Cite? I have been under the impression that the US always follows WTO decisions. KarmaComa provided a couple links, but they only suggest that the US did not comply with a non-binding decision.
The Dems definition of Fair Trade: when third world countries have first world regulations and standards, they can trade with us. The Dems never want to explain how that is to come about though. Its just cultural bigotry dressed up as liberalism.
But regardless, none of this has anything at all to do with punishing exporting countries. It has everything to do with limiting the choices of Americans who buy goods exported from other countries, and punishing them for their choices.
If the point was to punish foreign companies/countries for ‘unfair’ trade, a fine would be levied on the company/country as a whole, which would be paid for by all the companies customers all over the world.
But US tarriffs arent paid for by a companies customers all over the world, they are only paid for by the american customers.
Tarriffs are a tax on americans who excercise their freedom of choice, the only difference being rather than spending the taxpayers money on law enforcement to collect the fines, the government requires the seller to do the collecting. Far too many americans look upon the wallets of their fellow countrymen as ‘their turf’. As if they have some right to our money by virtue of the fact of having been born within the same political boundery. Fruitcakes, one and all.
Its really not that hard; you make what the customer wants for a price the customer is willing to pay. If you cant or wont do it, someone else will. If you dont like that, too bad. Adapt.
No one seems to mention that, if wages decline (which they arent) due to low cost imports, then that also means that the cost of goods has declined as well. That also means that poor people can afford alot more than they could when everything was built by a Teamster making $25 an hour to hold a broom.
It also means there is far more opportunity; opportunity ~is~ competition. If you restrict competition, you restrict opportunity. For every industry or union that gaurentees, in some way, job security, there are thousands of people without jobs being artificially kept from competing ~for~ those jobs.
For American every farmer who goes out of business because he cant sell his wheat at the low cost of foriegn imports, there are countless American families who can now afford more bread than they could when the farmer was selling it.
It happens locally too; someone mentioned Walmart, and what local governments can do to keep them from sucking the life out of downtown. Well, no store can suck the life out of downtown if no one shops there. Local governments who work to keep Walmart out do so because they know that, if given the chance, all the local people would shop there and not downtown. Its this general attitude of government as herder, people as sheep that needs to be done away with.
If people shop at Walmart in large enough numbers to close businesses downtown, then it seems to me the people are making their choice heard. Perhaps they got tired of being taken for granted by all the businesses downtown? Perhaps they are aware that usually in small towns, the local businesses downtown are owned by members of the local government, and so local government keeping Walmart out is just local business trying to force you to buy from them, and not the other guy.
If the people in an area dont want Walmart, they wont shop there. If they do shop there, and in large numbers, than apparently they didnt want their downtown. Only a pompous elitist would think along the lines of De Velara when he said “The majority have no right to do wrong.”
No no, dont make the mistake of thinking this Fair Trade gimmick is anything other than attack on the freedom of choice of Americans. We have been bad, we have been ‘socially irresponsible’; we havent been buying from the correct companies/industries, so we need to be punished. Its the only ‘responsible’ thing to do.
Gorsnak:
I certainly agree that if Canada did not have farm subsidies and the US did have rather large subsidies, then that would result in many, if not most, farmers in Candada to go bankrupt. Or shift to crops that are not subsidized in the US (and other countries).
But it’s important to remember that it’s not Canada buying from the US, it’s Candadian citizens buying from US citizens. And if the food is cheaper for Canadian due to US subisdies, it would amount to a transfer of wealth from the US taxpayer to the Canadian citizen. (If it weren’t cheaper, the Canadian farmers would still be able to keep their businesses going.) This is why I said earlier that Candadians should dance for joy.
While I strongly oppose government subsidies for any industry, I still see it as a win situation for a county to unilaterally eliminate subsidies even if it means some businesses go under. There is no “correct” amount of the workforce that should be employed in any one industry.
I’m sure many of us remember the US chip companies screaming for help from the gov’t in the 80s, saying the Japanese were competing unfairly and that the whole US industry was in danger of collapse. The “strategic industry” argument was trotted out left and right. But no subsidies of any significance were given, and the US chip industry survived quite well, and is in fact a powerhouse today. Funny how you never hear a peep about Japan Inc. anymore.
“Cultural bigotry”? Please.
Look, suppose we discover that a certain manufacturing process is harmful to the environment - perhaps some gas is released that destroys ozone. This isn’t just a problem for the companies or countries that use the process, it’s a problem for everyone.
We outlaw the process here in the U.S., so the companies that were using it move to Batzania, where where are no environmental regulations. Result: The process is still used just as much as before, just as much gas is released into the atmosphere, and the environment is harmed just as much. The regulation did nothing but subcontract out the pollution.
Now, you might say that’s OK. Since people keep buying the products, obviously people want to deplete the ozone layer, so why not let them? Problem is, they’re ruining things for the rest of us. This is one of those times where majority rule isn’t always right.
