Free Trade ... Good or Bad?

[mfs378]

I want to start up a discussion about free trade. What are the pros, cons, etc.

Here's my take:

In the past few years, over two million manufacturing jobs have been lost here in the US (source).

The majority of these jobs have gone to nations where production costs are much lower than they are in America. A car could be put together by a union guy making $12 an hour in America, or by a Mexian making $4. I'm sure wages are even lower in other countries. Removing the barriers that prevent buisnesses from setting up shop in nations like this has had the obvious referenced effect.

I feel that free trade with countries in a similar position concerning working conditions and quality of life is a good thing. Examples of this are trade with the European Union and Japan. However, free trade with countries which feature sweatshop-like working conditions can only be bad in the long run.

I think it is important that we engage in commerce with all nations - commerce is often the foundation for international relationships. In light of this goal, but in keeping with the priority of protecting American jobs, I propose that trade be largely free an unrestricted with equals (in terms of workers rights, etc.), but that trade with other nations be restricted to the point where the intrests of Americans are balanced with suitable engagement on economic terms.

Any ideas?

 

[Strk]

My opinion on free trade seems similar to yours. While it is a good thing when dealing with nations of a similar economic status, it is unfair when we have to deal with a nation that will pay its workforce an amount most Americans carry in their wallets.

 

[Dissipate]

The problem is that manufacturing jobs might be protected by this, but these jobs aren't as important. The U.S. economy is service based now anyways. Now the real problem lies in tech jobs going overseas. Sadly there is no way to prevent this.

 

[mfs378]

Maybe the trend towards a service based economy would not be as strong if there wasn't such a strong incentive for companies to abandon their investment in the US?

I agree that it is more difficult with tech. For example, the outsourcing to India of tech support at places like Dell. In this case, you are not manufacturing a product, something to be imported. I am not sure exactly what to do in this case, maybe something like progressive taxation of corporations based upon a formumla which would take the number of American/international workers into account?

I think a Dell which employs thousands of Indians as opposed to thousands of Americans should pay more, since their choice of location is netting them significant decreases in expenses.

 

[Dissipate]

Originally posted by: mfs378
Maybe the trend towards a service based economy would not be as strong if there wasn't such a strong incentive for companies to abandon their investment in the US?

I agree that it is more difficult with tech. For example, the outsourcing to India of tech support at places like Dell. In this case, you are not manufacturing a product, something to be imported. I am not sure exactly what to do in this case, maybe something like progressive taxation of corporations based upon a formumla which would take the number of American/international workers into account?

I think a Dell which employs thousands of Indians as opposed to thousands of Americans should pay more, since their choice of location is netting them significant decreases in expenses.

Yes, you see because of strong unions and laws that are heavily in favor of them corporations have a much larger cost of setting up manufacturing plants in the U.S. in a lot of cases. There are benefits, payroll taxes, unemployment, overtime pay, maternity leave etc. that has to be paid out by the corporation. Not to mention environmental inspections and lots of regulations.

California is one of the worst of these states in this respect. A lot of companies here are jumping ship and going elsewhere or threatening to do so. As far as I am concerned the unions basically shot themselves in the foot.

There are of course other factors at play but the extremely high costs of setting up shop in the U.S. is definately a major factor.

 

[Dissipate]

Originally posted by: mfs378

I agree that it is more difficult with tech. For example, the outsourcing to India of tech support at places like Dell. In this case, you are not manufacturing a product, something to be imported. I am not sure exactly what to do in this case, maybe something like progressive taxation of corporations based upon a formumla which would take the number of American/international workers into account?

I think a Dell which employs thousands of Indians as opposed to thousands of Americans should pay more, since their choice of location is netting them significant decreases in expenses.

Not only is it more difficult but it is impossible. These companies are getting source code, not anything tangible. It can be sent back and forth through the Internet undetected. The government could say: "How many international employees wrote this code?" and the company could say: "What international employees? This code was written right here in the good old USA." And there is no way to figure out if they are lying or not short of a full scale investigation.

