Can someone explain to me why trade agreements are a good idea?

[rudeguy]

Forget China, South Korea or any of the easy targets. Start me off simple with NAFTA. How does the US benefit from corporations moving manufacturing plants to Canada or Mexico? If we don't, then why don't we make it so there are penalties for doing so?

Now back to China, South Korea and other overseas countries. Why don't we charge higher import taxes to make it beneficial for companies to make things in our country?


Feel free to tear into me for my ignorance. These are things I have never understood and would like some clarification.

 

[ConstipatedVigilante]

It's easier to manufacture outside of the U.S. due to less stringent emissions regulations and cheaper labor. Since it's cheaper to manufacture overseas, the U.S. consumer benefits from lower prices here. In addition, it spurs the need for more high-skill jobs here, jobs that bring more money in and keep it here.

High import taxes might make companies more inclined to manufacture here, but it would also hurt the consumer (which is everyone). Tariffs are almost never a good thing, since everyone benefits from trade.

The U.S. still does a lot of manufacturing, it's just mostly high-end military hardware and complex machinery (ie, large turbines).

 

[dmcowen674]

Can someone explain to me why trade agreements are a good idea?

Forget China, South Korea or any of the easy targets. Start me off simple with NAFTA. How does the US benefit from corporations moving manufacturing plants to Canada or Mexico? If we don't, then why don't we make it so there are penalties for doing so?

Now back to China, South Korea and other overseas countries. Why don't we charge higher import taxes to make it beneficial for companies to make things in our country?

Feel free to tear into me for my ignorance. These are things I have never understood and would like some clarification.

They are not a good idea for the country, only for the CEO's of the Corporations benefiting from raping of the land and the people.

Those CEO's own the government so how do you put "penalties" on yourself?

 

[Infohawk]

http://en.wikipedia.org/wiki/Comparative_advantage

 

[silverpig]

They are not a good idea for the country, only for the CEO's of the Corporations benefiting from raping of the land and the people.

Those CEO's own the government so how do you put "penalties" on yourself?

Ha! Hahahahaha!

Get rid of NAFTA and enjoy your oil/water/energy/materials/lumber prices going through the roof.

Free trade benefits everyone in the end. Lower production costs and larger markets to sell in = good for everyone.

 

[dmcowen674]

Ha! Hahahahaha!

Get rid of NAFTA and enjoy your oil/water/energy/materials/lumber prices going through the roof.

Free trade benefits everyone in the end. Lower production costs and larger markets to sell in = good for everyone.

Well Jeesh, what did we do before NAFTA?

 

[frostedflakes]

Protectionism is why the United States is pretty much the only country in the world that uses HFCS as a sweetener instead of cane sugar. Consumers like you and me waste money propping up the domestic agriculture industry through the use of subsidies, tariffs, etc. If we got rid of all these artificial influences in the market, it would be cheaper to import cane sugar from countries like Brazil than to produce HFCS domestically, which would mean cheaper food for us (and this might have tertiary benefits, such as less taxpayer money being required for programs like food stamps).

Just one example of the folly of protectionism. Not to say that it doesn't have some advantages and free trade doesn't cause problems, but I think when you look at the big picture, the advantages of free trade far outweigh any disadvantages. Plus a lot of people just based on ideology don't like the idea of the government and artificial hands meddling in markets.

 

[bamacre]

Here we go again...
http://www.youtube.com/watch?v=4PQrz8F0dBI

 

[DesiPower]

It's easier to manufacture outside of the U.S. due to less stringent emissions regulations and cheaper labor. Since it's cheaper to manufacture overseas, the U.S. consumer benefits from lower prices here. In addition, it spurs the need for more high-skill jobs here, jobs that bring more money in and keep it here.

High import taxes might make companies more inclined to manufacture here, but it would also hurt the consumer (which is everyone). Tariffs are almost never a good thing, since everyone benefits from trade.

The U.S. still does a lot of manufacturing, it's just mostly high-end military hardware and complex machinery (ie, large turbines).

*trying very hard to refrain from profanity*

You cannot be serious... how exactly does moving manufacturing outside create high-skill job here???????

*trying very hard to refrain from profanity*

 

[DesiPower]

http://en.wikipedia.org/wiki/Comparative_advantage

so the idea is we are going to let shit hole countries to flood our markets with unusable junk produced by burning raw coal anyways... and then we want to encourage companies in US to reduce the quality of their products and increase emission (outside US)!! that's a wonderful idea... meanwhile there will be regulations on US companies on not producing complete worthless crap but outsides can still bring in their junk. very nice!!!
Also, there will be only one market for the entire world, the US of em effin A. Everyone can sell everything here irrespective of what we can sell in those shit holes!

This is THE best idea EVAR...

 

[DesiPower]

Ha! Hahahahaha!

Get rid of NAFTA and enjoy your oil/water/energy/materials/lumber prices going through the roof.

Free trade benefits everyone in the end. Lower production costs and Jobs and the illusion of a larger markets to sell in = good for everyone.

fixed for you

 

[DesiPower]

Protectionism is why the United States is pretty much the only country in the world that uses HFCS as a sweetener instead of cane sugar. Consumers like you and me waste money propping up the domestic agriculture industry through the use of subsidies, tariffs, etc. If we got rid of all these artificial influences in the market, it would be cheaper to import cane sugar from countries like Brazil than to produce HFCS domestically, which would mean cheaper food for us (and this might have tertiary benefits, such as less taxpayer money being required for programs like food stamps).
*Snip*

So now the farmers who produce corn will be unemployed and the lands unused. Wont the taxpayers have to pay the food stamps for the farmers and take care of the land?

