bargain for a legitimate share of the profits their labors produce.

Otherwise we allow our technological innovations, art, and other intellectual property to be stolen and sold back to us.

Otherwise we price American workers out of the global labor market and reward foreign companies for paying workers wages that Americans, by law, recognize as unconscionable.

Originally Posted by teaser47401

The World Trade Organization (WTO) allows any nation to impose trade restrictions on imports so long as those same restrictions apply to domestic products.

Our government has (rightly and at our direction) placed numerous restrictions on companies operating in the United States. These restrictions, in the form of U.S. law cover:

• Child labor
• Environmental protection
• Antitrust
• Product safety
• Occupational safety and health.
• Equal opportunity
• Collective bargaining
• Intellectual property
• Minimum wage

While most Americans agree these laws place right and proper constraints on capitalism, these laws also place an economic burden on American companies that put us (and other like minded nations) at a disadvantage when we compete, both domestically and abroad, with goods and services produced by companies unfettered by such restrictions.

We can do little to force sovereign nations to follow American law; however, we can and should, under WTO rules, require that products imported to our nation be produced under the same standards as those produced in America, or, be subject to normalization tariffs. It is necessary to fair competition between foreign and domestic goods in the American market.

Otherwise we condemn children, not protected by child labor laws, to slavery in squalid third world sweat shops.

Otherwise we are complicit in the ravishing of the world’s ecosystem by short sighted companies and nations unconcerned with the global impact of their actions on our shared environment.

Otherwise we allow corporate cartels, or trusts, to rule whole segments of the global marketplace and give them the power to fix prices, manipulate supply, and declare embargos for political motives.

Otherwise we put Americans at risk from unsafe imports.

Otherwise we contribute to a system that maims and kills workers in unsafe factories so that the owners may sell their wares more cheaply than we can.

Otherwise we deny economic liberty to women and ethnic minorities living in nations that do not value them.

Otherwise we deny workers in unenlightened nations the power to bargain for a legitimate share of the profits their labors produce.

Otherwise we allow our technological innovations, art, and other intellectual property to be stolen and sold back to us.

Otherwise we price American workers out of the global labor market and reward foreign companies for paying workers wages that Americans, by law, recognize as unconscionable.

Actually the US can leave the WTO and abandon trade agreements that are not beneficial to the nation ... good old founding father nationalism. No need for neo-protectionism to justify making intelligent trade.

I'd like to offer my maytag box for a mansion? No takers? That's understandable its a poor trade.

I'd like to swap the America economy for a 3rd world economy ... any takers? Oops we made that trade and now the economy is in the dumpster.

Originally Posted by teaser47401

The World Trade Organization (WTO) allows any nation to impose trade restrictions on imports so long as those same restrictions apply to domestic products.

Our government has (rightly and at our direction) placed numerous restrictions on companies operating in the United States. These restrictions, in the form of U.S. law cover:

• Child labor
• Environmental protection
• Antitrust
• Product safety
• Occupational safety and health.
• Equal opportunity
• Collective bargaining
• Intellectual property
• Minimum wage

While most Americans agree these laws place right and proper constraints on capitalism, these laws also place an economic burden on American companies that put us (and other like minded nations) at a disadvantage when we compete, both domestically and abroad, with goods and services produced by companies unfettered by such restrictions.

We can do little to force sovereign nations to follow American law; however, we can and should, under WTO rules, require that products imported to our nation be produced under the same standards as those produced in America, or, be subject to normalization tariffs. It is necessary to fair competition between foreign and domestic goods in the American market.

Otherwise we condemn children, not protected by child labor laws, to slavery in squalid third world sweat shops.

Otherwise we are complicit in the ravishing of the world’s ecosystem by short sighted companies and nations unconcerned with the global impact of their actions on our shared environment.

Otherwise we allow corporate cartels, or trusts, to rule whole segments of the global marketplace and give them the power to fix prices, manipulate supply, and declare embargos for political motives.

Otherwise we put Americans at risk from unsafe imports.

Otherwise we contribute to a system that maims and kills workers in unsafe factories so that the owners may sell their wares more cheaply than we can.

Otherwise we deny economic liberty to women and ethnic minorities living in nations that do not value them.

Otherwise we deny workers in unenlightened nations the power to bargain for a legitimate share of the profits their labors produce.

Otherwise we allow our technological innovations, art, and other intellectual property to be stolen and sold back to us.

