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CAFTA-Another Perspective

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Mike

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CAFTA: Amnesty for Trade Cheats
Articles

Congressman Charles Norwood, June 17, 2005


Georgia chicken farmers are trying to sell poultry in Central America under a 160% import tariff, while Central American farmers sell their chicken in America tariff-free. Any five-year old will tell you that’s cheating. So what are we going to do about it?

The global trade crowd says we ought to reward these “competitors” by offering them the chance to cheat us on textiles and sugar, by approving the Central American Free Trade Agreement, or CAFTA. Amnesty for trade cheats, just like the same crowd’s proposals on amnesty for illegal aliens.

“Let’s open foreign markets to American goods”. That battle cry has been the mantra of the globalists for the past decade. It was their whole rationale for pushing the United States – against public opinion – away from America’s historically proven bilateral trade agreement system.

We enjoyed our last trade surplus - $12.4 billion – in 1975. Decades of government regulation, trade union demands, and the unfair trade policies of international competitors like Japan were finally taking their toll. By 1994, the United States was posting consistent trade deficits, recording a $98 billion dollar deficit.

That brought the globalists into play, negotiating multi-nation “mega deals” in which other countries were allowed to ship either low-tariff or completely tariff-free goods into the United States, while we agreed to continued tariffs on our goods to their countries, like the chicken-cheating deal we agreed to as part of the Caribbean Basin Initiative.

The argument then and now for this economic stupidity is the same. We lose some jobs and markets, but overall, our exports will increase, as foreign countries that currently protect their markets through high tariffs agree to lower them on some things - as long as we agree to lower ours more, or eliminate them entirely.

The first, the granddaddy of all the giveaways, passed Congress in 1994 – the North American Free Trade Agreement, NAFTA. Mexico and Canada were our largest trading partners, and this deal would further “open their markets to American goods.”

In 1994, we still had a $1.3 billion trade surplus with Mexico. Today, as a direct result of NAFTA, we have a $45 billion trade deficit. In 1994, we had a $14 billion trade deficit with Canada. Today, we have a $66.5 billion deficit.

But to the globalists, this is all good. For while we lost good paying manufacturing jobs and markets, U.S. exports did in fact increase. Exports to Mexico jumped from $51 billion in 1994 to $111 billion in 2004. Exports to Canada grew from $114 billion in 1994 to $190 billion in 2004.

It’s just that imports grew a lot faster than exports. So while our sales to Mexico grew 118%, our purchases grew 215%. Sales to Canada went up 66%; imports from Canada grew 100%.

The undeniable end result is a net loss of dollars and jobs to Americans. A few people gained; the majority lost.

NAFTA alone is bad enough, but the globalists have piled one bad trade deal on top of the next ever since. Congress approved U.S. membership in the World Trade Organization (WTO) in 1995, and the Caribbean Basin Trade Partnership Act and the Africa Growth and Opportunity Act in 2000.

But that still wasn’t enough. We still needed to “open more markets to American goods.”

So we approved Permanent Normal Trade Relations to Communist China in 2000, in spite of the fact we knew they used slave labor in their Red Army-owned factories.

The result? The percentages weren’t as bad as Mexico and Canada due to the fact we sold little to China to begin with. But the result in real dollars is appalling. Between 2000 and 2004, U.S. exports to China grew $18 billion; U.S. imports shot up $97 billion. We ended with a net loss of $162 billion for 2004 alone.

China further rewarded our trust by passing a new law giving advance approval for the Red Army to invade our ally Taiwan.

Then we gave the President Fast Track Trading Authority in 2002 to get us into these messes more quickly in the future. No point dragging our feet down the road to ruin. That $98 billion trade deficit in 1994 has now exploded to $618 billion last year, thanks to these policies.

The essence of stupidity is defined in those who simply cannot learn from experience.

In spite of these glaringly failed trade policies costing 3 million American manufacturing jobs, now the precise same special interest lobbyists are demanding we pass CAFTA, “to open markets to American goods.”

Like all the other give-way deals, this one attempts to divide and conquer U.S. business interests. Our farmers are told this will finally eliminate those unfair tariffs against our farm products, while failing to tell them this only occurs after another 15 years of tariffs against their products, which will likely put them out of business. Our textile folks are told this won’t hurt jobs, because all the jobs that could be hurt are already lost. The only ones who will lose business is the sugar industry, so we ought to sacrifice them so the others can gain – which they won’t.

