mj...FACT: per capita income in Costa Rica is $9100.00 annually. In Mexico it is $9,000.00 annually. Sure is a far cry from "one or two dollars a day" that JS says is all those people earn.
"What does Mexico have to do with CAFTA mj?"
MRJ: Not a thing. I thought it interesting because it is far above what most people seem to believe it is. Wonder why that is?
"Lou Dobbs....The White House, however, couldn't find the votes for this so-called free trade agreement before his re-election in the fall, and the president likely doesn't have the votes for it now. And that's a good thing for American workers."
MRJ: Maybe, maybe not, we will see.
"CAFTA advocates say the agreement would open up free trade between the United States and the Dominican Republic and five countries in Central America: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua."
"But this agreement represents the same free trade at all costs policy that has led to a 70 percent increase in the trade deficit since 2001. We're not signing trade agreements to open new markets for our exports. Instead we're continuing to enter into outsourcing agreements with countries that cannot possibly buy our goods."
MRJ: Do you really believe the advocates of Free Trade are that stupid, as to try to sell goods to people who can't buy them?
MRJ: There are some people who believe we should be allowed to purchase goods and products from overseas and that such commerce is good for our country, considering the GNP and other signals number crunchers base predictions upon. Low income, low educational and training required for many of the jobs outsourced are one of the reasons. Our workers have opportunities to get more education and training for the higher paying jobs. There are even some government programs helping them, according to stories in the newspapers. The trade obviously isn't all going into "evil corporate pockets" since the people in those nations are getting increasing incomes. Look at China, for example. Not many years ago, there was no market there for consumer goods for the common people. Now there is.
"If you add up the gross domestic products of the six CAFTA economies, the total market comes to about $85 billion, according to the latest available figures. That's only slightly larger than the economy of New Haven, Connecticut and less than a fifth of the size of New York City. As such, expanding trade with this bloc cannot possibly be a serious growth driver for the $11 trillion U.S. economy."
MRJ: Doesn't it seem reasonable to set up agreements with them to cut tariffs on products we want to sell to them now, rather than when they grow their economy and negotiate from a stronger position?
"The CAFTA trading partners are simply too poor and too small to serve as major consumer markets for anything made in America, if indeed we still are manufacturing anything in this country. But with 40 percent of workers in Central America earning less than $2 a day, CAFTA will pit the working poor of these countries against American workers, especially textile workers and small farmers. U.S. multinationals don't exactly have a great track record when it comes to keeping jobs at home in the face of cheaper labor overseas."
MRJ: That means that 60% of the workers earn more than $2.00 per day, doesn't it? And their incomes likely will increase as their country trades more.
"More than 35 percent of all U.S. goods exports to the six CAFTA countries consist of turnaround exports, which are unfinished textile, apparel and other materials that are not ultimately consumed in these countries. These "round-trip" imports are assembled by low-wage workers and exported right back to the American marketplace."
MRJ: those low-wage workers are being paid more now, and their incomes most likely will grow. They produce products that our low-income workers couldn't afford if they were produced by our higher paid workers. It looks like all will ultimately benefit by increasing living standards.
"As a result, U.S. exports to CAFTA countries generally produce greater imports to our market, which further swells the worsening record trade deficit. In fact, turnaround exports have contributed to the U.S. trade deficit with the six CAFTA nations rising by nearly 60 percent from 1997-2004, according to the U.S. Business & Industry Council."
MRJ: the next time I see a news story on the benefits to our nation and others of our so called "trade deficit", I will post it for you. Because there are disagreements between economists, national leaders and others over this issue does not make either side correct, yet those who are using the issue to trash this administration are liberals and I do not believe they were so great for the nation when they ran things.
"And at least three of the six CAFTA countries are in such a weak financial position they couldn't possibly boost imports. The Dominican Republic is currently receiving a $665 million standby loan from the International Monetary Fund to help the country emerge from its economic crisis of 2003. The program is set to last until mid-2007, and the country will be under pressure to increase exports and curb imports. Unless, of course, those imports are turnaround imports that are shipped right back into the U.S. market."
MRJ: are you totally disregarding the fact that some of those poorest nations do have some tourist business, and that they need quality beef to serve those tourists, making some money for themselves as well as increasing our beef trade?
"Honduras and Nicaragua are also receiving special debt relief from the IMF because of their great indebtedness and high poverty rates. While they're not austerity programs like the Dominican Republic's, neither country has much capacity to sharply increase net imports."
MRJ: same as the above paragraph!
"Americans know a bad trade deal when they see one," says Ernest Baynard, executive director of Americans for Fair Trade. "They've already had to live through one for 10 years under NAFTA."
MRJ: don't know what sort of record for accuracy or what philosophy of business and trade Baynard espouses, but there are those at least equally respectable who are in total disagreement and who realize that NAFTA actually has been a boon to US farmers.
"U.S. workers have lost nearly 900,000 jobs as a result of the North American Free Trade Agreement, most of them in the higher-paying manufacturing sector, according to the Economic Policy Institute."
MRJ: surely we all know that those "jobs lost" numbers are very subject to political tweaking depending upon the philosophy of the organization using them. Is the EPI usually supportive of liberal or conservative policies? One needs that information to evaluate the spin.
"But NAFTA's effects are even more evident in our exploding trade deficit. Exports to Canada and Mexico have more than doubled since 1993, but imports to our neighboring countries have risen by 173 percent, from $151 billion to $412 billion. As a result, the trade deficit with Canada and Mexico has ballooned from $9.1 billion in 1993 to $110.8 billion last year."
MRJ: let's make sure we understand this. You said our exports to Canada and Mexico have gone up by 200% while our imports from them have increased only 174%.......and that is bad?????
"CAFTA may bring lower prices to consumers, but it would most likely lead to more jobs being shipped to cheap foreign labor markets. And a new poll on CAFTA shows American consumers do not want to give up their jobs for lower prices, according to the nonprofit organization Americans for Fair Trade. In fact, 74 percent of those polled said they would oppose CAFTA if it reduces consumer prices but eliminates jobs for American workers."
MRJ: There are others with opposing opinions. And there are other polls. Those opinions and polls may be interesting, but they, again, reflect the philosophy of the organization. What bearing does whether or not it is a non-profit have?
"The only people who stand to gain from CAFTA," Baynard adds, "are people who are offshoring jobs already or want to offshore jobs."
That is something we simply cannot afford. Working Americans know all too well the high cost of free trade. I can only hope Congress has learned that lesson as well.