CAFTA: Last Nail in the Coffin?

The American Conservative ^ | May 9, 2005 Issue | Patrick J. Buchanan

[A. Pole]

With U.S. prisons filling up with aliens, 10 million illegals here and counting, Californians fleeing east, savage Salvadorian gangs battling with machetes inside the Beltway, and Minutemen headed for the Arizona border, Rip Van Republican has awakened to the threat of open borders. Meanwhile, the White House dozes on.

But just as the chickens are coming home to roost on the Bush failure to defend America’s frontier, so they will soon be coming home on Bush’s embrace of free-trade fanaticism.

As I write, the Department of Commerce has just released the trade deficit numbers for February. Again, the monthly trade deficit set a record, $61 billion. In January-February 2005, the annual U.S. trade deficit was running $100 billion above the all-time record of $617 billion in 2004.

In the mail this week came the annual graphs and tables from Charles McMillion of MBG Information Services, who has patiently chronicled the decline and fall of the once-awesome U.S. industrial machine. Since 1992, when some of us urged the president’s father not to grant MFN to China, the returns are these:

• Between 1993 and 2004, the U.S. trade deficit with Beijing grew 700 percent to $162 billion.
• In the last decade, China’s total trade surplus at U.S. expense was $805 billion.
• China’s leading exports to us, which account for almost half her $162 billion trade surplus, came from shipments of computers, electrical machinery, and parts.
• Leading U.S. exports to China (Boeing alone excepted) were, in ascending order: meat, meat offal, fibers, ore, slag, ash, organic chemicals, fertilizers, copper, cereals, raw hides, skins, pulp of wood, cotton, and the big seller—oil seeds and oleaginous fruits (soybeans). All very, very high-tech stuff.

China’s surplus, the largest one nation has ever run against another, provides her with the hoard of cash to buy Russian and Western weaponry to menace Taiwan and the 7th Fleet and pile up the T-bills that give Beijing the leverage it enjoys today over the sinking U.S. dollar and shaky U.S. prosperity.

In the 1993 battle of NAFTA, the Clinton-Gore-Dole-Gingrich globalists predicted our trade surplus with Mexico would grow, Mexico would prosper, and illegal immigration would be easier to control. Either they deceived us, or they deceived themselves. For since NAFTA passed:

• The U.S. trade surplus with Mexico has vanished and the annual trade deficit is now running above $50 billion a year.
• The cumulative trade deficit with Mexico is now over $300 billion.
• 1.5 million illegal aliens are caught each year crossing our border and 500,000 make it in to take up residence and enjoy all the social programs a generous but over-taxed America can provide.

With Chrysler now a German company, GM and Ford down to less than half the U.S. auto market, and GM paper looking like Argentine bonds, Americans now import $188 billion worth of autos, trucks, and parts, three times what we export. Motown is no more king of the road.

With three million manufacturing jobs lost under Bush, the U.S. dollar looking like Monopoly money, trade deficits exploding, and our dependence on foreigners for oil, the critical components of our weapons, and the cash to finance our insatiable appetite for consumer goods all growing, one would think even Bush Republicans might pause before taking another great leap forward into a future of global free trade. One would be wrong.

For CAFTA, son of NAFTA, is at hand: the Central American Free Trade Agreement. The White House will bring it up, but only if enough Republicans can be bamboozled into going along. In return for access to our market, we get access to five Central American markets and the Dominican Republic—with a total economy the size of New Haven’s—47 million consumers, half of whom are living in poverty by their standards.

The highest per capita income in Central America is $9,000 a year in Costa Rica, which is less than the U.S. minimum wage. But CAFTA will enable agribusiness and transnational companies to set up shop in Central America to dump into the U.S. and drive our last family farmers out of business and kill our last manufacturing jobs in textile and apparel.

If there are any Reagan Democrats left still loyal to the GOP, CAFTA may see them off. For if the GOP passes CAFTA over Democratic opposition, Hillary’s party may just be able to take back North Carolina, Ohio, and a couple of bright red farm states as well.

[Toddsterpatriot]

SwankyC is one of those guys who thinks WalMart sells no American goods. His definitions are suspect.

[1rudeboy]

I felt a great disturbance in the Force, as if millions of voices suddenly cried
out in terror and were suddenly silenced.
As if some plastic lawn furniture was just sold at Wal-Mart.

[ninenot]

Actual facts are lost on some...

You may take that personally!

[Toddsterpatriot]

Actual facts are lost on some...

Have you ever provided any???

[1rudeboy]

Actual facts are lost on some....

I think you meant to say "lost on me," or rather, "whatever the actual facts are, I lost them."

