Congressman Dennis Kucinich (D-Ohio) is running for the Democratic nomination for president on, among other things, a promise to pull the U.S. out of NAFTA and WTO. From his campaign site, http://www.kucinich.us/:
Is this a good idea? What are the good and bad things about economic globalization and America’s role in it?
Economic Globalization is a fact of life. Whether it is “good or bad” is kind of besides the point. Countries are going to form trading aliances because it makes good economic sense to do so. If the US chooses to stay outside of any trading aliances, it will simply serve to make US based companies less competitive in the global marketplace. That necessarily leads to an overall lower standard of living.
One would serve oneself better by understanding what makes economic globalization work and taking advantage of it. If you’re simply afraid that your high tech job will end up being done by someone in Bangalore, then you need to sharpen your skills or become a plumber (or some other job that by necessity must be local).
Posted by John Mace:
But we’re not talking about whether the U.S. is going to be in trade alliances or not. We’re talking about the terms of those alliances. The U.S. is in a position to demand that all countries that trade with us on favorable terms shall comply with certain standards within their own countries as to wages, freedom to unionize, and environmental protections. Our present administration, however, is completely uninterested in imposing such standards. Which makes it profitable for U.S. companies to relocate jobs (such jobs as can be relocated) to countries where wages are lower, workers nonunion, and environmental regulations nonexistent or laxly enforced. Kucinich is talking about pulling out of our existing trade alliances and creating new ones on different terms.
I say go a step farther! States should erect trading barriers between each other, to prevent jobs from leaving the state.
Hell, so should cities! I want to support my local stores, so we should erect trade barriers to prevent people from buying goods from other cities.
Do you think implementing these barriers would be a good idea? Wouldn’t it help local businesses? Wouldn’t it help keep jobs in rich states from flowing to poorer states where wages are lower? Wouldn’t it help keep the poorer states from being exploited by the rich ones?
I think sovereign nations should be allowed to set standards in their countries as they see fit. You seem to be implying in your post (per my bolding) that we should only trade with countries where wage scales are at or above US standards. Can you clarify what is meant by “fair trade”?
I don’t know much about Kucinich, but Dean touched on this issue when he spoke here in town. Here’s a quote from deanforamerica.com:
I don’t know of any candidates who have said we should only trade with countries where wages are the same as ours, but it looks like at least two have said we should only trade with countries that have similar environmental and labor standards - which can certainly affect the wages.
I suppose Europeans could say the same thing about the USA. Europeans get a minimum of one month paid vacation per year and free health care. Maybe they should stop buying from the USA until American workers get similar benefits? I am not sure about environmental laws but should the EU also require Ameria to prove they meet European standards? How would Americans respond to such requirements?
Yes, screw efficiancy! Lets lower the standard of living for everyone. Damn sound economic theory! We want everything to stay the same because change is scarry. Let the rest of the world adapt and prosper!
Professor Krugman is from MIT and very liberal. He thinks that the present administration has done everything wrong, but he also thinks that globalization/free trade is a good thing. 
[sup]**Read the whole article. **[/sup]
Funny how the middle class in the US and Europe came into being without outside pressure to conform to environmental, wage, and other “fairness” issues. And it’s a shame we didn’t force countries like Taiwan and S. Korea to conform to US standards. If we had, perhaps those countries would have a middle class instead of being the impoverished 3rd world countries that they are today.
Gotta love Greens. “Multilateralism! Multilateralism! Respect for international agreements!”
Except for trade. There, unilateralism is the policy. If they think we made the world mad by getting out of Kyoto, just wait to see the adverse reaction pulling out of trade agreements will cause!
What most posters havent thought about is that the relatively low unemployement the US has as compared to the rest of the world is in good part due to globalization.
Like someone pointed out… Europeans have higher standards than americans as employees benefits and rights go. Will the US change theirs ? Nope… you dont want European level unemployement.
What globalization did was open a wide new options for investment of all sorts... so yes the US and Europe will lose manufacturing and agricultural jobs... they will also get much more high tech and advanced services jobs. So either study more or go the "plumber" route is the current globalization scheme. Within the US you guys don't cut any slack for uneducated and those unwilling to work... so why ask for slack in the international arena ?
There is no cutting away from the intl system... unless you want your economy to collapse. This Dennis guy is just appealing to his constituents lack of economic knowledge and perceived evil of international institutions that plagues america.*Originally posted by Mr2001 *
Now here’s where the arguements get very fuzzy indeed. I’d like to ask my American friends to take just a small little moment to consider the flip side of the quote by Senator Dean which I’ve bolded above - and Mr2001 please relax in knowing what I’m about to say is not a reflection on yourself in any shape or form.
The thing which smacks of double standards by Senator Dean in that quote above is the unspoken policy which currently already exists within US Customs policy to subsidise many American industries by imposing arbitrary tariffs on the products of countries which produce materials that, by any normal yardstick, would have an entirely legitimate and valid case for importing INTO the United States.
Two areas which immediately spring to mind are the steel industry and the agriculture industry. For some reason, by a mere quirk of fate, one of your most loyal allys and friends - namely we humble Aussies - well we’re blessed with the resources needed to be really, really strong in the steel and agrictulture industries.
For years, our efforts to gain a toe-hold into the US markets have been stymied by the arbitrary application of tariffs on our steel and agriculture exports with a view to simply pricing them out of the US domestic market - and it’s worked. Incredibly so.
And yet, by any reasonable yardstick, Australia meets every possible “human rights” aspect of this arguement you could imagine. Our workers are covered by Workers Compensation agreements, and Federal minimum wage agreements, and inarguably strong union representation. And the nature of our economies of scale means that naturally, the Australian dollar is slightly weaker than the US dollar - ergo - Australian exports should, under normal circumstances, be available for sale within the USA at very competitive prices.