It’s the same argument as every other trade deal. We were told we would lose textile jobs to Mexico under NAFTA, but other industries would prosper, so to heck with those backward textile folks.

The European Union then used the WTO deal to threaten our agriculture industry with tariffs and boycotts unless we sacrificed our airliner production or changed our internal tax laws.

This past summer, the Red Chinese threatened our sawmills with a boycott unless we agreed not to enforce our dumping laws against their illegal furniture exports. They very shrewdly attempted to pit our timber industry against our furniture manufacturers.

And just in case you’re a cotton farmer thinking CAFTA’s okay because you’ll do okay – wrong, you’re next.

Even now the Bush Administration is moving to gut our cotton production programs to satisfy the demands of Brazil. Brazil is threatening to steal the patents of our pharmaceutical, movie, music, and computer industries unless we agree to allow Brazilian cotton to undermine U.S. cotton production. So we have the drug, computer, and entertainment companies pitted against our cotton farmers.

Every new trade deal we pass sacrifices another U.S. industry, and more U.S. jobs, to satisfy the globalists, who care nothing for the economic well-being of America or any other nation, as long as they make their percentage off these bad deals.

This time, let’s consider an alternative. Instead of CAFTA, how about a new law that places a 160% tariff against CAFTA nation imports unless they remove their tariff against our farmers? If it ends trade with CAFTA nations, they are hurt more than us. We have big trade deficits with CAFTA countries that would be eliminated in the process.

If Brazil can’t live with our cotton program, then we shouldn’t live with Brazilian imports. That will free up another $7.2 billion in trade deficit we ran up last year.

Fear of trade wars? There is obviously no fear among our competitors, as they threaten industry-after-industry here in the U.S with impunity.

Fear of alienating these Central American countries? We can’t do much worse than at present. Here’s how often they voted against our positions at the United Nation’s last year: Honduras, 76%; Guatemala, 76%; Nicaragua, 74%; El Salvador, 76%; Panama, 77%. All while taking millions in American foreign aid, and taxing our goods at 160% while we let them ship here duty-free. A little alienation from this crowd might do us some good.

CAFTA is just one more in an unbroken chain of bad trade deals that sacrifice our industries, markets, and jobs, with a deceitful promise that other industries will prosper as a result. Then we sacrifice those industries in the very next deal.

It’s time for smart and fair U.S. trade policies. A pre-requisite for any such policies is that they benefit the vast majority of Americans, at the unfair expense of no one.

CAFTA fails that test on all counts. And if it passes, just remember – you’re next.

About the author: http://www.house.gov/norwood/.
 

PORKER

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PS.
If we would DEVALUE the US$ down to the Brazilian $Real their would be no IMPORTS as the costs of transportion would put a damper on exports from every country in the world!
 

agman

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Mike said:
CAFTA: Amnesty for Trade Cheats
Articles

Congressman Charles Norwood, June 17, 2005


Georgia chicken farmers are trying to sell poultry in Central America under a 160% import tariff, while Central American farmers sell their chicken in America tariff-free. Any five-year old will tell you that’s cheating. So what are we going to do about it?

The global trade crowd says we ought to reward these “competitors” by offering them the chance to cheat us on textiles and sugar, by approving the Central American Free Trade Agreement, or CAFTA. Amnesty for trade cheats, just like the same crowd’s proposals on amnesty for illegal aliens.

“Let’s open foreign markets to American goods”. That battle cry has been the mantra of the globalists for the past decade. It was their whole rationale for pushing the United States – against public opinion – away from America’s historically proven bilateral trade agreement system.

We enjoyed our last trade surplus - $12.4 billion – in 1975. Decades of government regulation, trade union demands, and the unfair trade policies of international competitors like Japan were finally taking their toll. By 1994, the United States was posting consistent trade deficits, recording a $98 billion dollar deficit.

That brought the globalists into play, negotiating multi-nation “mega deals” in which other countries were allowed to ship either low-tariff or completely tariff-free goods into the United States, while we agreed to continued tariffs on our goods to their countries, like the chicken-cheating deal we agreed to as part of the Caribbean Basin Initiative.

