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.

[William Terrell]

I think all you "free trade" people are missing the whole point of trade to benefit the citizens of a nation.

A person needs certain categories of things to continue life: security (ranging from personal to a planetary), food (ranging from cornbread to haute cuisine), clothing (ranging from loin cloths to spacesuits) and shelter (ranging from hut to hall), entertainment (ranging from cards to digital experiences).

If left alone anywhere on the Earth, an individual would seek out these things. By getting together in tribes, states and nations, individuals can work together to get more of these things, and better.

In any large group of people, a nation perhaps, individuals thereof get right to work learning how to make items from one or more of the categories. Others put together ways to broadcast the items. By providing what someone else needs, and with the help of a medium of exchange, an individual can trade his items for some of the medium and use it to acquire needs from any category.

The ability to acquire items to satisfy the needs in each category depends entirely upon working in either the production of distribution of same. Since the economy is simply trading with one another, price is indexed by cost of the labor, and most items of each category is reachable by everyone.

Thusly does the group, or nation, serve the only conceivable reason for its existence.

In our history until the present, plus or minus a couple decades, we in this nation made what we needed, buying and selling to each other. The national fare was spiced with imports of sundry items, and we sold some surplus internationally. As a matter of fact, we build a wealthy and powerful nation doing precisely that.

This above method, "protectionism", of benefiting the individuals that make up a nation is founded in dependency of each on all of common goal, and has been proven to work to the enrichment of all involved. The method, "free trade", of benefiting those same individuals is founded in dependency of each to others of different, and potentially threatening, goals.

If we are going to call ourselves "conservatives", we need to do what conservatives do, enshrine in custom and practice that which we know works.

Tell me, how does it benefit the people of this nation to abandon an economic system has been proved viable, and embracing one that is experimental and dangerous on it very face?

[A. Pole]

While I am touched by your concern for Mexican peasants [...] Record levels of exports to Mexico in 2000 include red meats, processed fruits and vegetables, poultry meat, snack foods, fresh fruits, feeds and fodder and rice [...]U.S. corn volume exports increased eighteen-fold to Mexico. Mexico chose to expedite its market openings for corn under NAFTA

You illustrate my point well. This huge increase of imports replaces the domestic Mexican productions which was very "inefficient" ie it provide subsistence for the millions of farmers/peasants. It was the fundation of their life for countless generations (many of them being in business before Columbus!).

Now they are made redundant - the flood the cities and part of this huge human wave is crossing the US southern border. According to the free market ideology it is a great thing - it improves the bottom line of transnational agrobusiness, it lower consumer prices a little and provides a lot of cheap labor in cities. The destruction, dislocation, hidden costs and destabilization are not calculated by the freetraders since their calculation formulas are too primitive to take into account more than couple items.

You think that it is noble and pious on you side to disregard lowly Mexican peasants or US taxpayers/woekers or the future of both countries so long as the false dogmas of free market cult are adhered to.

[A. Pole]

CAFTA allow US goods to be sold there without a tariff imposed on them. Explain to me how that is a bad thing.

Read my post number 42.

Removal of the economical barriers is like removing the natural barriers inside/outside of the living organisms. It speeds up the metabolism, facilitates the fast movement of stuff. You freetraders must LOVE the Ebola virus.

[Sam the Sham]

Precisely. Free trade dogma takes no account of societal overhead which makes the bargain, overall, not worth it.

Some poster earlier argued that free trade is about cheapest possible goods, not jobs. To consider the productive capacity of your economy and the prosperity of its citizens an afterthought is increadibly foolishly shortsighted. There is such a thing as eating your seed grain.

What amazes me is how free trade shills like to yell "commie", as if there were something in the least bit conservative about free trade dogma (yeah, tell me about those commies Hamilton, Lincoln, McKinley, Taft, and Teddy Roosevelt), when it is they who exhibit a Leninist determination to sacrifice the lives and wellbeing of millions to their "scientific theory" of the perfect world.

[Sterco]

I seem to remember this quote "You send us jobs or we send you Mexicans". We sent the jobs big time and guess what.... the Mexicans are still coming. NO MORE DEALS!!!

[datura]

None of this entire argument hs anything to do with "Free Trade". It's all aout globalization. The free traders want to distract everyone with their shifting of our economic foundations while they take away our ability to remain as the world's leader as quickly as possible. They realize that there is little time do accomplish this before we wake up. They occupy both sides of the political aisle, and the only real threat they face is "We The People" waking up to them.

And I'm sorry to say this, but our President (who I supported 100% against his alternative, and still would given the comparison), is the perfect salesman for the globalists. Don't just listen to the speeches - check the legislation he signs and steers, as well as Executive Orders. He's lulling us into complacency - but the border issue tells it all. There's no gray area there - you either want open borders or you want them sealed. Open borders = globalist outlook.