Solution: We outlaw imports of products that are made with this process. There’s less demand for products made in such a way, so fewer of them are produced, and the environmental harm goes down.
Mr 2001:
Just being alive is “harmful to the environment”. The problem in real life is that most of the time there is not a concensus even in the scientific communnity of what is harmful and what is not. So the whole thing gets politicized.
A few years ago, CA required that MTBE be added to all gasoline in the state. It was supposed to be cleaner burning and “good for the envirommet”. So, at some expense to the consumer, including lower gas mileage, the industry converted. Then all of a sudden it was discovered that MTBE got into the drinking water and posed a greater threat than the non-MTBE gas did. Now the government has mandated that by some time in the future MTBE must be removed from the gas sold in CA. And that gets us right back to where we were before.
I have no problem with governments regulating the amount of pollution allowed. The problem is that the gov’t typically wants also to legislate how companies comply with the rules. And countries should be free to determine how much pollution they want to tolerate. There are international organizations that can work toward uniform standards. But ultimately the consumer should be free to buy what he or she wants.
Yes, I understand your point now. I misread it initially, leading to some confusion on my part. And your point is quite reasonable, to an extent. Unfortunately, the wealth transfer in question is from US taxpayers to Canadians not dependent on the agriculture sector of our economy. This would be very nice for Torontonians, but downright sucks for residents of Saskatchewan. Of course, we could all move to Toronto, but I for one don’t want to.
I dont see where we are getting any benefits from it, Nike shoes are still expensive even though they are made with cheap labor.
We have the worst balance of trade in our history, we are buying asian goods, but no one is buying made in america goods.
With all the millions of jobs lost, we have less americans paying income taxes and our federal trade deficit is as bad as our balance of trade deficit.
The politicians who passed these trade agreements promised us millions more jobs(not less) and much cheaper prices, and much mor e american goods to be sold in other countries, since none of these things came true, scuttle it.
I keep hearing this and I want to know: When does a Euro worker get this? Their first day at the job? First year? Five years?
I’m a professional and I get 6 weeks a year paid vacation , plus 12 days paid sick, plus paid insurance, etc… But I had to be here for a while to get so much time off. When does a European start to get that? Can he call in on his second day on the job and say he’s starting his 30 day holiday?
and do ALL workers get this?
Sure they are, they’re buying your debt.
If you want to be taken seriously, you can’t make statements like that. If you go here, you’ll see that we have a postiive trade abalance with Australia, for instance. Check out the different countries and you can see where the numbers fall.
It is to be expected that we, as the richest country in the world, have a negative balance of trade. We have more money to spend. Do you expect Mexicans to buy more American goods than we buy from them? That would be surprising indeed.
Depends on the countries. Here in France, there are by law five weeks of paid vacations (not including holidays, etc…). But (except for civil servants) you must (usually) have been working for a full year before having the benefit of your vacations. Roughly, you’re taking on the year X+1 the vacations you “earned” during the year X. Of course, your employer can allow you (or even require, if, say, his business is closed during a given month) to take vacations before the end of the first year.
Of course, Hong Kong is in fact now a part of the People’s Republic of China, which has subsidized agriculture. Prior to that, I’d say it was pretty strategically isolated if push came to shove.
I remember back in 88, I bought a pair of Nikes for $125. In the mall the other day, I saw a pair of Nikes for $120, many even cheaper. The price of Nikes really hasnt increased in 15 years. If they were still being primarily made here in the US, do you think that would be true? Would anyone outside of Hollywood seriously pay $200+ for a pair of damn tennis shoes?
And if you think no one is buying american goods, when was the last time youve been overseas? It can literally be difficult to find a store in a foreign country (especially europe) that doesnt have the same ole crap you can buy here.
Its faaar easier to buy american goods in many places overseas than it is to buy foreign goods here, lemme tell you. That whole ‘we buy more of theirs than they do ours’ crap is just that, crap.
Quality is an issue as well. Sorry to say, but many american goods are just not that great when it comes to quality compared to foreign. Cars come to mind. It can be, it could be, but it isnt. Thats not the foreign workers fault.
Theres something pathetic about a company that has to appeal to your patriotism to get you to buy their stuff.
Everyone here seems to be conceding the notion that eliminating subsidies will hurt farming.
I suggest you have a look at New Zealand, and what happened there when farm subsidies went from huge to almost nil. The farmers predicted disaster. In fact, elimination of subsidies opened them up to the forces of the market, and they adapted. Now, the farm industry in New Zealand is healthier and more profitable today sans subsidies than it was when it was heavily subsidized.
Sam:
NZ is an intersting case. I would suspect that the isolation makes shipping food there pretty expensive and so local farmers have a leg up. A country like Canada would have a hard time sustaining agriculture if the US gave significant subsidies to ag and Canada did not. I still don’t see the problem with that, as per my earlier posts in terms of unilateral elimination of subsidies.
But subsidies are kind of like addictive drugs. You can start off with just a little and before you know it you need more and more just to stay “normal”.
