Yes, there are losers, but we all gain from free trade

Indianapolis Star ^ | 14 January 2004 | Peter Z. Grossman

[Viva Le Dissention]

There is one subject that truly separates professional economists from everyone else. Nearly all economists -- conservatives and liberals alike -- agree that free international trade is good, and the freer you make trade the better. But polls often show the public at large supports trade barriers.

[gathersnomoss]

"Tell me why I should buy inferior products at higher prices in order so that a less efficient company should remain in business?"

If it were the 70's, I would offer you a great deal on a Chevy Vega. Point taken.

[hedgetrimmer]

Lets talk about making goofy statements with no regard to facts.

Its not goofy to say that chinese workers make pennies a day , $0.35 per hour or good ones, $0.56 per hour for a factory worker.

Let's discuss the real problem Americans face, instead of throwing insults.

[gathersnomoss]

"Ok everybody, dump your homes and families and go live in a dormitory. Its the only way to make the "capitalists" invest in our country!"

I hope this is not the case in what I see as my childrens future. They must all learn to become self sufficient and NOT depend on a corporate paycheck. Which brings the point, what will happen to US corporations as we know them today?

[sixmil]

I am a slave to the US government. I work a huge part of each day and each year to feed government schemes, like protectionist tariffs.

More free trade lies. You have never once paid a tariff in your life, yet I am sure you look forward to filing income taxes every year and sharing your banking records with uncle Sam. P.S. - When you say protectionist tariffs, is that overly redundant, or do you believe it possible to have a tariff that is not protectionist?

[JOAT]

if we continue to slide into debt as individual households

Suggest you not do it.

Thank you for your concern. I am not. However our fellow consumptionist citizens are.

I may be exercising monetary restraint, but when a large percentage of the sheep are not, and they clearly are not, they will drag me down with them.

That is a corollary to the principle at work here. When large segments of my fellow countrymen are underemployed or downright unemployed it hurts the entire nation.

The 'Free Trade' mantra says tough shiite, you need to adapt and retrain. Retraining sounds good on paper, but is in reality not likely. But good solid Free Traders turn a blind eye and say "Yes some will suffer but the hive will prosper."

Well that's nice and all, and sounds very defensible and conservative to some, but is quite short-sighted if you can't match the multinationals and just leave here when things get rough and go live where ever you like.

Eventually the trend will affect your employment. Many I.T. guys used to sneer at the common worker who was unemployed and chant the Free Trade Mantra. Gee, now that their jobs are migrating 'offshore' the tune seems to have changed. Like the old proverb says: It depends on whose ox is being gored.

[Protagoras]

Let's discuss the real problem Americans face, instead of throwing insults.

That's rich coming from someone who has used every childish debating tactic in the book so far.

You made statements which you concocted out of thin air. I called you on it. Instead of just moving on, you started all this other nonsense.

Your point that people in some other countries make less than people in some other countries is obvious. It proves nothing. Everyone concedes it, now make a case that matters to the point.

[Protagoras]

More free trade lies.

What part of this is a lie?

You have never once paid a tariff in your life,

Incorrect.

I am sure you look forward to filing income taxes every year and sharing your banking records with uncle Sam.

Incorrect again.

When you say protectionist tariffs, is that overly redundant, or do you believe it possible to have a tariff that is not protectionist?

It is possible to have flat uniform tariffs. Protectionist tariffs are different than that.

[hedgetrimmer]

Incorrect.

How about substantiating your answer.

[sixmil]

Uh, actually, no. All disciplines model complex systems. It's the only way to talk about the system as a whole. As opposed to talking about the part of the system that you see from your seat.

BS. A model is only useful if after developed, it closely matchs the real world. This is why yous guys always focus on the model and not the real world, because they are two different things. One of the clearest examples of this is how free traders (Greensapn included) are convinced that the trade deficit will balance itself. Sometimes they think it is devaluation, other times they talk inflation, but one thing is certain, the trade deficit continues to widen and prove them wrong. At this point some free traders, honest enough to admit they are wrong, but still too proud to surrender, will simply say that the trade deficit does not matter. Are you there yet?

[sixmil]

Who forced you to do that?

Are you avoiding the question by turning it back to me? Unlike you, I can answer it. American trade policy is forcing me to buy cheap foreign goods. I used to be able to buy clothes without having to worry about buttons falling off. Now, no matter how much I spend, I still need to keep around a sewing kit. No matter where I go, when I turn over the label, it is not made in America, but it used to be.

