T Nation

Here is Some Free Trade

http://www.azcentral.com/news/articles/2008/08/09/20080809dieselfines-ON.html

What is your point?

[quote]Regular Gonzalez wrote:
What is your point?[/quote]

I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

Also Mexican trucking companies are competing for business on the American Mexican border.

And?

How about how US subsidized corn/wheat has destroyed the agricultural industries of countless countries including that of Mexico.

One of the many reasons I’m Libertarian.

[quote]Bellmar wrote:
And?

How about how US subsidized corn/wheat has destroyed the agricultural industries of countless countries including that of Mexico.

One of the many reasons I’m Libertarian.[/quote]

Or the fact that we pay 10 times the world price on sugar to prop up the corn industry. Or that we won’t import any ethanol.

We also have a long history of propping up the shipping industry. To be frank, I don’t know how much this has changed but at one time limited licenses for certain routes were bid on forcing others wishing to haul over those routes to pay fees to the route owner. We have also propped up many a marginal railroad.

There is still plenty of make work labor laws to prop up unions as well. I’ve been to plenty of trade shows were we had to hire a union guy to stand around and watch us work. There were also plenty of union guys standing around doing nothing at ground zero after 9/11 while non-union outfits worked. A company I worked with had to hire a union guy to turn on the generators in morning and stand around and watch it all day.

The point is our gov’t props up many industries to the detriment of all us. Cheap gas in Mexico is the least of our worries.

[quote]pittbulll wrote:
Regular Gonzalez wrote:
What is your point?

I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

Also Mexican trucking companies are competing for business on the American Mexican border.
[/quote]

So Mexico subsidizes the American consumer? Awesome.

[quote]pittbulll wrote:
I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.
[/quote]
You are only seeing one side of the argument. We ship less but we can buy more because Mexican goods are cheaper. Essentially the Mexican people are subsidizing our consumption.

Also, since Mexican traders do not spend US dollars in Mexico they must trade for US manufactured goods which are then transported via Mexican subsidies back to Mexico. Since we’re not just shipping IOUs (like to China) there is a two-fold benefit to the US economy – to consumers and producers.

[quote]Zap Branigan wrote:
So Mexico subsidizes the American consumer?[/quote]

Holy crap! I think I hear Henry Hazlitt happily weeping in his grave.

Maybe you do get it a little bit.

[quote]Zap Branigan wrote:
pittbulll wrote:
Regular Gonzalez wrote:
What is your point?

I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

Also Mexican trucking companies are competing for business on the American Mexican border.

So Mexico subsidizes the American consumer? Awesome.
[/quote]

There is truth to what you are saying, but our free trade agreements are to level the playing fields. Meaning each industry faces the same pressures. It is one of the same issues that are wrong with our agreements with China. Subsidies are defiantly an unfair advantage.
I think this goes back to if the world is one big market why do not we all use the same money? That would ensure we all get the very best purchasing power.
You see no advantage of having the majority of products sold in America to have been made in America? If we did that we possibly could handle the influx of illegal labors all seem to love so much.

[quote]LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

You are only seeing one side of the argument. We ship less but we can buy more because Mexican goods are cheaper. Essentially the Mexican people are subsidizing our consumption.

Also, since Mexican traders do not spend US dollars in Mexico they must trade for US manufactured goods which are then transported via Mexican subsidies back to Mexico. Since we’re not just shipping IOUs (like to China) there is a two-fold benefit to the US economy – to consumers and producers.[/quote]

I understand, but America could be in the same situation we are in the steel industry if we allow unfair trade strictly for the benefit of the consumer. I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.

[quote]pittbulll wrote:
LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

You are only seeing one side of the argument. We ship less but we can buy more because Mexican goods are cheaper. Essentially the Mexican people are subsidizing our consumption.

Also, since Mexican traders do not spend US dollars in Mexico they must trade for US manufactured goods which are then transported via Mexican subsidies back to Mexico. Since we’re not just shipping IOUs (like to China) there is a two-fold benefit to the US economy – to consumers and producers.

I understand, but America could be in the same situation we are in the steel industry if we allow unfair trade strictly for the benefit of the consumer. I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.
[/quote]

Most of the US problem with the steel industry is self-made. Tour steel factories in the US and Europe and you will see a difference. European factories are very clean considering the industry and remain profitable even with the high employment costs in Europe. This is partly because the European facilities heavily invest in technology, whereas the US factories have traditionally only completed required updates (obviously there would be exceptions on both sides). Canadian factories would fall somewhere in the middle.

