T Nation

CAFTA

Does anyone have any thoughts on this? I’m unabashedly pro-free-trade, so I’m all for it.

Here’s a column by Charles Krauthammer on how this is becoming a partisan political issue:

Reactionary Liberalism

By CHARLES KRAUTHAMMER
The Washington Post
June 27, 2005

WASHINGTON – What has happened to the U.S. Democrats over the past few decades is best captured by the phrase “reactionary liberalism.” Spent of new ideas, their only remaining idea is to hang on to the status quo at all costs.

This is true across the board. On Social Security, which is facing an impending demographic and fiscal crisis, they have put absolutely nothing on the table. On presidential appointments – first, judges; and now ambassador to the United Nations – they resort to the classic weapon of Southern obstructionism: the filibuster. And on foreign policy, they have nothing to say on the war on terror, the war in Iraq or the burgeoning Arab Spring (except the refrain: “Guantanamo”).

A quarter-century ago, former Senator Daniel Patrick Moynihan noted how it was the Republicans who had become a party of ideas, while the Democrats’ philosophical foundation was “deeply eroded.” But even Moynihan would be surprised by the bankruptcy in the Democrats’ current intellectual account.

Take trade and Central America. The status quo there is widespread poverty. The Bush administration has proposed doing something about it: a free trade agreement encompassing five Central American countries plus the Dominican Republic.

It’s a no-brainer. If we have learned anything from the last 25 years in China, India, Chile and other centers of amazing economic growth, it is that open markets and free trade are the keys to pulling millions, indeed hundreds of millions of people, out of poverty. The Central American Free Trade Agreement (CAFTA) is a chance to do the same for desperately poor near-neighbors.

You would think this treaty would be a natural for the Democrats, who have always portrayed themselves as the party with real sympathy for the poor – in contradistinction to the Republicans who have hearts of stone, if they have any at all. The Democratic Party has always seen itself as the tribune of the oppressed of the Third World and deeply distressed by the fact that “the United States by far is the stingiest nation in the world for development assistance or foreign aid,” to quote Jimmy Carter, former Democratic president, current Democratic saint.

You would think, therefore, that Democrats would be for CAFTA. Not so. CAFTA is in great jeopardy because Democrats have turned against it. Whereas a decade ago under former U.S. President Bill Clinton, 102 Democrats in the U.S. House of Representatives supported NAFTA (the North American Free Trade Agreement), that number for CAFTA is down to 10 or less. In a closed-door meeting this month, reports Jonathan Weisman of the Washington Post, House Minority Leader Nancy Pelosi put heavy-handed pressure on all congressional Democrats to observe party discipline in killing the treaty.

Arguing free trade is particularly tiresome because it is the only proposition in politics that is mathematically provable. It was proved by British economist David Ricardo in 1817 that even if one country is more efficient in producing two items, trade between two countries based on the relative efficiency of production is always beneficial to both countries.

Mathematics does not change, but calculations of political expediency do. After all, it was the Democrats who, when Central America was aflame in the 1980s, argued strenuously against Ronald Reagan’s muscular approach of supporting the government of El Salvador and the anti-communist revolutionaries in Nicaragua. Democrats voted time and again against Reagan’s policy because, they claimed, it ignored the root causes of the widespread discontent in Central America, namely poverty and hunger.

Their alternative? Economic help, not guns. In 1983, when Reagan made a speech asking for support for El Salvador’s embattled government, Sen. Chris Dodd made a nationally televised response on behalf of the Democratic Party in which he called Reagan’s policy a failure and demanded instead that we deal with the underlying economic and social conditions: “We must restore America as a source of hope and a force for progress in Central America. . . We must hear the cry for bread, schools, work and opportunity that comes from campesinos everywhere in this hemisphere.”

There is no better way to bring bread, work and opportunity to the campesinos of Central America than with markets and free trade. To his credit, Sen. Dodd supports CAFTA, which represents precisely the kind of deployment of soft power that he was advocating on behalf of his party 22 years ago. Today, however, his party has overwhelmingly abandoned his – and its own professed – ideals.

Eighty percent of goods from these countries are already entering the United States duty-free, so CAFTA would have a minimal impact on the United States. It would, however, have a dramatic impact on these six neighbor countries – countries that U.S. Democrats used to care about. Or so they said.

Free trade is good for most, bad for some.

It makes perfect sense the Nancy Pelosi would oppose it. She only appeals to some of the people.

I wish the Democratic Party would pull their collective heads out of their asses. They are being left behind.

[quote]BostonBarrister wrote:
Reactionary Liberalism
[/quote]

Let me go out a limb here and guess: no plan which might work better, just opposition? We no longer have a two-party system. We have a party in charge and the “I’m against the party in charge” party.

How do you reach compromise or a middle ground when the guy across the table just automatically contradicts what you say?

