It was just a brief, but it summarized what I’ve read in lengthier reports nicely, and Trade Office reports are frequently cited in the literature as authoritative, so I posted it.
Actually, it was: Trade increased, productive investment increased, jobs increased, manufacturing output increased, compensation increased.
The protectionist policies you’re advocating would not solve that problem. NAFTA resulted in a massive increase in exports to Mexico and Canada and the balancing of agricultural trade between the US and Mexico. You haven’t supplied any coherent reason why NAFTA should be repealed.
You mean, such as, in addition to trade numbers, you’d want to look at productive investment, jobs, manufacturing output, and compensation? I agree.
OK, explain that to the foreign auto companies that build cars in the American South and to the 150,000 non-unionized employees who are happy making good money in stable jobs.
Only 7% of private sector workers in the US are in a union (35% of public sector employees are in a union). Using the very simple logic that the US trade representative uses in his summary but just turning it on it’s head I could just as easily say that due to the huge decline in union membership has caused the domestic economy has weakened. That’s the type of logic that is often used in debate on this subject. I think it’s clear unions are not the biggest problem the US has right now. Germany has 30% of it’s workforce unionised, can I argue that that is the key to Germany’s success? I’m sure you will agree it’s a lot more complicated than that.
These types of statistics and summaries have a real 'workers central party annual report ’ ring to them i.e. they just list out a load of statistics with not one mention of negativity or balance. This year we built 521,000 km of double laned asphalt highway which resulted in 67.23% GDP growth.
No NAFTA is not all bad, but who benefits most and who lost most. Is the loss worth the gain? It’s hard to argue from the circumstantial evidence that NAFTA is a success for the ‘average’ guy in the US.
In fact, Honhai, at one point, employed 400K in their main factory alone in Shenzhen. That excludes their other plants, offices in Taiwan, PRC, and EMEA, Americas, etc. I think they employed close to 1MM total. now think of the trickle-down in not only the extra markets and their labour force, but also the industries required for those services: F&B (commodities, construction, etc.), RE (then construction, etc.), transpo (auto manufacturing, etc.), entertainment (technology, construction, etc.), (logistics, transpo, trade to make that happen) etc. etc. pretty crazy
Remember the ant and the grasshopper? The Chinese have their own version of that, and the PRC government tends to look at things long-term scale, because they have the benefit of their histories. Case in point, the PRC submarine program. throw a little Lao Tzu in there (the 1000 li journey begins with 1 step) and you’ve got a steamroller of a turtle moving 2mph, slow but inexorable.
or Asimov’s Spacers v. Settlers? Think who edged out in that and for what reasons?
Okay, so let’s say the little American guy is the loser in all of this. No one (on that side of the argument) has addressed how if America slaps tariffs on imports why other nations wouldn’t do the same and pretty soon, no one is exporting to anyone else (well, they might be trading with each other, but not with America). How does that allow Americans to continue to increase their standard of living rather than simply become some sort of giant, insular circle jerk where everyone tells each other how freakin’ awesome they are? Didn’t we see that before with the Soviet Union? Didn’t the re-unified Germany have all sorts of issues bringing the former East Germany up to speed? When it all falls in a heap, you emerge decades behind the game.
“America” has both losers and winners living in its lands. it’s a mistake to think of one “america”. this is a class war.
Soviet Union didn’t actually create any wealth or improvements in standard of living beyond a certain point. they were pretty good with educating everyone, but didn’t they go bankrupt.
To many Germans I’ve spoken with (meaning 10-12), E. Germany is still not up to speed; it’s actually a black hole which the rest of the country must contribute its money to.
Regardin 1., again, this whole notion of a class war in America is kind of absurd. Americans have more of everything right now than any other group of people – including aristocrats and monarchs – in history. They’re eating themselves to death. The amount of sugar one American now eats and drinks in one month is probably more than the average American or anyone else ate in their entire lifetimes one hundred years or more ago. People in America still live in houses that would house entire villages in other parts of the world (in this respect, monarchs probably outdid them, but only just). They have Playstations and iPods with thousands of songs on them. This is stuff no one in the past could even have conceived of. They have a dozen pairs of jeans in their cupboard and buy dozens of pairs of shoes throughout their lifetime. This is not Russian peasants circa 1917 kind of class warfare.
