NAFTA Years Later

[Plan Austral]

We had a deal with Carrefour to start exporting "steak" to France, the deal was cancelled because french farmers expressed their disagreement by burning down the trucks that were carrying the steak..

[Dinner]

Originally posted by Plan Austral
Oh, and how is that related to agriculture subsidies for example?

Argentina,Canada, New Zeland, Australia, we dont employ 6 years old kids in our farms..

Anyway, I am not anti-american, the french are worse.

We eliminated all farm subsidies for four years when the EU told us they'd do the same if we'd just take the lead. After four years of having them INCREASE their subsidies while our farmers had no direct payments we decided to stop waiting for Europe to make good on its promises and we restored the farm subsidies.

That can hardly be seen as the actions of a rabid protectionist.

[chequita guevara]

Originally posted by Oerdin
The protesters who endlessly moan about the world not being a communist utopia and that direct investment hasn't instantly made every place in the world as affluent as Beverly Hills are doing more to harm the world's poor then help them.

[size=7]STRAWMAN![size]

[Kidlicious]

Originally posted by Plan Austral
Oh, and how is that related to agriculture subsidies for example?

If I'm not mistaken most Americans are against farm subsidies. Unfortunately they are difficult to eliminate because of the way our political system works.

[Plan Austral]

Lol, Oerdin, I always thought you were scandinavian, not american.

[Dinner]

Originally posted by chegitz guevara

[size=7]STRAWMAN![size]

That is no straw man my friend. It is the simple truth.

[Dinner]

Originally posted by Plan Austral
Lol, Oerdin, I always thought you were scandinavian, not american.

I wouldn't mind living in Scandinavia; the taxes would suck but on the upside there'd be all those beautiful blond girls...

[MichaeltheGreat]

Originally posted by Sava
The people that benefit from NAFTA are generally only among the top 1% of income earners. And even in that bracket, the amount that are making money are an even smaller segment of the population.

Carajo!

Mexicans in Baja California inject about 10 billion a year into the California border economy by consumer goods purchases from cars to clothes to toilet paper and household goods. There are more Home Depots per square mile down near the border than anywhere else in the US, precisely because Mexican consumers come across to spend money.

High-wage, uncompetitive manufacturing benefits those people with those jobs, and a few who indirectly benefit from their spending, at the expense of everyone else who pays for that high-wage manufacturing in the prices of the goods they buy.

[Arrian]

MtG.

-Arrian

[SlowwHand]

Michael is a meathead, but that's old news to him.

[Master Zen]

As an economist and a Mexican, I have a few things to say about NAFTA and free trade in general:

1) Free trade is not a panacea. Every theoretical evidence can be countered by an equally convincing theory that it is not. And in practical terms, there is also no evidence supporting that it works either . Theorist never take into account each country's institutional strengths and weakeness and realize that that is what measures success or failure in every model. Countries like Korea and Taiwan, contrary to popular belief, did not accieve their success but opening their economies but rather by protecting them until they were ready, one industry at the time. And they were dictatorships too which throws in the garbage can any idea that democracy is also a panacea.

2) Free trade is not free until both sides play fair. And it is not fair when both sides cut tariffs yet one side still does not eliminate the BILLIONS in farm subsidies which make agriculture trade all but fair. It is argued that subsidies make the product cheaper so we get cheaper imported goods here. True. But how about all the people from local industry who en up unemployed? Just as true and it is an ever more terrible effect. Local light industry was shattered by NAFTA, because our government did not have the balls to insist for a gradual opening of barriers and which the US insisted on.

3) NAFTA is not the EU. The EU, despite having two heavyweights, France and Germany has a plethora of mechanisms to help out the smaller countries, and especially the poorer new members. No portuguese or spaniard can deny that integration to the EU has greatly given their countries a boost to catch up with the rest of the more prosperous northern european countries. NAFTA has none of this. It is simply an attempt by the US government to open markets for its products with absolutely no concern about fostering a "catch-up". Same with ALCA or whatever it's called in english (the Free trade zone for the Americas). One giant sweatshop factory stretching from the Rio Grande to Tierra del Fuego.

Whopdy ****ing doo...

[Master Zen]

Originally posted by MichaeltheGreat

Carajo!

Mexicans in Baja California inject about 10 billion a year into the California border economy by consumer goods purchases from cars to clothes to toilet paper and household goods. There are more Home Depots per square mile down near the border than anywhere else in the US, precisely because Mexican consumers come across to spend money.

Agreed, but how does this help the Mexican economy? Not one bit. If anything it's increasing the gap between our two countries. Personal wealth means nothing in national aggregate values if it is spent on goods and services of another country.

[Spiffor]

ALCA is called FTAA in English and ZLEA in French

[Kidlicious]

Originally posted by Master Zen


Agreed, but how does this help the Mexican economy? Not one bit. If anything it's increasing the gap between our two countries. Personal wealth means nothing in national aggregate values if it is spent on goods and services of another country.

You have to look at the overall trade balance. And I think that there is an overall injection into the US wrt goods. The problem is that there is cash flow out of Mexico into the US wrt to investment.

[Arrian]

Interesting points by Master Zen.

I think the most important one to note is the fact that many successful economies started out with protectist policies on their local industries (I seem to have hazy memories of some hefty tariffs used by the US back when we were a backwater ) and later opened up.

Makes sense to me. However, are the rich nations obligated to not retaliate if a poor nation protects its industries? So if Mexico wanted to really get into steel production, and set up high steel tariffs, should the US return the favor or do nothing (yeah, right, the steel industry here would go beserk)?

I'm actually asking, btw. What do you all think about that issue? On the one hand, it is in our long-term interests to see the 3rd world become more prosperous, but in the short-term, protectionism for their local industries would hurt us. Further, if no retaliatory protectionism is used, will those 3rd world nations not come to expect preferential trade deals (think of it in terms of a government entitlement. People get PISSED if the government is giving them something, and then it stops. Doesn't matter if it was "fair" for them to get it in the first place)?

Complex issue.

-Arrian