NAFTA/CAFTA Benefits for America?

[expat_panama]

Are you really trying to argue that importing more goods than we export is good for the economy and unemployment?

Absolutely not! That's an excellent point and I can see how a quick scan would give you that mistaken impression.

Maybe I should have bold/blooded a large font with the key phrase:

...Let's look at the facts...

--and while some people's fetish is honking on a 'trade deficit', the fact's are that--

...A bigger trade deficit means more jobs while a lesser trade deficit comes with higher unemployment, shattered lives, and a weaker America...

So we need to be clear I'm not arguing (or even trying to argue) that trade deficits cause prosperity. I just wanted us to face the hard reality that trade deficits and prosperity do in fact, go together. Sure, one possibility is that prosperity causes a trade deficit and another is that something else is causing both, but I'm digressing.

 

[GHook93]

How does one dismantle a treaty ratified by congress?

NAFTA wasn't a treaty per se it was a CEA (Congressional Executive Agreement), a lesser international agreement.

The Treaty Clause (I think its in article II) requires a 2/3 vote byonly the Senate for a treaty to pass. A CEA requires a simple majority in both the house and senate. That is how NAFTA was passed. Of course all treaties still have to be constitional and can be tossed out by the Supreme Court.

But I digress. The Supremacy clause puts treaties and CEA on the same level as Federal Law, therefore, for Congress to change, modify or repeal a treaty, they just need to pass a new constitutional federal law doing so.

However, I believe Presidents have unilateral (meaning without Congress using executive orders pulled out of treaties). Carter did it will the Defense Treaty, he won in court. And Bush ended the Anti-Ballistic Missile Treaty via executive order.

When the Big O had a majority in the House and Senate, he could have easily ended or modified NAFTA, CAFTA and the non-barriers with China, he choose not to. That would have made him appear to help the economy and create jobs. If his focus was on that instead of Obamacare and the Republicans challenged him, I guarantee 2010 would have came out differently. I bet the D's would have a fillibustering beating 60+ votes in senate and strong majority in the House. Obamacare with a public option could have been voted in rather easily at that point (very scary)!

 

[GHook93]

How does one dismantle a treaty ratified by congress?

Probably unilaterially, since most of those FREE TRADE agreements we've made with our trade partners would be NUTS FOR THEM to end.

All it takes folks is the POLITICAL WILL to end them.

All US treaties can be unilaterally ended by us!

 

[GHook93]

Are you really trying to argue that importing more goods than we export is good for the economy and unemployment?

Absolutely not! That's an excellent point and I can see how a quick scan would give you that mistaken impression.

Maybe I should have bold/blooded a large font with the key phrase:

...Let's look at the facts...

--and while some people's fetish is honking on a 'trade deficit', the fact's are that--

...A bigger trade deficit means more jobs while a lesser trade deficit comes with higher unemployment, shattered lives, and a weaker America...

So we need to be clear I'm not arguing (or even trying to argue) that trade deficits cause prosperity. I just wanted us to face the hard reality that trade deficits and prosperity do in fact, go together. Sure, one possibility is that prosperity causes a trade deficit and another is that something else is causing both, but I'm digressing.

I don't buy it (no pun intended). China's economy and middle class is growing rapidly and they have a trade surplus. When Japan was kicking ass and taking names back in the 80s, they had a ginormous trade surplus. Germany is the most successful country in the EU and one of the most successful countries in the world and they have a HUGE trade surplus.

The crap that a trade deficit is good in any way is a bogus claim. Just like the claim that outsourcing all our manufacturing jobs to Mexico, Latin America and China some how creates more and better paying jobs here is bogus!

 

[Mad Scientist]

How does one dismantle a treaty ratified by congress?

So was he lying then or is he not keeping his promises now?

 

[Maseman]

In 1992 we had a $5.4 billion surplus with Mexico.
In 2007 we had a $40 billion deficit with Mexico!

Is the video that JB and I posted for source!

Did our exports to Mexico increase or decrease between 1992 - 2007?

Do increased exports mean more or fewer jobs in the US?

Did the number of Americans working increase or decrease between 1992 - 2007?

Did our personal wealth increase or decrease between 1992 - 2007?