It's no different than having a burglar in your home while you are sleeping - they have to move fast, and quietly since they are unarmed. Once we wake up and grab our guns, they're screwed.

WAKE UP!!!!

[Dog Gone]

Your concern to protect the lifestyle of the Mexican peasant is touching.

Some of us would like to remove that class altogether and give underdeveloped countries a vibrant middle class.

[A. Pole]

Some of us would like to remove that class altogether and give underdeveloped countries a vibrant middle class.

And the way is to push the peasants into the slums?

[LjubivojeRadosavljevic]

Okay, let me explain.

Suppose you and I are trapped on an island. Let's assume that two tasks are to be completed for our survival - fishing and building shelter. Let's also assume that you are better than I at both tasks e.g. it takes you 10 (20) hours to catch a fish dinner (build a thatched hut) whereas it takes me 15 (45) hours to complete both tasks.

Now, according to Adam Smith's logic you should move away from me as far as possible and do fishing and shelter building on your own.

But Smith's logic is incorrect. What we should do is split the chores.

Let's first determine how many fish dinners and huts we could build on our own. Let's assume that during a year you and I work a total of 2000 and 3600 hours, respectively. If you spend 1000 hours on fishing (and the other 1000 on hut building) you will garner 100 fish dinners and have built 50 huts. If I spend 1800 hours on fishing (and the other 1800 on hut building) I'll have 120 dinners and 40 huts.

Thus, the total number of fish dinners and huts on the island are 220 and 90.

What happens if we specialize (i.e., comparative advantage, free trade)? If you spend all your time building huts, you will construct 100. If I spend all my time fishing I will garner 240 fish dinners. Hence, the island has increased ouput dramatically just by specializing, even though I was far less competent at both tasks.

This is the fundemental argument for free trade. It's often misunderstood because it's counterintuitive.

[datura]

Mexico has had 500+ years to develop a "middle class". So why the hell should we eliminate our middle class in order to provide them with one? Why "level the playing field" at the expense of only the US? Our forefathers gave their lives to build that advantage for us - the arsenal of the free world - so that we wouldn't have to face the sacrifices that they did during WWII. But no, you greedy short sighted money worshippers had to cash in your profits.

I used to own a CNC machine shop making parts for Boeing. It was long hours of highly technical work, for moderate pay. "Free trade" sent my work offshore to nations that subsidize that industry. Now I'm a farmer and logger - hard physical work, dangerous, and I make less money. Thanks for the promotion, free traders. The consolation I'll get when you stock market parasites fail and are forced into the world of real work won't be satisfaction enough. But when that bottom does fall out of our economy and those stocks are worth less than toilet paper, I'll be really curious as to what it is that you'll use to buy food from us with.

[Sterco]

Let me ask a question. Why does the American worker always get hosed so bad on such a good deal?

[panaxanax]

Many millions of Americans will agree with what you just stated. Me for one!

It is all about globalization and globalization leads to world Socialism, which is when the "One World Government" headed by the U.N. takes over. It's been the big plan since the forties and we just keep falling in line and voting for the 'Lesser of Two Evils'.

I agree, WAKE UP AMERICA!!!!!!!!!!!

[datura]

Nice analogy, but fundamentally incorrect. In your example, you are producing things. In today's world of globalization, we are being forced to no longer produce anything of value except information. We won't be able to build the things we design any longer.

That's sheer idiocy. It insures that we become dependent upon other nations who have agendas far different than our own. We didn't claw our way to the top of the heap in order to just give it back to those who would destroy us.

[B4Ranch]

>>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. <<

Suicide is too strong a word just yet. Surrendering to China seems to be the goal of this Administration.

Has anybody taken a Money Management course in Washington in the past 5 years? Do they even know those courses are available?

[datura]

Thank you. I'm glad I'm not alone out here.

[Pillows]

Bump--till I get a reasonable sound answer on why this is really happening.

[LjubivojeRadosavljevic]

["Why does the American worker always get hosed so bad on such a good deal?"]

Typically, because of inappropriate govenment intervention (tax and spend policies) into the macroeconomy that ulitmately creates market (price) distortions and thus hurts the consumers.

[datura]

I'm with you on that - I got used to thinking of the government in an adversarial role during the Clinton years, and was hoping that things had changed. I'm sad to see that I was wrong. The government is on the government's side, military excluded. The military is made up of patriotic individuals like us, thank God, should push ever come to shove.

Globalization is merely the NWO in an incremental manner. It must be stopped.

[B4Ranch]

>>>>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. <<

Where in the Sam Hell are all these poor Mexican "immigrants" going to find jobs when our last family farmers out of business and kill our last manufacturing jobs in textile and apparel.

[eskimo]

This is the fundemental argument for free trade. It's often misunderstood because it's counterintuitive.

When the claimed "counterintuitive" obviously becomes a "counterhistorical", "counterlogical", "counterproductive", "counterfreedom" farce one has to cease allowing it any benifit of doubt.