[quote]pittbulll wrote:
I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.
[/quote]

There is a trade deficit but that has more to do with cheap and easy credit than it does with American manufacturing. Suffice it to say that we must trade equally or buy on credit since American dollars cannot be spent overseas. Luckily the weak dollar is making credit less available and US goods cheaper which will be a boon to American jobs and help to balance out trade.

One world currency could change that but then American manufacturing would be hurt very badly because there might be no reason to trade if they could take the money and spend it somewhere else. This happened occasionally on the gold standard.

[quote]Ruggerlife wrote:
pittbulll wrote:
LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

You are only seeing one side of the argument. We ship less but we can buy more because Mexican goods are cheaper. Essentially the Mexican people are subsidizing our consumption.

Also, since Mexican traders do not spend US dollars in Mexico they must trade for US manufactured goods which are then transported via Mexican subsidies back to Mexico. Since we’re not just shipping IOUs (like to China) there is a two-fold benefit to the US economy – to consumers and producers.

I understand, but America could be in the same situation we are in the steel industry if we allow unfair trade strictly for the benefit of the consumer. I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.

Most of the US problem with the steel industry is self-made. Tour steel factories in the US and Europe and you will see a difference. European factories are very clean considering the industry and remain profitable even with the high employment costs in Europe. This is partly because the European facilities heavily invest in technology, whereas the US factories have traditionally only completed required updates (obviously there would be exceptions on both sides). Canadian factories would fall somewhere in the middle.

[/quote]

I would agree, but America would have invested in better technology if the cost of their labor was not so high. Also I am not sure but there were probably some subsidies to boost the technology.

[quote]LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.

There is a trade deficit but that has more to do with cheap and easy credit than it does with American manufacturing. Suffice it to say that we must trade equally or buy on credit since American dollars cannot be spent overseas. Luckily the weak dollar is making credit less available and US goods cheaper which will be a boon to American jobs and help to balance out trade.

One world currency could change that but then American manufacturing would be hurt very badly because there might be no reason to trade if they could take the money and spend it somewhere else. This happened occasionally on the gold standard.[/quote]

I was not condoning one world currency that was meant to make my point. One world market is just as detrimental as a one world economy. It has some obvious up sides. Just like our weak dollar has some up sides. I would be willing to bet, there are money more down sides to our weak dollar than there are up.

[quote]pittbulll wrote:
LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.

There is a trade deficit but that has more to do with cheap and easy credit than it does with American manufacturing. Suffice it to say that we must trade equally or buy on credit since American dollars cannot be spent overseas. Luckily the weak dollar is making credit less available and US goods cheaper which will be a boon to American jobs and help to balance out trade.

One world currency could change that but then American manufacturing would be hurt very badly because there might be no reason to trade if they could take the money and spend it somewhere else. This happened occasionally on the gold standard.

I was not condoning one world currency that was meant to make my point. One world market is just as detrimental as a one world economy. It has some obvious up sides. Just like our weak dollar has some up sides. I would be willing to bet, there are money more down sides to our weak dollar than there are up.

[/quote]
If trade is voluntary the currency being used is irrelevant. But I think you are confusing currencies with economies. There is ONLY ONE economy. The number of currencies has nothing to do with anything – competition is good and monopolies are generally bad. It doesn’t matter if you trade wheat for sugar or gold; currency is just an exchange medium.

Let me offer a thought experiment to you: say you and your neighbor have a contract to exchange ducats for widgets; the price for ducats is in widgets and the price of widgets is in ducats. Your neighbor also has another contract with your other neighbor where he trades his ducats for whatchmacallits. Being that ducats seem to be a good medium of exchange it is now understood as “currency” by you and your neighbors. Now, if ducats are accepted for widgets by producers in an other neighborhood and you cannot offer an acceptable price on widgets (the ratio of widgets offered by you to ducats offered by him) then he will trade elsewhere.

[quote]pittbulll wrote:
Ruggerlife wrote:
pittbulll wrote:
LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

You are only seeing one side of the argument. We ship less but we can buy more because Mexican goods are cheaper. Essentially the Mexican people are subsidizing our consumption.

Also, since Mexican traders do not spend US dollars in Mexico they must trade for US manufactured goods which are then transported via Mexican subsidies back to Mexico. Since we’re not just shipping IOUs (like to China) there is a two-fold benefit to the US economy – to consumers and producers.

