Well, what isn’t being gotten? Nobody who says the words “Free trade” thinks it means we’re going to get stuff for free. That’s a straw man argument, the very paramount example of a straw man argument, in fact. People who take the side of economic logic unfortunately have to defend things that are positive in the aggregate, and free trade is one of those things. Yes, some companies who do low-grade manufacturing, especially ones that aren’t very efficient, will go under in the face of foreign competition; I’ve seen them. On the other hand, some companies just go gangbusters because of the sudden availability of foreign markets and inputs; I’ve seen them, too.
Martin Hyde made an excellent point, which is that when something impacts you negatively, it’s the apocalypse, and the facts that support free trade don’t matter, which is why we’ve been hearing the “they hide the real unemployment numbers” mantra since before I was born. Anyone who thinks unemployment isn’t better today than it was 25 years ago is either 24 years old or is just fooling themselves; unemployment is far, far less of a problem today than it used to be in Canada, anyway, and FTA/NAFTA has a lot to do with that.
In economics the saying “there’s no such thing as a free lunch” means that no commodity or service is free. If I give you lunch, it was free for you, but someone had to pay for it (in this, case me.) When someone points out “there’s no such thing as free health care” (which I’ve pointed out to several European posters on these forums in the past who claim their countries have free health care) I explain that there is no such thing. Taxes pay for public health care systems, sure it may even work out to being free for some, but that is not the same as it being truly free.
Free trade simply means trade without government restrictions, meaning commodities from other countries are freely being traded across borders. This means there aren’t tariffs on foreign goods, but it also means there are not subsidies on domestic goods. No government in the world today truly practices free trade, that much is true, but the United States is probably one of the most progressive if not the most progressive of all countries when it comes to this.
Two totally different uses of the word free. Free trade is a genuinely attainable goal in my opinion.
To get back onto NAFTA, NAFTA actually comes pretty close to true free trade in my opinion. The United States has acted inappropriately on a few markets (such as beef and timber) but overall there is pretty much genuinely unrestricted trade between the United States and Canada, and it has been beneficial for both the United States and Canada. The United States and Canada’s futures are very much intertwined, while Canada is obviously a much smaller country in population, it is a country rich in natural resources which have not been anywhere near fully utilized.
The oil sands of Alberta are, each year, representing a larger and larger portion of the United States’ crude oil supply. While it is more expensive to extract oil from the oil sands than many of the sources found in the Middle East, with Middle Eastern oil getting ever more expensive the Albertan oil is becoming more suitable as a substitute. The last thing we want is to dismantle NAFTA and face trade barriers between the United States and Canada when there is so much to be traded between the two countries.
It’s an amusing fact, but as relatively small as Canada is population-wise, they are our biggest trading partner. At the end of 2007 we had exported 248.9 billion to Canada, and they had imported 313.1 billion to us.
While we do more total trade with China than with Mexico, we export significantly more to Mexico than we do to China. We exported 136.5 billion to Mexico in 2007 versus 65.2 billion to China.
I appreciate the lesson in semantics, and I didn’t mean to waste your time. I was just saying that there are often consequences to things that people either don’t anticipate or don’t notice. Economics professors will say, “All other things being equal…,” and then the students have turned off their ears by the time they say, “And all other things usually aren’t equal.”
Throughout this thread no one has said there aren’t negative consequences for certain groups of individuals from free trade. I’ve said I support worker retraining, transference of pensions and et cetera. You are propping up a straw man here, at least if you’re focusing these comments at me–I’ve never denied there are negatives to free trade.
I have said that in the aggregate free trade improves prosperity. I believe it is quite clear that NAFTA has worked to the benefit of Canada, the U.S. and Mexico. I think part of the reason it has only been a relatively minor boost for Canada and the U.S. is because Canada and the U.S. already had a free trade agreement prior to the signing of NAFTA.
But the same concept applies to any science. I mean, all other things being equal, objects of different mass fall at the same rate; that’s high school physics. But if I drop a rock and a feather off my roof, a feather still falls slower than a rock, because all other things AREN’T equal; despite being subject to gravitational force exactly proportional to its mass, the feather is slowed down by air resistance. That doesn’t make my physics teacher wrong.
Why should physics get a pass for something people incessantly complain about in economics?
Fair trade to Bush is like the Clean Sky Act. It is a name for the opposite. Free trade would imply tearing down all restraints and eliminating tariffs. This admin used corporations to negotiate the pacts . Labor gets screwed ,the environment gets filthier and profits rise. Good deal. Wages and environmental concerns were said to part of the deal. They were not.
No, I wasn’t focusing any comments at you in particular. But you might want to take a tour of Tijuana maquiladoras, and the neighborhoods where they reside. You’ve probably never been there. If these companies are going to get such cheap labor, the least the treaty could do is to guarantee that their employees don’t have to live next to toxic streams. Ultimately, that costs the country. I don’t think any treaty should encourage poisoning people.
And oil was the main US objective achieved back in 88 in the original FTA.
I don’t understand why Obama/Clinton are going after Canada. Our labour laws, working conditions, minimum wage, wages in general, are as good if not better than in America. Same goes for our environmental regulations.
And manufacturing jobs? Several years ago, a premium kayak manufacturing plant in Victoria, B.C that I helped get off the ground in the mid 80’s, bought out by a Minnesota canoe outfit in the mid 90s was moved to the US because labour was cheaper there. Imagine that. Manufacturing jobs moved to the US. I’m sure that story has been repeated often.
So Obama/Clinton think they’ll be negotiating with a gun to our heads? It took 17 months to negotiate the FTA and I can recall several time where it appeared likely to collapse. Canada will be ready. And yes, the energy security the US so desparately craved in the original FTA will be on the table. Makes no sense to me at all.
They’re playing to voters. In that sense, in makes perfect sense.
Once elected, they don’t have to do anything. Trade negotiations aren’t usually the stuff of front page news; they can say they’re “opening a dialogue” and leave it at that. 19 out of 20 voters on either side of the border couldn’t tell you anything specific about NAFTA, and so wouldn’t know if you changed it or not.
They’re not. Clinton and Obama are denouncing the loss of American jobs to Mexico in order to get the votes of low-earning schmucks. But they can’t just knock Mexico without offending Hispanic voters, so they slam Canada at the same time.
I just posted about this in the other thread. So I’m not going to reiterate everything.
The comments from Canadians at the bottom of the article are very telling, they basically say when NAFTA is renegotiated Canada can counter by heavily taxing the energy exports like Oil, natural gas and wind. Most undertand that rhetoric is rhetoric, and NAFTA will get reworked no matter who is in office.
It doesn’t really matter. Oil is a fungible resource. If Canada were to refuse to sell it to the USA, and instead sold it to China, that simply means China would be buying less oil from other exporting nations, which would thus have more to sell to the USA. It’s a little bit less convenient, but would all more or less even out.
Don’t ask me the details of what they have planned. Being in Alberta, I see articles in the paper describing visits from Chinese diplomats hoping to secure some of our oil resources. Hell, maybe they just want to secure some guarantees that they’ll sell to the Americans so the oil will still flow south, only with the Chinese having some say in the matter.
Rick’s right - oil is fungible. Oil contracts can be traded and sold. Oil’s oil, once it’s out of the ground. But that doesn’t stop countries from attempting to negotiate deals that give them preferential access to it. That’s what the U.S. did under NAFTA - they secured a guarantee that we would sell them oil at the same price we sell it domestically. That’s the guarantee that Canada could rip up if Obama announces that NAFTA is null and void.