The first was from growing up as the grandson of a union organizer, and the son of a union member. That reaction was why would a Democrat president work against the working man? We know that these countries don't play fair, so why not even the playing field on those wishing to take American jobs. But I guess he cleared it with his union buddy.
The second, coming from a student of economics, was that free trade is a great thing, as long as it is fair trade. Did you ever wonder how a trinket from say China could travel thousands of miles on a boat, then hundreds to thousands of miles farther on truck or train, and still be cheaper than the trinket made in the next county? While most of the time people blame labor costs, that is not entirely true. All governments, ours included, find ways to subsidize certain industries. When that subsidization occurs, the trade is no longer fair, and throughout history the target country has put a tariff on the product, to protect their workers.
Think of the inequalities between the Chinese and American economies. China has much more lax pollution regulations. While keeping our house clean is a good thing, the messy neighbor is able to save capital which is a part of the price of our trinket. To bring this in to the real world, I worked for a company that manufactured air chambered beds. They did not make the chambers here, simply because of expense. Regulations prohibited the manufacture, since too much pollution came off the process of fusing rubber together. They were forced to out source the production to a former east block nation. So while their beds are assembled here, the parts are made elsewhere, because of inequalities in law. But does not pollution carry in the wind? Does not what the Chinese do or don't do affect the entire globe, including us? How about the Indians, or Vietnamese? Or even Mexicans and other South American countries?
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Before we should pursue free trade, we should pursue fair trade. Fair trade is when both economies play by the same rules. So as an example since Canada and the United States are similar in regulation, free trade can ensue. Or even many countries in Western Europe. We need to decide as a nation whether we want to clean up the planet, or not worry about it. Many political discussions in our country focus on regulation. Some regulation is required, and in our system that regulation is decided by our elected officials. By buying items from nations that do not protect their environment, we are tacitly saying the environment is not important. We are being hypocritical. We point to our environmental laws and regulations and pat ourselves on the back, then allow those who do not give a wit about pollution to cut us off at the knees. That is not fair trade.
Tariffs are the mechanism that equals the playing field. They do increase the price of imported products, but that only makes them equal to domestic products, this encourages good environmental stewardship. As other countries come up to our standards, those tariffs should be reduced. Assuming that eventually all countries would come to our standards, then free trade makes sense. Until they come to our standards, tariffs are logical and appropriate. There are some inequalities with the price of labor, those also tend to go to equilibrium as the less developed country becomes more developed, and when matched with transportation costs are actually minor in the pricing of products.
So we would urge the President to pursue fair trade agreements aggressively. Free trade is unfair trade. We saw that with NAFTA under President Clinton. All the US companies that opened plants just across the Mexican border, did so because of unequal regulation. The same did not happen just across the Canadian border, because Canadian regulation would not offer the same savings. We lost too many manufacturing jobs because of this. If the President must promote free trade, then he should advise the EPA and Congress to change our laws, reducing regulation and environmental controls to make it truly free trade.
Spend Wisely!
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