I’ve always been under the impression that subsidies primarly go to the giants like ConAgra and ADM. Most of the family farms really don’t exist any more. I know pig farmers in NC don’t…
John: The big problem with subsidies is that they distort the market, and remove competitive pressures from farming, which can make farming less efficient.
Subsidies can also skew the motives of farmers - make the subsidies big enough, and the farmer starts optimizing his operation around gaining maximum subsidies, and not necessarily producing the best product.
For example, when New Zealand sheep farmers were hurting, the government responded by subsidizing fertilizer and feed. The result was overfertilized land, and overfed sheep. Made worse by the fact that the New Zealand government would buy sheep by the pound without consideration for the quality of the meat. So the incentive for farmers was to simply produce the fattest sheep they could. The meat was not very good, and New Zealand sheep went from being the best in the world to almost unsalable. The government was buying up sheep and converting them to tallow at one point. And New Zealand’s rivers were becoming more polluted from overfertilization.
When subsidies were cut, farmers had to compete in the market again. Which meant that high grade lean sheep meat became more profitable than fatty, overfed sheep. And since feed was back to market prices, the incentive to fatten the sheep was reduced further. Eventually, New Zealand sheep regained premium prices, allowing for leaner, high-profit farming that was lighter on the land as well.
The same distortions always occur when you subsidize things. Subsidize wheat by the acre, and farmers will plant more wheat of lower quality. It also reduces the incentive to leave some land fallow. Even just flat grants that are supposedly non-distortionary distort the market by allowing the least efficient operations to survive when they should fail and make way for more efficient use of land and capital.
What exactly is “low quality” wheat? Any nice clean sample of decent wheat is virtually indistinguishable from registered seed in terms of probable yield. There’s no incentive to use dirty samples because regardless of subsidies, contributing to weed problems costs more money down the road than does cleaning the seed.
What will happen is that more wheat will be seeded at the expense of crops that are not receiving subsidies, which is the primary market distortion.
As for leaving land fallow, current orthodox ag science calls for continuous cropping with rotating crops, with fertilizer levels determined by soil samples. Some older guys still think that it’s more economical to leave land fallow 1 year in 3-4, as it allows you to control weeds with less herbicide, with higher yields in the post-fallow year making up for the much of the lost income. However, deciding between rotating fallow and continuous cropping is not going to be dependent on susidy policies unless those are specifically based on seeded acreage. And even if they are, it’s not at all obvious that continuous cropping (done right) is the inferior way of doing things.
Really, Sam, while I completely agree that farm subsidies should be done away with, it’s obvious that your understanding of this issue is pretty much entirely theoretical and ideological, which makes me wonder why you deign to speak about it with such an air of authority.
Are you serious, John? The strategic differences between the United States and the former colonial mandate of Hong Kong seem no different to you at all?
Secondary inputs to agriculture have many possible substitutions. The United States has already survived an oil embargo. Substitution goods already exist for metals, plastics, etc. So far, I do not believe that any such good can substitute for food.
A general claim that farming is “strategic” is insufficient. Japan does not produce enough agriculture to support its own people. However, the balance of threats against the United States and its currently awful credibility with the third world both due to its foreign policy and its economically devastating “dumping” of agricultural goods on the world market is substantially different than the balance of threats against, say, Japan.
Lack of agricultural self-sufficiency is a risk that many countries can bear. The United States is not one of them. If you would like me to take a quick look through the literature and find a formal model that tests this hypothesis, I certainly can.
Yes. Many. However, you will surely quibble with my definition of “modernity.” If you are looking for a first world western country that whose agriculture industry has withered away, well, I suppose I can’t find one. Unsurprisingly, they are all heavily subsidized.
Evidence for what? That the United States has a strategic interest in agricultural self-sufficiency? That there are no substitution goods for food? That different countries are exposed to different levels of worldwide risk?
Do you need evidence that the sun will rise tomorrow morning, too?
Actually we were talking about Canada and HK. But when it comes to agriculture, yes, it’s unclear what the strategic difference is. HK is much more vulnerable than the US.
“Food” comes in many, many varieties. There are actually many more substitutes for “food” than for tractors. If we somehow faced a wheat embargo, switch to corn. Beef, switch to pork.
At any rate, I’m having difficulty imaging a scenary where Canada (that is the example we’re using) faced a “food” embargo from the US, Japan, Australia, China, Mexico, Russia, and all of Europe at the same time. Can you? And that if it somehow did, there would be no way to replant fields. Housing covers all of the Canadian wheat basket? I doubt it.
So, to counter the ill will produced by agricultural dumping, you recommend more dumping? Seems like you just made a good argument against subsidies.
So you are, in fact, supporting an untested hypothesis.
Ah, the “it’s self evident” argument. Kind of ends the debate, doesn’t it?
But you are still missing the point. I’m asking you to show that agricultural products are “strategic” to a 1st world country in the world today with arguments that cannot be used for almost any other commodity.
As for the sun, I will agree that access to its output is currently a strategic interest for every country, and should be defended.