 

[mfs378]

Originally posted by: Dissipate
Yes, you see because of strong unions and laws that are heavily in favor of them corporations have a much larger cost of setting up manufacturing plants in the U.S. in a lot of cases. There are benefits, payroll taxes, unemployment, overtime pay, maternity leave etc. that has to be paid out by the corporation. Not to mention environmental inspections and lots of regulations.

California is one of the worst of these states in this respect. A lot of companies here are jumping ship and going elsewhere or threatening to do so. As far as I am concerned the unions basically shot themselves in the foot.

There are of course other factors at play but the extremely high costs of setting up shop in the U.S. is definately a major factor.

I agree with your assesment of the some of the causes. And the market is 'taking care' of it by shifting production to foreign countries with no such worker protections. I would argue that you let the market take care of it, but constrain it to the US. Companies have always opened up shop in new states, or moved headquarters around. If one state is stifiling buisness growth, move somewhere where the regulation is less restrictive. Or at least impose some sort of regulation to keep Americans from competing directly with Chinese in sweatshops getting payed $0.17 a day.

 

[DragonMasterAlex]

I'd argue in favor of free trade (bet you didn't see that coming, did you? but I'm not sure what kinds of regulations to put in place. On the one hand, using China as an example, I don't want to help out a Communist Dictatorship. On the other hand, doing so *might* plant the seeds for that regime's fall through a non or minimally violent revolution, which would be good. I'm not sure I TRUST the politicians to put "fair and appropriate" regulations in place; these are people who, regardless of party or proclaimed ideology, can't seem to stop themselves from spending FAR in excess of their revenue.

Jason

 

[Strk]

On the one hand, using China as an example, I don't want to help out a Communist Dictatorship.

Authoritarian with communist elements

 

[DragonMasterAlex]

I'll be sure to tell that to the Chinese who are executed in the Mobile Death Vans for crimes like reading Western Literature next time I'm over there

Jason

 

[LunarRay]

Lets see... Dragon Master said he favors it... so I must not.. yup.. I think it is the worst thing to do when the trading partners have too much a competitive advantage.. re: wage structure. We should limit trade to equally stationed nations and compete on productivity factors and technological advantage... let the emerging nations catch up by internal development.. or tariff to equality of wages..

 

[DragonMasterAlex]

LOL, you're getting funny, Lunar

Jason

 

[buckmasterson]

You know, free trade doesn't matter until it hits home. My most of my In-Laws work for Electrolux. If you own a Fridgidare, Kenmore, White-Westinghouse, Gibson or Kelvinator appliance, it was most likely made in Greenville, Michigan. Electrolux made this announcement Friday... Link

This is another example of what Republicans and Democrats can do when they agree on something!!! :disgust:

 

[0roo0roo]

only fails when trade isn't free enough.

 

[rudder]

Originally posted by: Strk
My opinion on free trade seems similar to yours. While it is a good thing when dealing with nations of a similar economic status, it is unfair when we have to deal with a nation that will pay its workforce an amount most Americans carry in their wallets.

And its hard to compete with China when the government keeps the value of its currency artificially low.

 

[Strk]

Originally posted by: rudder

Originally posted by: Strk
My opinion on free trade seems similar to yours. While it is a good thing when dealing with nations of a similar economic status, it is unfair when we have to deal with a nation that will pay its workforce an amount most Americans carry in their wallets.

And its hard to compete with China when the government keeps the value of its currency artificially low.

Yeah, it's quite lame how China does that with their currency. It would be nice if the WTO would get them to stop doing this.

It would also be nice if all nations participating in trade with each other were required to have approximately the same minimum-wage.(sure, wishful thinking, but hey, I can hope!)

 

[mfs378]

How do you pro-free traders feel about the trade deficit? As far as I know, free trade plays a large role.

 

[Moonbeam]

If something is exchanged for something else, energy is expended. There is no such thing as a free lunch, so there's no such thing as free trade.

The way to go is to create universities that study human life with an aim to make it better. This would require a massive investigatiion in to the meaning of better. If things are to be created we can create one for everyone. Why make things that only a few can have. That's not better. That leads to division and envy. Everybody gets one of the best things to make life richand everybody does their best to meet that end. That way everybody works for ourselves and knows real pleasure. No hating the other guy because he unknowingly reminds you, you hate yourself for being selfish.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: Moonbeam


There is no such thing as a free lunch...