Did the value of our stock markets increase or decrease between 1992 - 2007?

Do lower barriers to trade increase or decrease trade?

Do lower tariffs mean higher or lower prices for consumers?

Are lower prices better or worse for American citizens?

It may come as a surprise to you, but, historically speaking, our manufacturing, employment and GDP have expanded the most when our trade deficit is growing the fastest.

Go figure.

 

[GHook93]

In 1992 we had a $5.4 billion surplus with Mexico.
In 2007 we had a $40 billion deficit with Mexico!

Is the video that JB and I posted for source!

Did our exports to Mexico increase or decrease between 1992 - 2007?

Do increased exports mean more or fewer jobs in the US?

Did the number of Americans working increase or decrease between 1992 - 2007?

Did our personal wealth increase or decrease between 1992 - 2007?

Did the value of our stock markets increase or decrease between 1992 - 2007?

Do lower barriers to trade increase or decrease trade?

Do lower tariffs mean higher or lower prices for consumers?

Are lower prices better or worse for American citizens?

It may come as a surprise to you, but, historically speaking, our manufacturing, employment and GDP have expanded the most when our trade deficit is growing the fastest.

Go figure.

You care to back up any of your claims with facts or sources?

 

[Maseman]

Ahh, the great cornerstones of Free Trade.

You see the sharp dip from Clinton's Presidency. Two thinks happened. (1) NAFTA and (2) Removing trade barriers to China and helping get China in to the WTO. The other sharp dip was 2004 with CAFTA!

So having a drop in the 'trade deficit' is bad? Let's look at the facts.

A bigger trade deficit means more jobs while a lesser trade deficit comes with higher unemployment, shattered lives, and a weaker America. That's the choice, and I favor a strong and prosperous America more than some goofy so-called 'trade deficit'.

Oh, sure. The next thing you'll be telling us is that the current account and the capital account always end up balancing and that when other countries use their dollars to invest in our economy, rather than purchasing our goods and services, it allows us to accumulate the capital necessary to make entrepreneurs thrive and deliver innovation that makes us even more productive. Who'd a thunk it takes a lot of capital to grow a $14 trillion economy? I'll bet you even believe that increased productivity drives a higher standard of living.

Sheesh. I don't doubt you also think the USA serves as the locomotive for the global economy and that most other countries wish they had our trade deficit problems. Just look at Japan....they've sported massive trade surpluses for, well.......forever, yet they can't seem to get out from under two decades of deflation/recession. But, but.....they have a trade surplus!!

If only we could figure out a way to import less oil...what to do, what to do......

Of course, there will always be those who don't like the freedom to trade and will call for more government control of the economy......because government has such a long and successful track record of directing economies throughout history. What we need are more five year plans. We can't have people choosing what's best for their families at the store now, can we? Certainly government knows what's best for us.

These folks must believe that higher prices, in the way of increased tariffs -- along with quotas and other protection that wreaks havoc in the markets -- provides a far better solution to the perceived problem than companies actually competing for your business. Why become efficient and strive to please your customers when the government can protect your inability to do so?

We want higher prices and fewer choices now.....for the children!!!

 

[Maseman]

In 1992 we had a $5.4 billion surplus with Mexico.
In 2007 we had a $40 billion deficit with Mexico!

Is the video that JB and I posted for source!

Did our exports to Mexico increase or decrease between 1992 - 2007?

Do increased exports mean more or fewer jobs in the US?

Did the number of Americans working increase or decrease between 1992 - 2007?

Did our personal wealth increase or decrease between 1992 - 2007?

Did the value of our stock markets increase or decrease between 1992 - 2007?

Do lower barriers to trade increase or decrease trade?

Do lower tariffs mean higher or lower prices for consumers?

Are lower prices better or worse for American citizens?

It may come as a surprise to you, but, historically speaking, our manufacturing, employment and GDP have expanded the most when our trade deficit is growing the fastest.

Go figure.

You care to back up any of your claims with facts or sources?

I have lots of facts and sources but, apparently, until you get 15 posts under your belt, the forum won't allow them to be linked.

Nonetheless, if you were really interested in the facts surrounding NAFTA, you'd answer the questions I posed to you. You won't like the answers because they don't support your initial assertions, but the answers will absolutely elucidate the truth.