Otherwise we price American workers out of the global labor market and reward foreign companies for paying workers wages that Americans, by law, recognize as unconscionable.

All true, unfortunately, we live a lot better by doing some of those things, and a very large segment of our population could not live at all if they didn't. The "cost of living" is, to the poor and lower middle classes, often exactly that. It's not just cheap underwear, it's choosing between necessary winter clothes and food for lots of people. And the irony is that they are often in that situation because they are being priced out of the labor market, so we hit our least well off at both ends. Do we take their jobs or raise their prices? I know, let's do BOTH.

The main thing to remember about tariffs is that they are taxes imposed on US, not foreigners, all we are doing to other nations is making them find other markets and that is not really all that hard to do nowadays. I'm not saying it's a matter of little concern, as we are like 65% of the world's consumption, but it's not impossible for China to just sell $12 shoes in France or even Iran.

This is big problem, and I really don't see any solutions.

(This is also a good discussion but should it be here? I'm not a moderator, mind, I'm just asking)

I do not buy the argument that cheap goods trump fair trade. The only reason we need cheap Chinese goods is that our standard of living has dropped due to the loss of manufacturing jobs. Place wage normalization tariffs on these goods and it becomes profitable for American companies to manufacture again. Jobs come back, more taxes are collected, social welfare costs go down, and we pay a little more for our underwear.

It is my opinion that there is no more effective stimulus package than a tariff.

John Drake states that: “The main thing to remember about tariffs is that they are taxes imposed on US, not foreigners”

Income taxes are taxes on us, corporate taxes are taxes on us, property taxes are taxes on us, buried in the cost of every product manufactured in the United States is the cost of our government. Yet NAFTA allows Mexican imports to be sold in our markets bearing virtually none of the cost of our government giving them an unfair advantage over domestic products resulting in the continued loss of our tax base and the continued increase federal deficits.

The best solution would be to institute a VAT tax (like virtually all of our trading partners) combined with removal of corporate income tax and personal income taxes for those earning less than $100,000. That plan would distribute the tax burden fairly between imports and domestic goods. Unfortunately the senate has passed a resolution decrying a VAT tax as regressive and therefore unfair.

As for this discussion being where it is, I am too new to start a “Protectionism vs. Free Trade” thread in the normal forums. If a monitor or other senior user can move this
discussion to a more appropriate place, I’m all for it.

Originally Posted by teaser47401

I do not buy the argument that cheap goods trump fair trade.

It is not about cheap but liberty. Why would anyone buy a product not made locally? One reason would be it is of a unique quality, e.g., tea grown on the Himalays. Other reason is that it offers a quantitative benefit, i.e., cheap. By allowing this option, we allow the free market to help developing countries. In my opinion, this is far preferable to giving them loans they have no means to repay and then "forgiving" the debt, i.e., transfer the debt to other people. Otherwise, we are dooming the 3rd world in joining the industrialized world any time soon.

I am not against international trade with developing counties, but I do not believe that we need to sacrifice our middle class to improve the lot of third world counties. So long as we perpetuate incentives for substandard pay, lack of environmental controls, unfair labor relations, unsafe working conditions, etc., we not only do a disservice to those developing counties, we also undercut the social goods laws restricting such practices were designed to promote in America.

Originally Posted by teaser47401

I do not buy the argument that cheap goods trump fair trade. The only reason we need cheap Chinese goods is that our standard of living has dropped due to the loss of manufacturing jobs. Place wage normalization tariffs on these goods and it becomes profitable for American companies to manufacture again. Jobs come back, more taxes are collected, social welfare costs go down, and we pay a little more for our underwear.

It is my opinion that there is no more effective stimulus package than a tariff.

John Drake states that: “The main thing to remember about tariffs is that they are taxes imposed on US, not foreigners”

Income taxes are taxes on us, corporate taxes are taxes on us, property taxes are taxes on us, buried in the cost of every product manufactured in the United States is the cost of our government. Yet NAFTA allows Mexican imports to be sold in our markets bearing virtually none of the cost of our government giving them an unfair advantage over domestic products resulting in the continued loss of our tax base and the continued increase federal deficits.

The best solution would be to institute a VAT tax (like virtually all of our trading partners) combined with removal of corporate income tax and personal income taxes for those earning less than $100,000. That plan would distribute the tax burden fairly between imports and domestic goods. Unfortunately the senate has passed a resolution decrying a VAT tax as regressive and therefore unfair.