If things are to be created we can create one for everyone. Everybody gets one of the best things to make life richand everybody does their best to meet that end

..so which is it?

 

[Chadder007]

Originally posted by: Strk
My opinion on free trade seems similar to yours. While it is a good thing when dealing with nations of a similar economic status, it is unfair when we have to deal with a nation that will pay its workforce an amount most Americans carry in their wallets.

:werd: Bush NEEDS to address this to get my vote this time around. If he does not, then to heck with him.

 

[Chadder007]

Originally posted by: Dissipate
The problem is that manufacturing jobs might be protected by this, but these jobs aren't as important. The U.S. economy is service based now anyways. Now the real problem lies in tech jobs going overseas. Sadly there is no way to prevent this.

Yes there is....we STOP SUPPORTING the companies that ship them over seas.
We need some sort of Tariff of goods imported into the US by US based companies. Such as Mexican built products and China made bads...er goods.

 

[Moonbeam]

Originally posted by: xxxxxJohnGaltxxxxx

Originally posted by: Moonbeam


There is no such thing as a free lunch...

If things are to be created we can create one for everyone. Everybody gets one of the best things to make life richand everybody does their best to meet that end

..so which is it?

Trying to be obtuse? Get the best by putting in the best. No free lunch. You still live with the delusion your skills are worth something and that you can compete at high levels. Reminds me of a saying. A powerful wrestler died is a match not knowing this could happen to him.

 

[biostud]

and how should these countries ever get at the same level as us, if we didn't trade with them. What we in the west need is to eductae us and be better to do advanced jobs, and let the labor intensive go to countries which are not as developed as us. When the poorer countreis get richer, they can buy some of our advanced stuff and taht will give us more jobs. Protectionism will result in fewer jobs globally in the long run, while free trade will give more. It's the capitalism on global plan. The losers will be those who cannot follow the race. So the market need to evolve not stop, and hinder free trade. We as the rich part of the world most make the first sacrifices, because no other can, and while this will mean fewer workplaces for lowpaymentjobs in the western world, it will help evolve the rest of the world to a higher plan.

 

[DragonMasterAlex]

Originally posted by: Moonbeam
If something is exchanged for something else, energy is expended. There is no such thing as a free lunch, so there's no such thing as free trade.

The way to go is to create universities that study human life with an aim to make it better. This would require a massive investigatiion in to the meaning of better. If things are to be created we can create one for everyone. Why make things that only a few can have. That's not better. That leads to division and envy. Everybody gets one of the best things to make life richand everybody does their best to meet that end. That way everybody works for ourselves and knows real pleasure. No hating the other guy because he unknowingly reminds you, you hate yourself for being selfish.

Moon, can I get you something? I ask because I'm sincerely concerned, and I think you may have finally lost it.

Not everyone *wants* one of everything. Some people want TWO of some things and NONE of others! Some people just want the simple life; some people want extravagance. The world is a *diverse* place with more tastes, more opinions, more wants, more desires and more needs than any person, any university, any study could ever possibly quantify and articulate in a meaningful fashion. In short, creating an economy as you describe, which is centrally managed and decided upon, won't work. It's been tried over and over again (Communism, Socialism, Fascism) and has ended in blood every time.

Don't try to decide what other people have or don't have; let THEM decide. Let THEM earn their money and choose what they want to spend it on.

Liberty, it doesn't get an simpler than that.

Jason

 

[zephyrprime]

Yes, you see because of strong unions and laws that are heavily in favor of them corporations have a much larger cost of setting up manufacturing plants in the U.S. in a lot of cases. There are benefits, payroll taxes, unemployment, overtime pay, maternity leave etc. that has to be paid out by the corporation. Not to mention environmental inspections and lots of regulations.

I think these cost are exagerated. Even if they were entirely removed, it would only mean the the cost of doing business in the US would be 400% higher than doing business in China rather than 500% higher (or something to that effect). How can you beat China's ~$2/day wages for entry level manufacturers?