I understand, but America could be in the same situation we are in the steel industry if we allow unfair trade strictly for the benefit of the consumer. I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.

Most of the US problem with the steel industry is self-made. Tour steel factories in the US and Europe and you will see a difference. European factories are very clean considering the industry and remain profitable even with the high employment costs in Europe. This is partly because the European facilities heavily invest in technology, whereas the US factories have traditionally only completed required updates (obviously there would be exceptions on both sides). Canadian factories would fall somewhere in the middle.

I would agree, but America would have invested in better technology if the cost of their labor was not so high. Also I am not sure but there were probably some subsidies to boost the technology.

[/quote]

European factories invested in better technologies precisely because our wages, or rather wage related costs, are so high.

The US steel industry, protected for far too long, was no longer able to compete with us when the US suddenly found out that they cannot mess with us economically.

Since we are the bigger market and all.

[quote]orion wrote:
pittbulll wrote:
Ruggerlife wrote:
pittbulll wrote:
LIFTICVSMAXIMVS wrote:
pittbulll wrote:
I think there are many points here besides free trade, but back to free trade. Mexican Industry subsidizes it transportation of it products. America does no such thing so American Industry is at a disadvantage.

You are only seeing one side of the argument. We ship less but we can buy more because Mexican goods are cheaper. Essentially the Mexican people are subsidizing our consumption.

Also, since Mexican traders do not spend US dollars in Mexico they must trade for US manufactured goods which are then transported via Mexican subsidies back to Mexico. Since we’re not just shipping IOUs (like to China) there is a two-fold benefit to the US economy – to consumers and producers.

I understand, but America could be in the same situation we are in the steel industry if we allow unfair trade strictly for the benefit of the consumer. I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.

Most of the US problem with the steel industry is self-made. Tour steel factories in the US and Europe and you will see a difference. European factories are very clean considering the industry and remain profitable even with the high employment costs in Europe. This is partly because the European facilities heavily invest in technology, whereas the US factories have traditionally only completed required updates (obviously there would be exceptions on both sides). Canadian factories would fall somewhere in the middle.

I would agree, but America would have invested in better technology if the cost of their labor was not so high. Also I am not sure but there were probably some subsidies to boost the technology.

European factories invested in better technologies precisely because our wages, or rather wage related costs, are so high.

The US steel industry, protected for far too long, was no longer able to compete with us when the US suddenly found out that they cannot mess with us economically.

Since we are the bigger market and all.

[/quote]

I think the government could have negotiated with the Union and the Steel Companies to make concessions, in exchange for subsidies to upgrade technology. The way Reagan did it had devastating effects on the Steel Valley.

[quote]LIFTICVSMAXIMVS wrote:
Zap Branigan wrote:
So Mexico subsidizes the American consumer?

Holy crap! I think I hear Henry Hazlitt happily weeping in his grave.

Maybe you do get it a little bit.
[/quote]

‘Economics in One Lesson’ should be required reading in high school.

[quote]pittbulll wrote:

There is truth to what you are saying, but our free trade agreements are to level the playing fields. Meaning each industry faces the same pressures. It is one of the same issues that are wrong with our agreements with China. Subsidies are defiantly an unfair advantage.
I think this goes back to if the world is one big market why do not we all use the same money? That would ensure we all get the very best purchasing power.
You see no advantage of having the majority of products sold in America to have been made in America? If we did that we possibly could handle the influx of illegal labors all seem to love so much.
[/quote]

You are looking a gift horse in the mouth, much like our gov’t is with china. Who wouldn’t what steel at one sixtenth the cost? What if they gave to us for free, would that be ok or do you still think it would be bad for our economy?

There is not advantage to having all the products we buy being made in america, just like there is no advantage to having everything you consume produced by only your relatives. You produce the things you have the greatest comparative advantage and trade for the rest.

[quote]pittbulll wrote:

I understand, but America could be in the same situation we are in the steel industry if we allow unfair trade strictly for the benefit of the consumer. I would be willing to bet America is importing a lot more than we are exporting. Same situation we are having with oil, right now.
[/quote]

The health of one industry is irrelevant to the overall health of the country. The automobile example is used often. Becuase of automobiles the horse and buggy industries dried up. Are we worse of without them?

Also trade deficits are just calculations and inaccurate ones at that. If it were possible, shipping less and getting more in return would be a good thing. Would you rather I gave you 5 apples for one orange or 1 apple for one orange?