Now, I'll try and get to 15 posts as soon as I can. In the meantime, please answer my questions.

 

[expat_panama]

...I just wanted us to face the hard reality that trade deficits and prosperity do in fact, go together...

I don't buy it...

Of course you don't!

We all enjoy thinking we're so smart that all of our beliefs are true. We also all hate it when we see something that proves something wrong and makes us feel stupid. Most people want feeling smart more than seeing things that prove them wrong.

My situation's different because my work in the market means hiding from the facts can be very expensive, so I prefer being rich even if I don't feel so smart.

 

[Truthseeker420]

I hear the so called "capitalist" say that these agreements produce more US jobs. How does they? What jobs? What are the benefits?

(1) Jobs:
What jobs have been created. We know its not manufacturing jobs. Is it sales jobs? The competition between sales has driven sales job wages well down and creates extremely low job security.

R & D jobs. Seriously? We educate students from around the world. Many used to stay here (many illegally) and then work in America. Now they take the know-hows back to countries like Mexico and India and compete directly with American R & D jobs. Getting paid $40K annuall in India or Mexico makes you 10x richer (in terms of standard of living) than making $140K in America!

Construction jobs? Nope.

So where are the jobs created by NAFTA, CAFTA and other FTA?

(2) Lower Prices:
Food prices, gas prices and just about every price has shot up dramatically since these agreements have been put into place. People will say that its inflation, devaluation of the dollar and deficit, but that still won't make up for the fact that people are making less but playing 10x more.

The lower cost to business has not equated to the substantially lower cost to the America work to make up for the loss of all the US jobs.

(3) Increased Exports:
This is always what the Free Traders point out as the "see it works!" However, take our top ten, heck 15 trade partners and we have a deficit with all of them and its not just oil imports, its everything. Heck look at all the countries in CAFTA (Honduras, Costa Rica, El Salvador, Guatemala, Nicaragua, Dominica Republic and Peru), we have a trade deficit will all of them. There is something work there!

FTA are not working for us in their current state!

You know those were just lies to get Americans to accept NAFTA, NAFTA was for trans national corporations and things have never been better for them.

 

[Epsilon Delta]

(3) Increased Exports:
This is always what the Free Traders point out as the "see it works!" However, take our top ten, heck 15 trade partners and we have a deficit with all of them and its not just oil imports, its everything. Heck look at all the countries in CAFTA (Honduras, Costa Rica, El Salvador, Guatemala, Nicaragua, Dominica Republic and Peru), we have a trade deficit will all of them. There is something work there!

FTA are not working for us in their current state!

Just pointing out G, that actually all of those countries you mentioned have massive trade deficits with the US, not the other way around.

Anyway, NAFTA/CAFTA are theoretically good ideas, it's the way they are actually implemented that results in it benefit only the most advanced and strategically placed people in the system (ie, those with capital, rich people) at the expense of everyone else. There are many ways to benefit from free trade, but NAFTA/CAFTA do somewhat of a poor job at it.

 

[JBeukema]

How does one dismantle a treaty ratified by congress?

Elect me president and grant me emergency powers

 

[GHook93]

(3) Increased Exports:
This is always what the Free Traders point out as the "see it works!" However, take our top ten, heck 15 trade partners and we have a deficit with all of them and its not just oil imports, its everything. Heck look at all the countries in CAFTA (Honduras, Costa Rica, El Salvador, Guatemala, Nicaragua, Dominica Republic and Peru), we have a trade deficit will all of them. There is something work there!

FTA are not working for us in their current state!

Just pointing out G, that actually all of those countries you mentioned have massive trade deficits with the US, not the other way around.

Anyway, NAFTA/CAFTA are theoretically good ideas, it's the way they are actually implemented that results in it benefit only the most advanced and strategically placed people in the system (ie, those with capital, rich people) at the expense of everyone else. There are many ways to benefit from free trade, but NAFTA/CAFTA do somewhat of a poor job at it.

OK I stand corrected maybe Bush Jr negotiated a good trade agreement with CAFTA and Clinton negotiated a horrendous trade agreement with NAFTA! Thanks for the correction. I guess that is why few complain about CAFTA and most complain about NAFTA and the China removal barriers by Clinton.