[Viva Le Dissention]

Likewise, corporations do not have a right to cheap labor

This will be a quick post in advance, because I have to run--but I agree with you that corporations do not have a right to cheap labor, but they DO have the right to bid for labor in the market without any governmental restrictions.

When the government steps in and says that certain labor is "off-limits" in the labor market, it side-steps laissez-faire economics in favor of a model that creates inefficient markets and waste.

If someone is willing to perform a job, at the same level of quality for a lower price than someone else, why shouldn't I, as an employer, hire that person?

[sixmil]

It is possible to have flat uniform tariffs. Protectionist tariffs are different than that.

Alright, now we are getting somewhere. At what point do you think a flat, uniform tariff would go from being just a tariff to a protectionist tariff? 5%? 10%? 50%?

PS - What tariff was it that you paid? Did you bring in more than $500 gifts from vacation?

[looscnnn]

At least I speculated, I get psychics that tell me how I have voted or will vote, etc.

[Protagoras]

At what point do you think a flat, uniform tariff would go from being just a tariff to a protectionist tariff? 5%? 10%? 50%?

The level is not the determining factor. Think uniform.

I have paid tariffs directly many times. I am a businessman. Which is, however, irrelevant since everyone pays them indirectly.

[Protagoras]

At least I speculated, I get psychics that tell me how I have voted or will vote, etc.

Everyone has his own thing I guess. Is it more fun to guess and have others tell you from little voices in their heads, or just find out?

[sixmil]

If someone is willing to perform a job, at the same level of quality for a lower price than someone else, why shouldn't I, as an employer, hire that person?

Everything sounds logical, but I don't know if you are talking about a borderless world, or we are just talking about copnditions within one nation's borders. One of the big problems with free trade for me is that it assumes a world with almost no borders, which does not yet exist. The borders between countries (not just political) are very real and show no sign of just disappearing anytime soon, although most people agree that borders will eventually disappear. The problem is that free traders want to either get rid of these borders, or just pretend that they do not exist. Either way, they are not dealing with the reality of the world that surrounds us.

Personally, I am not against free trade, just the current brand of it. If you want real free trade, then do what our colonies did and form a new political union emcompassing a single trade zone. Obviously this will not succeed on a global level, but it might on a smaller scaller, which could be repeated over and over until the entire wold is part of one system. What we currently do, is a half-assed measure where we give up access to our market in exchange for access to another's market. Our only barrier is tariffs, so we drop those. The other side has all sorts of different barriers, but only agree to give up some tariffs. Eventually we end up with one way trade that benefits corporations directly and some people indirectly.

[sixmil]

I have paid tariffs directly many times. I am a businessman. Which is, however, irrelevant since everyone pays them indirectly.

I disagree. If I got to pay income taxes indirectly, it would save me hours and hours of time and many headaches.

[hedgetrimmer]

There is certain labor that is off limits in American labor markets. That is slave labor and it was outlawed by the XIII amendment to the United States Constitution.

Yet, slave labor is used in China with the blessing of the WTO, the "free traders" and our own government who does not deny entry of goods made by slave laborers.

The Reciprocal Trade Act of the 1930s reads, “Forced labor, as herein used, shall mean all work or service which is exacted from any person under the menace of any penalty for its nonperformance, and for which the worker does not offer himself voluntarily.”

But reciprocal trade is no longer enforced in the many "free trade" agreements brokered by NAFTA and the WTO,with their zero tariff, zero trade barrier policies toward the United States.

Now chinese slave labor factories export to America with impugnity.
***
A manager at Shanghai’s Laodong Machinery Plant, where hand tools were made, boasted that because the U.S. Congress had recently made “quite a fuss” about the prison camps, he and his bosses had devised a way to get around the problem.

“We always go through the import-export company,” he said, meaning they set up companies to handle the shipment of goods. That way nobody quite knows where the goods came from.

there are an estimated 50 million blue uniformed “troublemakers” who had work in the camps under totally inhumane conditions. Some of them literally are worked to death.

The forced labor had turned out for the American market such items as rubber-soled shoes, boots, kitchenware, toys, tools, men’s and women’s clothing, and sporting goods.
--Wes Vernon

[hedgetrimmer]

If someone is willing to perform a job, at the same level of quality for a lower price than someone else, why shouldn't I, as an employer, hire that person?