Sadly, the natural balance of economies of scale are stymied by the arbitrary imposition of import tariffs on steel and agriculture INTO the USA to protect those same industries within the American domestic market.
So I ask of you, my impartial and fair minded American friends is this - what more can we Australians do to be a fair, and warm hearted trading partner? Honestly? The two industries in question have been reinvented by us time and time again so that they’re meeting “world best practice” standards of efficiency and production. And morevoer, we allow almost total unfettered access to our markets of US made goods and services.
All we ask, in turn, is fairness. It’s not our fault that the nature of economies of scale means that the Australian dollar is weaker than the US dollar - and yet, after the US Import Tariffs are applied, any efforts by us Australians to export our steel and agriculture to the US are simply shot out of the water by the amazing price increase which is applied to our products.
My point is this - there’s a certain aggravating aspect to the US demanding the right to export products in a fair and equitable manner whilstsoever she ALSO maintains the right to aribitrarily restrict the importation of OTHER products purely to protect certain domestic markets. And THAT is where Senator Dean’s quote above has a degree of disingenuousness about it - in my considered opinion.
In closing, I truly believe that the world’s major producing countries (with the exception of oil doped economies) form part of a giant big circle nowadays. What one country produces an aundance of, a few others have a shortage of - and so on - and so on. It’s part of the reason why Australia has such a thoroughly rewarding trading relationship with (of all people) China. Those guys actually play fairer, believe it or not, than the USA does.
hehe… 100% accurate… except your not a superpower. So bend over and deliver. >:) We Brazilians are in the same boat… good agriculture and steel, thou our currency is even cheaper.
Send us all your women!
I can only echo Boo Boo Foo from a Canadian perspective. Even within NAFTA, when some Canadian export (wood, steel, wheat) competes too strongly with the US, the US just ignores NAFTA and does ahead and imposes tariffs and quotas. And if they lose in the NAFTA or WTO tribunal, they just ignore it and go on as before. Still the Canadian government must feel that on balance NAFTA has been beneficial else they would have abrogated the agreement. But the US has never played on a level field.
Well let’s look at the facts shall we? From the CIA World Factbook, the largest exporters to the US are:
Canada 19%,
Mexico 11.5%
Japan 11.1%
China 8.9%
Germany 5.2%
UK, Taiwan (2001)
Now the UK exports 13.2% of 286.3 Billion dollars to the US making up roughly 3.2%, while Taiwan exports 22.5% of 130 Billion to the US making up 2.5%
So we have 41% of American imports coming from 1st world industrial countries.
Please tell your representative to kindly go find another scapegoat.
That should be
So we have at least 41% of American imports coming from 1st world industrialized countries.
Posted by Sam Stone:
Chuckle. You are so amusing, Sam! Of course you know and we all know you are fudging the issue. The states of the Union are not in the same position with respect to each other as the U.S. is with foreign countries. Under the Constitution, states cannot erect their own tariff barriers; only the U.S. Congress has authority to regulate interstate commerce. (Actually, there is no constitutional reason why the U.S. has to be an barrier-free internal tariff union. Interstate tariffs could be enacted – but only by the United States Congress, which has never seen fit to do so.) However, that same Congress which regulates interstate commerce also has the authority to impose national standards as to minimum wages, labor practices, environmental protections, etc., etc. When we look abroad, there is no analogous Global Congress to dictate such things (pity), and so we can affect the internal policies of other sovereign states only through negotiation and political pressure.
On the other hand . . . actually there are things, lawful and constitutional things, which local communities can do to at least soften the impact on them of deleterious trends in the national-global economy. In his new book, Thieves in High Places (Viking, 2003), Jim Hightower discussed some of these in Chapter 10: “Wal-Mart: How to Play Beat the Devil.” For instance, if Wal-Mart wants to open up a branch in your town, sucking the life out of all the local small businesses, destroying three full-time jobs for every two part-time jobs it creates, and sending the profits to its headquarters in Bentonville, Arkansas, your town government probably has the legal authority to say no, and many have. From page 183:
Posted by John Mace:
Obviously it would be unrealistic to, for instance, expect Indonesia to impose a minimum wage of $5.15 per hour U.S. But it might be a good starting point to demand that such a country impose wage standards at a “living wage” level so that anyone who has a job can actually live on the earnings. Here in the U.S., where the legal minimum wage of $5.15 per hour yields an annual income of $10,700 (try living on that!), there is a vibrant national movement to effectively jack up the living wage at the local level to anywhere from $6.15 to $12.00 per hour, depending on local economic (and political) conditions. See Jim Hightower’s article on the Living Wage Movement in The Nation (http://www.thenation.com/doc.mhtml?i=20020401&s=hightower). That’s the kind of thinking we need when we negotiate international trade agreements!
Posted by Hari Seldon:
Very interesting. I was completely ignorant of all that. A cite would be appreciated. (I hope that a man as ethical as Dennis Kucinich, if he becomes president, will be much more fair and honest in administering and enforcing such trade treaties as are in place during his administration.)
American complaining about unfairness in world trade. I can die I’ve seen everything… Wait The only thing I’ve not seen is an European doing the same thing. The moment that happens I’ll shoot myself.
Boo, wrote almost everything I have to say in this subject. The only thing that I have to add is that Argentina´s case is desperate, we need to export. We have comparative advantages in many field but specially in agriculture. Every year we lost a lot of money because we have to compete with your inefficient farmers.
How are we suppose to grow, pay our debts and buy your products if we are not given a fair chance to compete?