Party in charge: “This is what I believe, let’s make a law to deal with the problem.”

IATPIC Party: “No, because you said it.”

Party in charge: “OK, well, were do you stand on the issue?”

IATPIC Party: “180 degrees from where you are, wherever you are! And California and Massachusetts are with me to the death!”

Party in charge: “Er, OK. What if I totally reverse my position?”

IATPIC Party: “Then I will be opposed to you!”

Party in charge: “How do I meet halfway on that?”

IATPIC Party: “With you and your principled positions, there can be no compromise! You’re just like Arabs and poor people, you’re not capable of running an elected government like WE are! Forget freedom, FILIBUSTERS are on the march!”

Party in Charge: “Well, excuse me, I’m going to go run the show…”

Hey, that sounds like a great way to lose the majority in every branch of government!

My sentiments exactly. The article you posted raises an interesting point. Since free trade, if not short term then certainly in the long run, increases wealth and helps people out of poverty,why are the Democratics against it? The answer is simple. Both parties, Democrats and Republicans, aren’t about ideas or philosophies, and they’re not about representative government. It’s all about getting money from the special interests. If the Democrats supported free trade, they would lose support from big labor. It doesn’t matter that in the long term free trade produces a net benefit.

Free trade tends to lead to more jobs as the economy transitions. Cafta is more of economic welfare for the central american states then a big benefit to the US. It should lead to a net pick up in employment in Central America which generally leads to social stability. I would think this ultimately the goal of the agreement.

I think the article correctly pegs the Dems. If it was their idea they would be behind it 100% behind it, like many of their positions these days.

It sucks. Slave labor works well for unabashed capitalism too. The, “I like cheap stuff and to make as much money as possible no matter if it is good for me, my country or people in other countries” attitude is destoying us.

BB,

I had thought the codex issue dead in the US, but I had read…can’t find where that someone had tied CAFTA with the issue of the codex rules being forcibly imposed upon us.

Does this ring any bells, or make any sense to you?

[quote]Pretzel Logic wrote:
“I like cheap stuff and to make as much money as possible no matter if it is good for me, my country or people in other countries” attitude is destoying us. [/quote]

Evidence please?

How many economic texts have you read?

[quote]Pretzel Logic wrote:
“I like cheap stuff and to make as much money as possible no matter if it is good for me, my country or people in other countries” attitude is destoying us. [/quote]

Evidence please?

How many economic texts have you read?


.

I don’t have any eveidence. Luckily I’m not in court. It’s just my two pesos. I’m talking about ethics and conscience for American workers. I know that some can benifit and some get hurt. Some in these South American countries will get hurt too and some will benefit. I believe that most of this legislature is there for the same reason companies pay foreign workers a little less to make their stock go up a point. Greed. Maybe I’m talking out my ass, but I don’t think so completely.

[quote]Pretzel Logic wrote:
I don’t have any eveidence. Luckily I’m not in court. It’s just my two pesos. I’m talking about ethics and conscience for American workers. I know that some can benifit and some get hurt. Some in these South American countries will get hurt too and some will benefit. I believe that most of this legislature is there for the same reason companies pay foreign workers a little less to make their stock go up a point. Greed. Maybe I’m talking out my ass, but I don’t think so completely.[/quote]

I sympathize with your position, but in this case most economists, (including left leaners), have agreed that these agreements are valuable to both spheres…

“I sympathize with your position, but in this case most economists, (including left leaners), have agreed that these agreements are valuable to both spheres…”

I have a question. Once the benefits have saturated the country in question and they decide its time to institue more workers rights, super, all the things we have… then does CAFTA become a hinderance? If so why?

B.B.
How about an article that fairly represents democratic oppostiton to CAFTA, instead of this lying bastards’s lame teardown? Kraut’s article (of course) goes beyond comical and into enraging, and never touches on what dems don’t like about cafta—hint: it’s not free trade they object to!

So when CAFTA goes forward we essentially will have more cheap plastic crap that discount stores like Walmart will be able to purchase and thus put more American manufacturing jobs out of business? Free trade is a double edged sword. The article doesn’t even touch on any real reasons why the majority of the dems are opposed to it and just chalks it up to opposition. This is indeed “comical” at best!

My second piece is that Mr. Krauthammer doesn’t even discuss how how free trade is beneficial to the parties involved and just touts that if the Dems were in favor of it before then why not now (could it be because they realize it doesn’t work for the majority)? Also he uses rhetoric like economics and mathematics as argument to “prove” its validity which the vast majority of the public wouldn’t be able to understand–nor does he make any attempt to explain them.

Yes, free trade is beneficial to the people at the top–e.g., the “Goerge Bushes”, “Haliburtons”, and “Waltons” of the world. And yes, I would argue that it does bring some piece of economic stability to countries with no economy at all; however, I also believe it makes it easier for the economic superpowers to take advantage of the have nots. Which I beleive is the argument at hand and not just purely from the democrat’s need to oppose the opposition.