[quote=“GuyInTaiwan”]Jack Burton: 2. and 3. make my point, I think.
Regardin 1., again, this whole notion of a class war in America is kind of absurd. Americans have more of everything right now than any other group of people – including aristocrats and monarchs – in history. They’re eating themselves to death. The amount of sugar one American now eats and drinks in one month is probably more than the average American or anyone else ate in their entire lifetimes one hundred years or more ago. People in America still live in houses that would house entire villages in other parts of the world (in this respect, monarchs probably outdid them, but only just). They have Playstations and iPods with thousands of songs on them. This is stuff no one in the past could even have conceived of. They have a dozen pairs of jeans in their cupboard and buy dozens of pairs of shoes throughout their lifetime. This is not Russian peasants circa 1917 kind of class warfare.[/quote]
actually, i was lost on your point. (and I don’t say that spitefully, just am lost)
for 1., to me, it’s a different class war than 1917, agreed. this is about wealth v. possessions. Most Americans do have more than most; this I do not debate and try to impress on my friends in the US how good they have it. that said, most of them are in debt and will be for decades - that is where the class war lies. wealth v. buying on credit, paying taxes, and not owning much in the end (relatively speaking and relative to what you earn) e.g. compared to 2 generations above. but yes, compared to the average person outside the US, americans are spoiled brats with too much candy, intoxicated, and bent on consuming to excess… hmmm now i forget my point.
edit:
GIT: “This is not Russian peasants circa 1917 kind of class warfare.”
JB: “And it doesn’t have to be in order for class war to happen.”
My point above was that the economy of a country, once it becomes that inwardly focussed, becomes like the English teaching industry here where everyone expends a lot of time and money working towards things that are internally important, but that don’t actually make sense, or allow people to function, in the real world.
Yeah, Americans probably could do a lot to look at quality of life rather than just having possessions, and they would do well to work out what they can really afford and how, but it’s deeply ingrained in the culture at this point. Those kind of things are probably not something that’s so easy to change. At some level, people do know that they can’t simply put everything on credit, yet there’s some sort of disconnect between what they know and how they act. We’d need to look at the mechanisms behind that, but it’s really complex and I’m not sure that people would welcome that. In a related way, people get really up in arms about the notion that government would try to tell them what to eat or limit such things, and they come out with comments such as, “I don’t need government to tell me what to eat.” Perhaps government isn’t the right one to do that, but evidently, someone needs to because evidently (based upon the obesity statistics), people don’t know how to eat properly. There is, at once, a culture of expectation and entitlement, yet at the same time, a complete abrogation of responsibility for consequences.
Why when you argue for ‘rebalancing’ does the argument keep coming back in black and white? Nobody is arguing for slapping on 50% tariffs or anything like that.
Newsflash- the US is STILL the world’s biggest market. You think companies and countries like China can afford to be locked out of that market. The US domestic market is key to it’s power and it needs to maintain that to remain a strong and successful country rather than becoming a banana republic with a government beholden to an elite and a relatively impoverished underclass. The elite can live off export earnings but why bother going down that route…it’s not neccessary!
As if countries are going to retaliate the most they are going to do is copy the % tariff that the US applied, to do otherwise will endanger their access to their number 1 market. Countries like China, Taiwan and Korea need the US, without the US market they just can’t prosper, at least not yet.
Is this small tariff a big problem for US multinationals, not really, most of their manufacturing is based in China or other countries these days anyway. It is a problem though if they want to import their goods from outside into the US and that will encourage them to setup shop at home.
10% import tax won’t matter a great deal to multinational US companies but it will matter a hell of a lot to domestic companies trying to compete with Chinese companies using the advantage of an undervalued yuan or Indian service companies paying peanuts for salaries.
I think a lot of folks are blind here, the Chinese have an undervalued yuan, that completely negates the argument for ‘open trade’. They also have many other schemes to block foreign competitors. What’s wrong with Americans playing for America like Chinese playing for China. Weird.
I don’t follow your reasoning there. China’s undervalued currency simply means that they are giving away their resources to foreigners at less than fair value. That has two consequences for China: firstly, they will continue to fuck up their environment until they are gasping for breath and pissing blood, just to get a fistful of dollars (fiat currency with no inherent value). Secondly, those dollars will buy very little in US markets. Stifling the flow of imports exacerbates that situation; lots of (foreign) paper money flowing in, and nowhere for it to go. In other words, they’re shooting themselves in the foot, while the American consumer is laughing all the way to the bank.
