Posted on 04/07/2004 10:14:34 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
The Bush administration is hailing its new planned Central American Free Trade Agreement as a “cutting edge” trade deal that will “expand U.S. opportunities in an important regional market.” Instead, CAFTA shows that U.S. trade policy has become completely divorced from the main needs of the U.S. economy, U.S. manufacturers, and American workers.
New markets for American products would indeed greatly benefit a U.S. economy still fragile after three sluggish years and a manufacturing sector that remains severely depressed. But the idea that the five Central American signatories of CAFTA can become these new markets doesn´t pass the laugh test.
El Salvador, Guatemala, Honduras, Nicaragua, and Costa Rica are not only among the world´s poorest countries, they´re among its smallest economies as well. Measured by their ability to buy U.S. products, their combined economic output totaled only $62 billion, according to the latest (2002) data. That´s less than the output of Orlando, Fla. or Bergen County, N.J.
The collective economies of the five Central American CAFTA countries are also half the size of San Diego and Phoenix. And U.S. Trade Representative Robert Zoellick´s decision to tack the Dominican Republic onto CAFTA doesn´t help much. Adding its $23.2 billion economy to the Central American 5 creates a total market still smaller than the economies of the metropolitan areas of Tampa-St. Petersburg, Fla., San Jose, Cal., and St. Louis, Mo. ($87.5 billion, $88.3 billion, and $92.2 billion, respectively).
How in the world can economies this small, filled with people so poor, be important markets for U.S. exports, and growth engines for the $10 trillion U.S. economy?
Recent experience, however, teaches that poor, tiny countries can become major suppliers for the U.S. market, especially if CAFTA-like trade deals attract export-oriented investment seeking penny-wage workforces lacking the right to press for decent pay and working conditions. For example, from 1996 to 2003, U.S. goods imports from the six countries in question rose by nearly 63 percent, to $16.862 billion. U.S. goods exports to these countries increased by a seemingly healthy 51 percent during this period. But many of these shipments consisted of fabric sent to Central America for sewing once done in the United States, then returned to America to be sold as final products.
Essentially, U.S. companies are exporting to Central America the materials for garment production work that used to be done in U.S. factories. The results? No new final markets for U.S.-made products, the loss of tens of thousands of working-class American jobs, and higher U.S. trade deficits and international debts. At a time when manufacturing employment is feeble, U.S. debts are nearing alarming levels, and the dollar´s future strength consequently is in doubt, these are the last outcomes America needs.
The CAFTA countries won´t benefit from the new deal, either. The U.S. market for the labor-intensive goods they need to specialize in is already saturated with the imports of all the other third world countries and regions that have recently expanded trade with America – notably China. As no less than the U.S. International Trade Commission has recently reported, when global apparel quotas are removed in January, 2005, the Central Americans will face even more competitive pressure from China and its virtually endless supply of cheap labor.
The Bush administration could help workers in the United States and at least some third world regions if it would limit overall imports by setting some trade liberalization priorities. That way, the main trade liberalization benefits for third worlders could be channeled to countries of special interest – like our hemispheric neighbors in Central America or Mexico or the Caribbean.
But the White House has so far refused, and once the quotas come off, its message to Central America will undoubtedly be the same as its recent message to African exporters worried about Chinese competition: That´s your problem.
To revive its manufacturing sector and all the economic and national security benefits it generates, the United States urgently needs a new set of trade policies. Defeating the misguided Central American Free Trade Agreement is the place to start.
Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).
I'm voting Constitution Party, and wish more people would.
Remember the "good ol' days" when we had a real choice? Those days seem to be gone.
I see.
Well, in that case, all the problems go away if we outsource the Gummint and build a wall at the border, eh?
BTW, ALL treaties supercede the provisions of the Constitution. Thus, a treaty is enforceable at law in ALL States of the Union, regardless of contrary Constitutional provisions, should there be any.
THAT'S how FTAA affects the Constitution--it's like the Supremes--it over-rides it.
And Arthur Andersen signed off on those figures, so they have to true, right?
And Arthur Andersen signed off on those figures, so they have to true, right?
There are things that damage two countries --- once NAFTA was signed, hundreds of thousands of Americans lost their jobs --- many still are not working today and likely will never work again because replacement jobs never came. Millions of Mexicans lost their jobs and are now so desperate that a million move to the USA each year, hundreds willing to die to get here ---- post NAFTA of course. Immigration from Mexico before NAFTA was a trickle.
Thai hookers, French wine, gold, and Spanish olives.
So, we buy foreign goods and the sellers never buy American goods with their dollars. Sounds like we can print all the dollars (IOU's) we want and they'll never be redeemed.
And that's bad how?
Can you name some of those countries doing better than the U.S.?
Well, in terms of ecomonic GROWTH, China comes to mind. Growth in excess of 12% last year, highly restrictive import policies...
Where did you get that 12% growth number? Hmmmm...from the Communist Chinese government? Yeah that's probably a trustworthy source. And my question was name countries doing better than the U.S. not countries growing faster than the U.S.
Now if China really did grow at 12% a year and the U.S. grew at 4.1% a year, how long would it take for their per capita GDP to match ours?
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