There is another side to this argument. Critics often prove their point that U.S. companies are taking advantage of workers in other nations by quoting a statistic such as the workers are getting paid something like $5 a day. What this fails to take into account is that it’s comparing “hard currency” (U.S. dollars) to currency nobody wants. Naturally, the U.S. dollar or any other hard currency will be worth substantial more. So, the workers may in fact be paid “only” $5 U.S., but that $5 translates into a very good wage when converted into their country’s currency.

I experienced this first hand when I traveled to Eastern Europe way back in in 1989. I and a group of other students would hire a cab driver for something like $10 a day to drive us to various places around the country. That price won’t even get you to the airport in most U.S. cities. Were we taking advantage of him? Hardly. That was some good money for the cabbie, and he did it willingly and with a smile on his face.

[quote]MikeTheBear wrote:
Were we taking advantage of him? Hardly. That was some good money for the cabbie, and he did it willingly and with a smile on his face.
[/quote]
No, you missed the point entirely. I never said that “Free” trade is a good or bad thing–just that it makes it easier for the haves to take advantage of the have-nots. Sure, it’s easy when you’re comparing currencies to make the average pay look overinflated compared to the local cost of living. This does not mean their quaility of life is any better. Money does not equal a good life.

Lets be real for one second: Most of us accustomed to working in the US where we have oversight in the work place by groups such as OSHA, and ISO, etc., take that fact for granted. Most the countries where free trade would be employed have no such oversight from either governmental agencies or otherwise.

For example, most “blue-collar” workers in this country can expect a clean and safe environment in which to work. They can also expect to be compensated for all of their work, not to mention work above and beyond the standard 40 hour pay week. We also have regulations on who can work–we don’t allow children to work in place of attending school. US companies also usually provide benefits including but not limited to health care, dental care (which can be extended to family members), company ownership, and retirment fund matching (401k, etc).

If American big business is going to profit from said free trade it is their responsibility to make sure those that they profit from have standards in place that equal or exceed their own.

So when you ask, “Were we taking advantage of him?” I reply, no! you were not and indeed $10 may have been more than fair. But as I said, money is the least of the issues involved and there are far greater reasons not to back CAFTA.

[quote]Zap Branigan wrote:
Free trade is good for most, bad for some.

It makes perfect sense the Nancy Pelosi would oppose it. She only appeals to some of the people.

I wish the Democratic Party would pull their collective heads out of their asses. They are being left behind.[/quote]

Couldn’t have been said better.

For those interested in free-trade and where the idea was originally supported. You can check out this:

http://www.econlib.org/library/Enc/bios/Ricardo.html

This is the reference that is made to David Ricardo in the above article.

Free trade was argued by Ricardo in the form of “comparative costs” whereby two countries that produce the same two goods give up production of their least productive (least profitable) good to import whereby they then can use the gained productivity to produce the goods for which they are more productive. Both parties benefit because they can now trade for more of the goods they were unable to produce themselves. Mathematically this is very sound and quite easy to prove and I leave it as an exercise to the reader to do.

The problem is that in the US we import more than we export making a total trade deficit–$59 billion for Q1 2005 as reported by the US DOC. If we continually operate at deficit levels then the only thing that will be exported is the labor force because American companies will not be able to compete with near free labor at the cost of lost dollars.

http://www.bea.doc.gov/bea/newsrelarchive/2005/trad1305.xls

[quote]ScottL wrote:
BB,

I had thought the codex issue dead in the US, but I had read…can’t find where that someone had tied CAFTA with the issue of the codex rules being forcibly imposed upon us.

Does this ring any bells, or make any sense to you?[/quote]

Scott
Yes, CAFTA does have to adhere to the Codex guidelines - shout it from the rooftops.

I’m assuming all the gung-ho Republicans knew that about CAFTA… right?

Scott, your officially a liberal democrat for bringing that up (even if your not) - this is after all, a partisan issue.

Of course based on the success of NAFTA, this is certainly a very small price to pay… HAHAHAHAHAHA… ohh, my abs.

Hey, apparently these people don’t know how good CAFTA will be for em’… pretty weird, huh?

Big Anti-CAFTA Protests Rock Guatemala
Associated Press
March 1, 2005

GUATEMALA CITY: Thousands of teachers, union workers, farmers, leftist politicians and academics waged massive street protests Tuesday against a pending free-trade agreement between Central America and the United States.

About 8,000 protesters, the majority of them teachers, demonstrated in the capital to demand that Congress not ratify the Central American Free Trade Agreement without holding a public referendum first.
http://www.gregspotts.com/main/2005/03/big_anticafta_p.html

Of course completely unlike most patriotic Americans, who when the government tells them to shove something up they’re ass, they say, “How far?”