Unilaterally lowering trade barriers on the US side will benefit Americans, because even more stuff from China will flow in at deeply discounted prices, while the Chinese get next-to-nothing in return. Eventually, the trade imbalance will become so acute on the Chinese side that they will be forced to lower their own tariffs in order to make use of all those accumulated dollars.
[quote=“GuyInTaiwan”]Jack Burton: 2. and 3. make my point, I think.
Regardin 1., again, this whole notion of a class war in America is kind of absurd. Americans have more of everything right now than any other group of people – including aristocrats and monarchs – in history. They’re eating themselves to death. The amount of sugar one American now eats and drinks in one month is probably more than the average American or anyone else ate in their entire lifetimes one hundred years or more ago. People in America still live in houses that would house entire villages in other parts of the world (in this respect, monarchs probably outdid them, but only just). They have Playstations and iPods with thousands of songs on them. This is stuff no one in the past could even have conceived of. They have a dozen pairs of jeans in their cupboard and buy dozens of pairs of shoes throughout their lifetime. This is not Russian peasants circa 1917 kind of class warfare.[/quote]
I don’t agree, I saw footage of New Orleans and it shocked me how badly off some of the society is in the US. That was a real mess and it was obviously connected to class and race. Poor folks in the US aren’t starving but they can’t afford decent food or healthcare either.
I don’t follow your reasoning there. China’s undervalued currency simply means that they are giving away their resources to foreigners at less than fair value. That has two consequences for China: firstly, they will continue to fuck up their environment until they are gasping for breath and pissing blood, just to get a fistful of dollars (fiat currency with no inherent value). Secondly, those dollars will buy very little in US markets. Stifling the flow of imports exacerbates that situation; lots of (foreign) paper money flowing in, and nowhere for it to go. In other words, they’re shooting themselves in the foot, while the American consumer is laughing all the way to the bank.
Unilaterally lowering trade barriers on the US side will benefit Americans, because even more stuff from China will flow in at deeply discounted prices, while the Chinese get next-to-nothing in return. Eventually, the trade imbalance will become so acute on the Chinese side that they will be forced to lower their own tariffs in order to make use of all those accumulated dollars.[/quote]
It’s good to look at the reasons for one’s conclusions. One could fairly say that China is indeed providing products too cheaply and that is causing environmental problems, however I think that is a different issue in and of itself.
As for building up such a massive amount of dollars that loses value, that is also a worry for the government. However the Chinese aren’t stupid, they WILL try to spread that reserve into other investments. That is 2 trillion of dollars…even if they lose half of that value that’s 1 trillion dollars in positive territory. I think it’s a weak argument to try and turn that into a negative.
The main argument here is why companies invest where they do and employ people where they do and what makes a country strong or weak. In anything in life there are push and pull factors…as anybody involved in negotiation knows you go in with a bunch of weapons at your disposal, some visible, some invisible, some real, some bluff. You don’t rule in or out anything that is negative to yourself until absolutely neccessary. By the US continually stating it is for WTO and ‘no tariff’ it is always going to go to the negotiating table with it’s poker hand half visible Texas Hold 'Em style. The Chinese just keep their cards to themselves, put on their sun glasses and make weird noises every now and then to keep everybody guessing as to what they are doing. The only certainty in the game is that the Chinese are playing for THEMSELVES. So why is America not playing for ITSELF. You’ve got look at who benefits and work back from that and then start to draw your own conclusions…who benefits…who loses.
The American consumer and the Chinese laborer are the big winners in a tariff free world. The only obvious losers in America are those who work, or worked, in unskilled manufacturing jobs. Almost 80% of Americans are employed in services. For the vast majority on Americans, free trade means lower prices. :bravo:
America is ‘playing for’ the vast majority of Americans
The trend away from unskilled manufacturing is found across the OECD. So, resistance is useless!
Hence, why I think the class war in America is more evident. Certainly, CCP party members are in it for themselves and their kin, but their interests in this tend to align with national interests (and as do the other stakeholders). In America, there is conflict of interests and stakeholders may not be on your side, the middle class side, the workers side or “America’s” side, whatever that means. generalisation, yes.