The argument then and now for this economic stupidity is the same. We lose some jobs and markets, but overall, our exports will increase, as foreign countries that currently protect their markets through high tariffs agree to lower them on some things - as long as we agree to lower ours more, or eliminate them entirely.

The first, the granddaddy of all the giveaways, passed Congress in 1994 – the North American Free Trade Agreement, NAFTA. Mexico and Canada were our largest trading partners, and this deal would further “open their markets to American goods.”

In 1994, we still had a $1.3 billion trade surplus with Mexico. Today, as a direct result of NAFTA, we have a $45 billion trade deficit. In 1994, we had a $14 billion trade deficit with Canada. Today, we have a $66.5 billion deficit.

But to the globalists, this is all good. For while we lost good paying manufacturing jobs and markets, U.S. exports did in fact increase. Exports to Mexico jumped from $51 billion in 1994 to $111 billion in 2004. Exports to Canada grew from $114 billion in 1994 to $190 billion in 2004.

It’s just that imports grew a lot faster than exports. So while our sales to Mexico grew 118%, our purchases grew 215%. Sales to Canada went up 66%; imports from Canada grew 100%.

The undeniable end result is a net loss of dollars and jobs to Americans. A few people gained; the majority lost.

NAFTA alone is bad enough, but the globalists have piled one bad trade deal on top of the next ever since. Congress approved U.S. membership in the World Trade Organization (WTO) in 1995, and the Caribbean Basin Trade Partnership Act and the Africa Growth and Opportunity Act in 2000.

But that still wasn’t enough. We still needed to “open more markets to American goods.”

So we approved Permanent Normal Trade Relations to Communist China in 2000, in spite of the fact we knew they used slave labor in their Red Army-owned factories.

The result? The percentages weren’t as bad as Mexico and Canada due to the fact we sold little to China to begin with. But the result in real dollars is appalling. Between 2000 and 2004, U.S. exports to China grew $18 billion; U.S. imports shot up $97 billion. We ended with a net loss of $162 billion for 2004 alone.

China further rewarded our trust by passing a new law giving advance approval for the Red Army to invade our ally Taiwan.

Then we gave the President Fast Track Trading Authority in 2002 to get us into these messes more quickly in the future. No point dragging our feet down the road to ruin. That $98 billion trade deficit in 1994 has now exploded to $618 billion last year, thanks to these policies.

The essence of stupidity is defined in those who simply cannot learn from experience.

In spite of these glaringly failed trade policies costing 3 million American manufacturing jobs, now the precise same special interest lobbyists are demanding we pass CAFTA, “to open markets to American goods.”

Like all the other give-way deals, this one attempts to divide and conquer U.S. business interests. Our farmers are told this will finally eliminate those unfair tariffs against our farm products, while failing to tell them this only occurs after another 15 years of tariffs against their products, which will likely put them out of business. Our textile folks are told this won’t hurt jobs, because all the jobs that could be hurt are already lost. The only ones who will lose business is the sugar industry, so we ought to sacrifice them so the others can gain – which they won’t.

It’s the same argument as every other trade deal. We were told we would lose textile jobs to Mexico under NAFTA, but other industries would prosper, so to heck with those backward textile folks.

The European Union then used the WTO deal to threaten our agriculture industry with tariffs and boycotts unless we sacrificed our airliner production or changed our internal tax laws.

This past summer, the Red Chinese threatened our sawmills with a boycott unless we agreed not to enforce our dumping laws against their illegal furniture exports. They very shrewdly attempted to pit our timber industry against our furniture manufacturers.

And just in case you’re a cotton farmer thinking CAFTA’s okay because you’ll do okay – wrong, you’re next.

Even now the Bush Administration is moving to gut our cotton production programs to satisfy the demands of Brazil. Brazil is threatening to steal the patents of our pharmaceutical, movie, music, and computer industries unless we agree to allow Brazilian cotton to undermine U.S. cotton production. So we have the drug, computer, and entertainment companies pitted against our cotton farmers.

Every new trade deal we pass sacrifices another U.S. industry, and more U.S. jobs, to satisfy the globalists, who care nothing for the economic well-being of America or any other nation, as long as they make their percentage off these bad deals.

This time, let’s consider an alternative. Instead of CAFTA, how about a new law that places a 160% tariff against CAFTA nation imports unless they remove their tariff against our farmers? If it ends trade with CAFTA nations, they are hurt more than us. We have big trade deficits with CAFTA countries that would be eliminated in the process.