 

[DesiPower]

Well Jeesh, what did we do before NAFTA?

We were the poorest country in the world with very high unemployment.

 

[yllus]

NAFTA between Canada and the U.S. is a simple exchange: The U.S. is guaranteed to be sold oil and other energy at the exact same prices as what Canadians are charged domestically, and in return Canada gets access to the U.S. market for pretty much everything else.

As a Canadian, I cheerfully endorse the idea of the U.S. pulling out of NAFTA so we can renegotiate our oil contract with your country. Friendly hint: Prices are going to go up.

I can't speak of the U.S. - Mexico part of NAFTA as I've never been interested to learn what benefits who in that exchange.

 

[Pneumothorax]

Now that food prices are going through the roof, we should use that as a bludgeon on other countries that are net importers of food like China and Saudi Arabia. I mean who gives a f!@# about plasma TV's and oil when you can't get your Soybeans and Rice?

 

[her209]

I wonder how much these companies lose in terms of intellectual property theft by overseas manufacturers?

 

[Phokus]

http://en.wikipedia.org/wiki/Comparative_advantage

Given the recent history of several Asian countries where protectionism transformed their countries from paupers to 1st rate economies and also the history of the US, Great Britain, and other western european countries, 'comparative advantage' has been proven a joke.

Also, Ricardo made a HUGE assumption that does not apply to the present day global economy:

Ricardo explicitly bases his argument on an assumed immobility of capital:

" ... if capital freely flowed towards those countries where it could be most profitably employed, there could be no difference in the rate of profit, and no other difference in the real or labour price of commodities, than the additional quantity of labour required to convey them to the various markets where they were to be sold."[5]

He explains why, from his point of view, (anno 1817) this is a reasonable assumption:

"Experience, however, shows, that the fancied or real insecurity of capital, when not under the immediate control of its owner, together with the natural disinclination which every man has to quit the country of his birth and connexions, and entrust himself with all his habits fixed, to a strange government and new laws, checks the emigration of capital."[5]

As we all know, capital flees easily these days. If you're an owner of capital living in the US, you don't mind moving that capital to another country if you know that your capital is safe (with strong laws that protect private property) and the country has political stability (that your property won't be nationalized in the future, there won't be riots that won't overthrow the current government and destroy your property, disrupt trade etc. etc.). It's even easier for capital to flee these days with the advent of the Internet. Absolutely ridiculous.

 

[her209]

Also, Ricardo made a HUGE assumption that does not apply to the present day global economy:

Does he also make any assumptions in regard to trade imbalances?

 

[Phokus]

Does he also make any assumptions in regard to trade imbalances?

By making the assumption that capital is immobile, he implicitly makes an assumption about trade imbalances.

Edit: At least there's one CEO that isn't a complete retard/liar:

On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the U.S. to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.[21]

 

[DesiPower]

I wonder how much these companies lose in terms of intellectual property theft by overseas manufacturers?

LOL, there is a company here that manufacture a medical device that has revolutionized therapy of a certain ailment. They have been doing this for close to 10 or 12 years now but they have always kept their product away from China and India and certain similar country, they know the moment they enter, their product will be copied and sold for a faction of the price...

 

[ElFenix]

outsource != offshore

 

[IceBergSLiM]

Can spur economic growth in small economies by making their exports cheaper for us to buy. Think the Caribbean islands.

 

[WHAMPOM]

Forget China, South Korea or any of the easy targets. Start me off simple with NAFTA. How does the US benefit from corporations moving manufacturing plants to Canada or Mexico? If we don't, then why don't we make it so there are penalties for doing so?

Now back to China, South Korea and other overseas countries. Why don't we charge higher import taxes to make it beneficial for companies to make things in our country?


Feel free to tear into me for my ignorance. These are things I have never understood and would like some clarification.

Trade agreements put money in the big boys pocket, simple as that.

 

[ConstipatedVigilante]

*trying very hard to refrain from profanity*

You cannot be serious... how exactly does moving manufacturing outside create high-skill job here???????

*trying very hard to refrain from profanity*

We have the best education system in the world. We need to use it to produce the people who design, produce, and market the things that are made in those factories overseas. We also send a lot of people overseas to oversee production.

China/India/Mexico's comparative advantage is cheap labor. Ours is smart people.

Trade agreements put money in the big boys pocket, simple as that.

Try taking some basic economics. Trade agreements benefit EVERYONE. Everyone produces more and receives more from trade.

 

[SammyJr]

It's easier to manufacture outside of the U.S. due to less stringent emissions regulations and cheaper labor. Since it's cheaper to manufacture overseas, the U.S. consumer benefits from lower prices here. In addition, it spurs the need for more high-skill jobs here, jobs that bring more money in and keep it here.

High import taxes might make companies more inclined to manufacture here, but it would also hurt the consumer (which is everyone). Tariffs are almost never a good thing, since everyone benefits from trade.

Much manufacturing is low skill "everyman" work. Anyone can do it with minimal training. With these jobs overseas, does it also benefit the U.S. consumer to pay for increased social spending for these unemployed/underemployed former manufacturing workers? Does it benefit the U.S. consumer to have less security in their job and less opportunity for promotion and raises? Do you think this situation contributes to the fact that almost half of Americans pay no income tax?

In a nutshell, are lower prices at Walmart worth the social and economic costs of high unemployment and lack of living wage work?