Building on the Successes of Free Trade in Central America
Increased Trade

Since the adoption of CAFTA-DR, regional trade has increased dramatically, creating a boon for U.S. exporters. In 2007, the United States exported $22.4 billion to CAFTA-DR countries, a 14.4 percent increase from 2006. The U.S. trade surplus with those countries also enjoyed a dramatic increase, growing from about $1 billion in 2006 to almost $3.7 billion in 2007. That increase reversed a U.S. trade deficit of nearly $1.2 billion in 2005, the year before CAFTA-DR.

 

[uscitizen]

"Only Nixon can go to China" Spock sd 2318.2

 

[GHook93]

"Only Nixon can go to China" Spock sd 2318.2

God you're dense, would you go ahead and die already, J/K (sort of). Nixon opened up China to dipolmatic relationships. Clinton opened up the flood gates to allow them to take all our manufacturing jobs and for economic blocs of developing nations to challenge any move we make in the WTO!

 

[uscitizen]

"Only Nixon can go to China" Spock sd 2318.2

God you're dense, would you go ahead and die already, J/K (sort of). Nixon opened up China to dipolmatic relationships. Clinton opened up the flood gates to allow them to take all our manufacturing jobs and for economic blocs of developing nations to challenge any move we make in the WTO!

You just have no sense of humor at all.
Nixon did open the door though.

 

[Epsilon Delta]

(3) Increased Exports:
This is always what the Free Traders point out as the "see it works!" However, take our top ten, heck 15 trade partners and we have a deficit with all of them and its not just oil imports, its everything. Heck look at all the countries in CAFTA (Honduras, Costa Rica, El Salvador, Guatemala, Nicaragua, Dominica Republic and Peru), we have a trade deficit will all of them. There is something work there!

FTA are not working for us in their current state!

Just pointing out G, that actually all of those countries you mentioned have massive trade deficits with the US, not the other way around.

Anyway, NAFTA/CAFTA are theoretically good ideas, it's the way they are actually implemented that results in it benefit only the most advanced and strategically placed people in the system (ie, those with capital, rich people) at the expense of everyone else. There are many ways to benefit from free trade, but NAFTA/CAFTA do somewhat of a poor job at it.

OK I stand corrected maybe Bush Jr negotiated a good trade agreement with CAFTA and Clinton negotiated a horrendous trade agreement with NAFTA! Thanks for the correction. I guess that is why few complain about CAFTA and most complain about NAFTA and the China removal barriers by Clinton.

Building on the Successes of Free Trade in Central America
Increased Trade

Since the adoption of CAFTA-DR, regional trade has increased dramatically, creating a boon for U.S. exporters. In 2007, the United States exported $22.4 billion to CAFTA-DR countries, a 14.4 percent increase from 2006. The U.S. trade surplus with those countries also enjoyed a dramatic increase, growing from about $1 billion in 2006 to almost $3.7 billion in 2007. That increase reversed a U.S. trade deficit of nearly $1.2 billion in 2005, the year before CAFTA-DR.

Hmmm, that's curious, I was under the impression that we here in Central America had been running deficits with the US for decades, if not forever. Guess CAFTA did screw us over!!!!

No, but in all seriousness the reason CAFTA's never talked about is because it entails a great deal less money and people involved: DR and CA's combined economy is somewhere around one seventh of and it's population is about 2 fifths that of Mexico, and that's not even counting the fact that NAFTA also has Canada.

 

[Toro]

What were the welfare e¤ects of NAFTA? Real wages increased in all NAFTA countries and Mexico had the largest gains. Almost 90% of the welfare gains and half of the increase in real wages for Mexico can be attributed to having access to cheaper intermediate goods. Canada and the United States gained relatively more than Mexico from liberalizing against the rest of the world.

http://home.uchicago.edu/~lcaliend/Estimates_of_Trade_and_Welfare_Effects_of_NAFTA.pdf

According to the authors, NAFTA led to a 3.9% gain in real wages in Mexico, 1.1% in Canada and 1.0% in the US. All three countries also saw increased levels of trade because of NAFTA.

 

[JBeukema]

Your link is broken, Toro