If Brazil can’t live with our cotton program, then we shouldn’t live with Brazilian imports. That will free up another $7.2 billion in trade deficit we ran up last year.

Fear of trade wars? There is obviously no fear among our competitors, as they threaten industry-after-industry here in the U.S with impunity.

Fear of alienating these Central American countries? We can’t do much worse than at present. Here’s how often they voted against our positions at the United Nation’s last year: Honduras, 76%; Guatemala, 76%; Nicaragua, 74%; El Salvador, 76%; Panama, 77%. All while taking millions in American foreign aid, and taxing our goods at 160% while we let them ship here duty-free. A little alienation from this crowd might do us some good.

CAFTA is just one more in an unbroken chain of bad trade deals that sacrifice our industries, markets, and jobs, with a deceitful promise that other industries will prosper as a result. Then we sacrifice those industries in the very next deal.

It’s time for smart and fair U.S. trade policies. A pre-requisite for any such policies is that they benefit the vast majority of Americans, at the unfair expense of no one.

CAFTA fails that test on all counts. And if it passes, just remember – you’re next.

About the author: http://www.house.gov/norwood/.

All this misinformation and fear mongering and they continually miss the point. Our economy is the envy of the world. Our economy grows more in absolute terms than any in the world, even China on the latest data I had access to. Does anyone not understand a nearly $12.0 trillion dollar economy. How many of the other economic powers must you add together to equal the US.? How could this be if the fear mongers are correct? The fact is that throughout the history of mankind the fear mongers have been wrong. According to them the world should have ended many centuries ago!! If these people paid as much attention to the results as they do spewing their baseless nonsense about economic doom they might even make a positive contribution to some of the success of this greatest of countries. Results, the rest is all useless rhetoric.
 

agman

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Mike said:
Are increasing trade deficits a good thing? Is there an upside?

Trade deficits have not harmed our economy. Fact, employment growth and economic growth have been above years of no deficits. You can check the historical data yourself-I have.

For starters Mike, one must consider how trade is accounted for. We are increasingly becoming a service economy. Are services counted??? How are billion dollar consulting agreements accounted for-they are not counted.

Some Federal Reserves Board members have recently changed their thinking and understanding that trade deficits can be as much a result of superior economic growth, income growth and resultant spending as inefficiencies or a non-competitive workforce. You can judge which applies to the U.S. Too much savings in some countries has led to export surpluses but stagnant economic growth. You only need to look at Europe. Which would you prefer, our economic growth, employment and income growth or theirs? For that matter Japan is just emerging from 15 years of negative, stagnant or minimal growth while posting a trade surplus with the U.S. Are you eager to swap economies?

China is an emerging economy with low unit labor costs. As such, they set the bar for labor intensive production. We are at the middle of the spectrum with Europe at the extreme opposite end. While it is the "in thing" to chastise China for their trade surplus take the time to look at their imports. Have they declined or increased rapidly? You will surprise yourself to find the truth. Some economists believe we could run a significant trade surplus with China within a decade as their standard of living increases. Would that not be a turnaround.

Rather than provide a dissertation on trade balances just ask yourself a simple question. Since there are few periods in the last fifty years when we were not in a trade or fiscal deficit, many times both simultaneously, why does our economy outperform everyone in the world. If you are honest with yourself you will derive at the correct answer. That is what you should be researching to gain a better understanding of the RESULT-an economy that is the envy of the world. What is it that the naysayers keep missing?

You guys can have at it. I hope you view my comments as informative as opposed to confrontational. I will not respond further regarding this issue. I have much better things to do than answer to accusations, falsehoods and pardon me, half-assed and baseless research per the initial article in this forum. Have a great day and a new learning experience.
 

Faster horses

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AGMAN, I for one would like to say thank you for your efforts to educate us in things we don't have easy access to or information on.

Your response here gets to the heart of the matter: we have an economy that is the envy of the world.

What in the world is negative about that? Why does the news media keep portraying a downward slant on everything that is paraded before us?

I am sick of it.
 

mrj

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Faster horses said:
AGMAN, I for one would like to say thank you for your efforts to educate us in things we don't have easy access to or information on.

Your response here gets to the heart of the matter: we have an economy that is the envy of the world.