[staytrue]

"we used to make money by making things, now we make money on money"

In the old days, you made something and sold it at a profit. Now you make something, sell it at cost and make money on financing it. At least that is how the car companies do it.

[staytrue]

"a great many people here will ignore or ridicule it...the consequences of free traitin'"

FREE TRAITIN

Now who is doing the ridiculing ?

[staytrue]

FYI Pat has gone gone gone.

"GM and Ford down to less than half the U.S. auto market, and GM paper looking like Argentine bonds, Americans now import $188 billion worth of autos, trucks, and parts, three times what we export. Motown is no more king of the road. "

What Pat does not tell you is that previous union contracts have saddled GM and Ford with huge costs so they can not invest as much in new technology or product development.

The car companies demise is not due to trade, free or otherwise. The companies management and unions stink and turn out inferior cars.

[staytrue]

how does it benefit the people of this nation to abandon an economic system has been proved viable

You are refering to the glory days of the US. The glory days were after WWII when the world's manufacturing base was in shambles except for the US. Further, the glory days had low regulation on business and probably 1/100 as many lawsuits and/or lawyers.

Free trade is the way to go and only looks bad compared to the 1950's which were prosperous times for very different reasons and not protectionism.

[staytrue]

There's no gray area there - you either want open borders or you want them sealed.

Immigration with quotas at some level or a guest worker program is in fact a GRAY AREA.

[iconoclast]

when we sell more, it means more jobs for us.

Well, you've swallowed the koolaid alright, but when we buy more than we sell, it means fewer jobs .... and the jobs left are paying less because of the influx of cheap labor.

How in the world does the average American (like Bush's old lady with the three jobs) come out ahead while competing against incredibly cheap labor abroad and falling wage rates at home.

Meanwhile the top 5% (you don't even wanna think about the top 1%) watches with glee as there annual incomes increase at rates that are HUGE multiples of that of the peons.

At the same time you count yourself blessed because you just bought a shiny new power mower at WalMart.

BTW, interesting word if you're into irony, peon.

[eskimo]

As usual, rudie's using a sleight-of-hand set of stats.

Seems the more rabid shills for the present "free trade" farce have the fewest rational answers to the most important questions. All they seem to offer is emotional fits, probably born out of the lust for profits.

Even the most devout political proponents of this shameful hoax do not even try to justify their extra-constitutional treachery by use of any historical fact because no facts pertain favorably. The absolute futility of allowing these greed-sick administrators to continue the destruction of America is becoming so evident that remarkable change can not be far away.

[staytrue]

In this free trade world what exactly is America specializing in that can't be done by Ram or Chan or Felix overseas at much cheaper cost ?

Look up Law of Comparative Advantage and you will find that this is an irrelevent argument.

In other words, a brain surgeon can do brain surgery and house cleaning cheaper than everyone else in the world. It will still pay for him to hire someone to do the housecleaning even if he can do it cheaper himself.

[staytrue]

our (American) way of life incidentally, must turn into brutal regimes to provide for basic needs of their peoples.

Brutal regimes are notoriously bad at providing the basic needs of the people. Stalin, N.Korea of today, China in the 1960's were are brutal and totally ineffective.

Most likely is the American way of life will spread to other countries and in fact, you can see this happening around the world.

[ninenot]

Maybe. That's GM's line, anyway, and they are sticking to it...

But the Detroit News also opines that GM's product line sucks, which is why nobody is buying their cars.

Falling sales will exacerbate GM's cost problems, just as rising sales will ameliorate them.

[Sam the Sham]

But what about that half of or so of the American labor force that isn't brain surgeons ? That half or so that does exactly the same work that Ram or Chan or Felix do but at a tenth of the cost. They have NO comparative advantage.

The brain surgeon is in cheap labor paradise because the AMA controls entry into the medical marketplace and will not allow foreign doctors to drive down the fees of American doctors. Everyone else is not.

[Toddsterpatriot]

Even the most devout political proponents of this shameful hoax do not even try to justify their extra-constitutional treachery by use of any historical fact because no facts pertain favorably.

Extra-constitutional treachery? I suppose you can provide examples?

[staytrue]

It also proves the point that the free traders promote socialism, not individual rights and personal freedom

Free Trade is about buying goods and services from whoever you want and selling your own to whoever you want without interference from the govt.

[eskimo]

Extra-constitutional treachery? I suppose you can provide examples?

Tell us all when NAFTA and GATT were ratified.

[staytrue]

But to make more, you'd put me out of work (and have, I might add). That's when your rights walked on mine

Only a socialist would argue that everyone and you in particular are entitled to have a job. A job is where you do something that someone wants to pay you for.