As for this discussion being where it is, I am too new to start a “Protectionism vs. Free Trade” thread in the normal forums. If a monitor or other senior user can move this
discussion to a more appropriate place, I’m all for it.

Originally Posted by teaser47401

I am not against international trade with developing counties, but I do not believe that we need to sacrifice our middle class to improve the lot of third world counties. So long as we perpetuate incentives for substandard pay, lack of environmental controls, unfair labor relations, unsafe working conditions, etc., we not only do a disservice to those developing counties, we also undercut the social goods laws restricting such practices were designed to promote in America.

I was trying to avoid the facile rebuttal but you used it anyway so let me repeat, it is NOT just cheap underwear, it is literally the ability to afford the necessities of life for a very large number of people. You may be able to pay a hundred dollars for a part for your car that now costs 10, or afford socks at $25 that now cost $5 or less. Many cannot

Your tax plan is half right, whatever costs the solution imposes should be borne mainly by the rich. I'll agree with you on that since they got rich by exporting our jobs in the first place, but I don't see how tariffs, which not only make our goods noncompetitive in foreign markets but cause foreign countries to raise tariffs in return, will result in the return of manufacturing jobs. People without money cannot buy anything, so a solution which would do nothing to stop foreigners from selling elsewhere but simply raise OUR prices across the board in TWO ways (that is, both with tariffs AND a VAT) seems to make little sense.

Originally Posted by John Drake

Your tax plan is half right, whatever costs the solution imposes should be borne mainly by the rich..

So much for equality.

the solution imposes should be borne mainly by ... women.

the solution imposes should be borne mainly by ... Blacks.

the solution imposes should be borne mainly by ... the handicap.

the solution imposes should be borne mainly by ... minorites.

the solution imposes should be borne mainly by ... the uneducated.

the solution imposes should be borne mainly by ... some subset of society that is considered a sacrifcial animal today.

I understand that increasing prices on the poor seems cruel. However, the solution to poverty is not found in importing cheaper and cheaper goods so the poor can afford to live on a piddling welfare stipend, it is through insuring them opportunities to earn a decent living. So long as prices in this country are so low that production of goods cannot support a living wage, unemployment will continue to rise and the standard of living for the majority of Americans will fall.

However, lest you think me completely heartless, I also support FDR’s plan to guarantee a job opportunity to every adult American (jobs paid for by tariffs).

Originally Posted by JohnLocke

So much for equality.

the solution imposes should be borne mainly by ... women.

the solution imposes should be borne mainly by ... Blacks.

the solution imposes should be borne mainly by ... the handicap.

the solution imposes should be borne mainly by ... minorites.

the solution imposes should be borne mainly by ... the uneducated.

the solution imposes should be borne mainly by ... some subset of society that is considered a sacrifcial animal today.

Originally Posted by teaser47401

I understand that increasing prices on the poor seems cruel. However, the solution to poverty is not found in importing cheaper and cheaper goods so the poor can afford to live on a piddling welfare stipend, it is through insuring them opportunities to earn a decent living. So long as prices in this country are so low that production of goods cannot support a living wage, unemployment will continue to rise and the standard of living for the majority of Americans will fall.

However, lest you think me completely heartless, I also support FDR’s plan to guarantee a job opportunity to every adult American (jobs paid for by tariffs).

I don't understand either the reference to sacrificial animals or cruelty. I think the rich should bear the main burden of the costs mainly because they have it, and the both of you need to rethink the practicality of deriving blood from turnips.

Originally Posted by John Drake

I don't understand either the reference to sacrificial animals or cruelty. I think the rich should bear the main burden of the costs mainly because they have it, and the both of you need to rethink the practicality of deriving blood from turnips.

That is because you are thinking of economic activity as something only the government initiates and ought to get their $ from the rich to start the entire process. I do not know about teaser47401 but I am focusing on a system that most benefits the working poor - the producers of 'cheap products' we might acquire from 3rd world countries. By imposing punitive taxes via 'fair trade' policies there is no benefit to these working poor as their products have no financial advantage over high paying union jobs.

Ok John you threw me for a loop there. High paying union jobs is what I’m all about. When I was growing up in Detroit in the 60’s, American was at its Zenith. Unions were a watermark I’d like to get back there before I leave this world.

Can’t have them when people are willing to work for next to nothing overseas and the government lets their products in without penalty.