What in the world is negative about that? Why does the news media keep portraying a downward slant on everything that is paraded before us?

I am sick of it.

FH, I add my voice to yours. Thank you, Agman!

Also, it seems very clear to me that all too much media emphasis is to promote anything that might embarrass or harm the President and slow or stop anything the Republicans are trying to do in Congress as well as to spin everything else to promote those goals.

Yeah, Yeah, I know! This is not the Political place, but it fit here. I don't make a habit of posting in the wrong heading, so please forgive this time.

MRJ
 

Mike

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Agman, while I appreciate the "patriotic pep rally" you so well included,you have yet to dispute any facts placed in the "article" that you so pompously denigrated.

Actually, it isn't an article, it is an opinion by a conservative Republican member of the U.S. House of Representatives who is a champion of small business and has sponsored many bills we, as conservatives, have agreed with.

FH and MRJ, this not more negative spewing by the "Media". See above.

I threw this to the forum for "Another Perspective" only. Never hurts to look at look at the other angles of an argument.
 

agman

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Mike said:
Agman, while I appreciate the "patriotic pep rally" you so well included,you have yet to dispute any facts placed in the "article" that you so pompously denigrated.

Actually, it isn't an article, it is an opinion by a conservative Republican member of the U.S. House of Representatives who is a champion of small business and has sponsored many bills we, as conservatives, have agreed with.

FH and MRJ, this not more negative spewing by the "Media". See above.

I threw this to the forum for "Another Perspective" only. Never hurts to look at look at the other angles of an argument.

It is not a patriotic pep rally, the facts clearly suggest otherwise. You can refute the results which I mention if you choose to do so. Good luck trying. Are you suggesting just because it is a Republican he is not in error with many of his statements?
 

mrj

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Mike said:
Agman, while I appreciate the "patriotic pep rally" you so well included,you have yet to dispute any facts placed in the "article" that you so pompously denigrated.

Actually, it isn't an article, it is an opinion by a conservative Republican member of the U.S. House of Representatives who is a champion of small business and has sponsored many bills we, as conservatives, have agreed with.

FH and MRJ, this not more negative spewing by the "Media". See above.

I threw this to the forum for "Another Perspective" only. Never hurts to look at look at the other angles of an argument.

Mike, in reality, I did not state that this particular article was what I was referencing re. media bias. However, wasn't this piece carried in newspapers? Other media sources? Didn't it support quite well any with a bias against President Bush and his agenda?

It certainly is an "opinion piece" and many of those opinions stray pretty far from fact. There are probably as many experts and officials who can see benefits from NAFTA as there are who make claims such as this guy did. I have heard at least one ag reporter who believes that, according to the numbers he has seen, about half the farmers in the USA would be out of business if we had not had NAFTA. And yes, that is opinion, however he quoted many figures to support it.

I thought Agman did a pretty good job in his post at 2:35, of pointing out inconsistencies between the congressmans assertions and reality.

Other perspectives are fine. It's when the get into erroneous perceptions passed off as fact that they trouble me.

MRJ
 

Mike

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Trade Deficits - One of the primary reasons that Cafta proponents are touting the treaty.

My point: If trade deficits are not a negative to the stability of the U.S. economy, (as agman says) why are these proponents pushing for the "lowering" of trade deficits (to boost the economy) as a reason for Cafta's necessity????????????????????

MRJ, I did not find the aforementioned "article" in the media. I found it on Rep. Norwoods website while going to several other lawmakers websites for opinions on the treaty. I have no idea where else it may have been published.

"I have heard at least one ag reporter" say lots of things too. Erroneously.
 

mrj

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Mike said:
Trade Deficits - One of the primary reasons that Cafta proponents are touting the treaty.

My point: If trade deficits are not a negative to the stability of the U.S. economy, (as agman says) why are these proponents pushing for the "lowering" of trade deficits (to boost the economy) as a reason for Cafta's necessity????????????????????

MRJ, I did not find the aforementioned "article" in the media. I found it on Rep. Norwoods website while going to several other lawmakers websites for opinions on the treaty. I have no idea where else it may have been publish

**********************************************
"I have heard at least one ag reporter" say lots of things too. Erroneously.

I have too, but also have heard some who were right on target, as I believe the one I quoted was!

MRJ
 

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