The American consumer and the Chinese laborer are the big winners in a tariff free world. The only obvious losers in America are those who work, or worked, in unskilled manufacturing jobs. Almost 80% of Americans are employed in services. For the vast majority on Americans, free trade means lower prices. :bravo:
America is ‘playing for’ the vast majority of Americans
The trend away from unskilled manufacturing is found across the OECD. So, resistance is useless![/quote]
Making engines is not unskilled manufacturing, nor is semiconductor manufacturing etc, your argument doesn’t match reality. Yes consumers benefit but only as long as they their debt level doesn’t become unsustainable and they have income to buy stuff, both public and private debt. The real problem in America is that it hasn’t been producing enough jobs and that is feeding into a cycle of debt and weakening domestic economy. Service sector jobs are linked with manufacturing just like they were with construction. America could solve it’s problems with full employment and income that grows with inflation but how is that going to happen solely with a consumer or service economy?
They don’t have a serious answer. I suppose at some level, even protectionists understand that a 10% tariff against products that return 4-7% margins would be absolutely devastating. Or perhaps I am wrong. Maybe they don’t know what “margin” means, who knows. But the fact remains that protectionist measures have historically and would in the future result in countermeasures from foreign governments.
The other chestnut we hear about from the protectionists is the “undervaluing of the yuan”. A few points. First, we are complete hypocrites whenever the president or secretary of state asks China to let the yuan rise. The US manipulates our own currency as we see fit by expanding and contracting the flow of government securities in the market. Second, I agree that Chinese currency manipulation places US producers of low-margin goods at a disadvantage, but the reality is that we are no longer competitive with such products for a variety of other reasons. Third, we have limited options. We can choose to initiative punitive tariffs, surely resulting in Chinese countermeasures, prompting further action from us, etc. to the detriment of all, or we can continue to pursue free trade agreements with other nations (like South Korea). I’ll take the latter option. Free trade is fundamentally a boon to standards of living for both sides, and the protectionists have not refuted this fact (other than to offer isolated counter-examples).
The problem is I don’t believe in the actual reality on the ground of free trade and I have explained earlier how it is manipulated by different interest groups within a county and between countries. Apart from that countries like the US and China have massive internal markets, they are different than smaller countries and have massive leverage to work the market to their advantage, it just so happens China works it one way and America works it another way. Resource rich nations or religious fundamentalist nations work it another way yet again, theory and practice are two different things. I have a lot of experience in international trade and understand the relative influence of margin very well. That’s why I say tipping the equation in one way or another is fair game.
The undervaluing of the yuan is causing real problems and is one of the major reasons that the US is printing dollars. This is a direct consequence of the type of ‘free trade’ practiced between the US and China. China won’t budge on the yuan in reality and therefore the US has given up on trying to make them budge (the Chinese just played for time for years on that, they are masters of the game) and now devaluing the USD has the handy side effect of inflating the debt away. It just illustrates that free trade agreements often just move the battle to some other point of leverage.
If something is broke you fix it, not worry about hypothetical problems in the future which are unlikely to get out of control as I also explained. I saw the recent FTA with Korea, does anybody believe that will benefit the US more than Korea? Korea is very strong in advanced manufacturing and large industrial projects such as nuclear power plants and shipbuilding, it will bring a lot of competition to local firms in US big and small, it’s going to be tough to maintain employment locally in The US once again and dollars will be flowing back to Korea. What will the US sell to Korea, agri products I guess. Oh yeah but for some reason it’s okay to protect agribusiness in the US but not manufacturing, I just don’t get it. This is more about choosing winners and losers. Why sign a free trade agreement in this case? Who benefits?
Can anybody explain to me how this will create more jobs than it will lose? And please don’t bring in theoretical arguments that the pie is going to get bigger. I can predict what will happen. Some sectors in the US will be benefit such as agri and maybe to a small extent medical and pharmaceutical. Most sectors will face increased competition due to larger volume of imported goods and as a result there will be net job loss in the US. South Korea will almost certainly see net gain in employment or at least it’s Chinese subsidiaries will! According to the FTA up to 65% of goods can be manufactured in a 3rd country, for instance auto parts for Korean car Plants in the US. Of course with the FTA in place they can export the finished product directly to the US now, whether that is automobiles, consumer electronics, ships, power plants, textiles, steel, machine goods, chemicals etc etc.
It’s really BS to claim this will be jobs positive for the US.