As everyone in this body knows, the importation of goods made by convicts has been banned for more than a half a century. This law underscores Americans' firm conviction that such products produced by coerced and forced labor should not be sold in this country. I believe Americans are repulsed by the very thought of benefiting from cheap prices on products produced by the sweat and blood of foreign prisoners.

Despite this ban, products made in Communist China's vast archipelago of slave labor camps, known as the laogai, continue to flow into this country unabated. This system of laogai, a word meaning reform through labor, was designed for the dual purposes of political control and forced economic development. Interestingly, this system is modeled on Stalin's Soviet Gulag, which we all remember was exposed most graphically by Alexander Solzhenitsyn.

This system of forced labor, slave labor, has been an integral part of Chinese totalitarianism since the inception of the People's Republic of China in 1949. Harry Wu, a survivor of the laogai, and a friend of mine, has estimated that some 50 million Chinese men and women have passed through these camps, of whom 15 million have perished. Today, anywhere from 6 to 8 million people are captive in the 1,100 camps of laogai, held and forced to work under grossly inhumane conditions.

According to official statistics, the laogai operate 140 export enterprises selling products to over 70 nations abroad, including the United States. These enterprises are responsible for producing key commodities, including uranium, graphite, rubber, cotton, asbestos, and one-third of Chinese tea is produced in these slave labor camps, as well as a huge array of consumer goods, including toys, artificial flowers and, ironically, Christmas lights and rosaries.

When I went to China in January, I asked to visit a laogai prison. In fact, I asked every day. I asked repeatedly, and repeatedly, but my requests to visit a laogai prison were denied. Fortunately, one of my colleagues in the House on an earlier trip, Representative Frank Wolf, was able to visit Beijing Prison No. 1. This is the exterior of that prison camp that Congressman Wolf visited, a prison camp that includes a slave labor industry.

This second photo shows us the picture of the Beijing hosiery factory. This is located inside of that prison camp.

The third photo actually shows the assembly line where these products are made.

In this prison, Mr. Wolf found slave laborers producing socks on this assembly line. I have some of the very socks produced on that assembly line which Mr. Wolf brought back. You can see the socks. This particular pair was determined to be for export. This is not just a matter of laogai slave labor prisons, which would be horrific enough, that would be bad enough, but these particular products were made for export to other countries.

When I was in China, I saw many things. One thing I did not

see was any golf courses, but the logo on these socks is a person swinging a golf club, obviously not intended for sale within China but for sale on the foreign market.

Although the United States entered into binding agreements with China in 1992 and 1994 to bar trade in prison labor products and to allow inspection of its forced-labor camps, the Chinese Government has frustrated their implementation, both by using dual names to disguise camp products and by denying access to those slave labor camps.

In 1996, the Chinese Government granted access to just one prison labor camp. Out of the whole laogai system, access in 1996 was granted to only one that had been requested by the U.S. Customs Service.

Mr. President, the following two charts show examples of laogai prison camps that have never been inspected, though the request has been made to visit. These photos were taken, obviously, outside the camp. This is laogai slave labor camp No. 5 and Zhejiang laogai slave labor camp. Both of these labor camps--we have a second picture as well--show individuals going into the camp. These pictures were obtained by the Laogai Research Foundation.

Mr. President, the two most recent State Department human rights reports on China state that `Repeated delays in arranging prison labor site visits called into question the government's intention regarding the implementation of the two agreements.'

So we have two agreements with China which were to provide for inspections of these camps in which these kinds of products are made to compete with American workers. According to our State Department, we have found, instead of cooperation, obstructionism and delays in arranging for visits to those labor camps.

Obviously, I think this indicates that the Chinese Government is not intent on cooperating with us on trying to ensure that the products produced are not being sold domestically or to the foreign market and that humane conditions prevail in these camps.

The U.S. Customs Service has already banned 27 different products of laogai camps. Unfortunately, in testimony before the Senate Foreign Relations Committee, on May 22, 1997, the Customs Commissioner George Weise noted that the Customs Service is too weak and understaffed to monitor China's slave labor enterprises.

--Senator Hutchison, May 14, 1998

[Protagoras]

The final cost of subsidies is borne by everyone. In many ways. Some of which are seeming invisable.