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Is CAFTA a good thing?
Yes, it is a good thing 2 (22.2%)
No, it is a bad thing 6 (66.7%)
Other, I am being difficult 1 (11.1%)
Total Votes: 9
Is CAFTA a good thing?
Topic Started: Jul 28 2005, 07:34 AM (487 Views)
gvok
Unregistered

source

Quote:
 
July 28, 2005
House Approves Free Trade Pact
By EDMUND L. ANDREWS
WASHINGTON, Thursday, July 28 - The House of Representatives narrowly approved the Central American Free Trade Agreement early Thursday, allowing President Bush to put his signature to the nation's biggest reduction of trade barriers in more than 10 years.

After one of the hardest-fought legislative battles of the year, Republican leaders were able to cut enough political deals to overcome fears among many of their own members about foreign competition and push ahead despite opposition from most Democrats, labor unions and the sugar industry's powerful lobby.

The vote, 217 to 215, came almost a month after the Senate approved the trade pact and gave Mr. Bush a crucial victory that had seemed in doubt a few days ago. As recently as Tuesday, fewer than half of Republican lawmakers had publicly endorsed the pact and almost all Democrats were planning to vote against it.

But the end result did not come without some drama. The voting took almost an hour as Republicans pressured about 8 to 10 members. The count seemed to stall after about 30 minutes with the tally at 214 in favor and 211 against, and a handful of votes outstanding.

For the next half-hour, Republicans, mostly from textile states, jockeyed over who would be allowed to vote against the bill and save face back home. The final count came minutes after midnight.

Within minutes after the vote, the White House released a statement from Mr. Bush praising the action. "By lowering trade barriers to American goods in Central American markets to a level now enjoyed by their goods in the U.S.," he said in the statement, "this agreement will level the playing field and help American workers, farmers and small businesses."

Rob Portman, the United States trade representative, also congratulated Congress. "I pledge to do all I can," he said, "to continue our efforts to listen and address members' concerns on trade."

Passage of the bill came only after intense pressure from Mr. Bush, who made a last-minute trip to the Capitol on Wednesday morning, and after deals with reluctant lawmakers from textile-producing states, sugar-growing areas and industrial states like Illinois, Ohio and Pennsylvania.

The pact would eliminate most barriers to trade and investment between the United States, the Dominican Republic and the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Brimming with confidence, House Republican leaders declared that the pact would benefit the United States as well as the impoverished countries of Central America.

"Tonight, we have the opportunity to be the progressive, aggressive good-neighbor party," said Representative Bill Thomas, Republican of California and chairman of the House Ways and Means Committee. "We will not be the ones who say for 40 years that we want to help and then heel to the protectionist movement."

The immediate economic impact is likely to be small, at least for the United States, because the combined economies of the six countries are equivalent to about 1 percent of the United States economy or an economy about the size of Tampa, Fla., and its surrounding suburbs.

But the political impact is likely to loom much larger. To supporters and opponents alike, the pact became a political symbol over how best to respond to globalization, competition from low-wage countries and the loss of manufacturing jobs in the United States.

The treaty has also been the focus of a power struggle between Mr. Bush, who championed it as a model for expanding free trade, and Democratic lawmakers who argued that it would encourage American companies to shift jobs out of this country while doing little to elevate the working standards of Central Americans.

All but a handful of Democrats, including many who voted in 1994 for the North American Free Trade Agreement, which covered the far bigger trading partners of Mexico and Canada, voted against the Central American agreement even though many issues are the same.

Democrats charged that Mr. Bush has missed an opportunity to elevate labor practices in Central American nations, predicting that the pact would encourage American companies to shift jobs out of the United States without prodding Central American countries to offer livable wages and basic protections for workers.

"As our manufacturing base erodes, as our industrial base erodes, we have a president who is contributing to the further erosion of that base," said Representative Nancy Pelosi of California, the House Democratic leader.

In a crucial breakthrough, White House officials and Republican leaders were able to win support from about half of the Republican lawmakers from textile-producing states like Alabama, Georgia, North Carolina and South Carolina.

The trade deal has been unpopular in textile states, which have lost nearly 200,000 jobs in the industry in the last decade. But late last week, the administration announced that the Central American countries had agreed to several new restrictions that would benefit mills that export yarn and certain types of fabric.

One important concession, for instance, calls for the Central American countries to use American-made pockets and linings in pants they export to the United States.

Representative Gresham Barrett, Republican of South Carolina, was one of five Republicans who abandoned his opposition to the pact this week. On Wednesday, Mr. Barrett said that he was persuaded that with the new restrictions, the trade pact would prevent job loss to China.

But some textile industry groups, particularly those that represent producers of finished products rather than yarn or fabric, were furious and vowed to punish those who had changed their views.

Mr. Barrett said he was sanguine about the criticism. "Some of it bothers you," he said, "but I think in the long run a good Cafta agreement will help us keep jobs in South Carolina."

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Wichita
Member Avatar
The Adminstrator wRench
:shrug:

I honestly don't know.

I do know that 1 in 6 American jobs are currently dependent on trade. It's not something that we can ignore.

Also, plans were (and are still probably) being made to have a free enterprise zone throughout South America. Central America would inevitably go one way or another. It will be interesting to see where this goes.

Finally, so many of the companies that went overseas during the late 1990's have since made additional moves. Mexico (I know - it's not Central American. I'm using it as an example.) was quite happy to get the plants from the US and their citizens the work even at the lower wages.

Now, however, some of those same plants have moved on to China or Vietnam at even lower wages. Some of those countries who initially benefitted from jobs going overseas are now dealing with jobs going overseas. Their viewpoint may be a tad different on the subject.
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gvok
Unregistered

I don't know either. Are wages raising in China and India? Are there other countries with even lower wages? At some point will wages level out on a global scale? How long will that take?
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Dr. Noah
Sistertrek's Asian Correspondant
Without equivalent labor and environmental standards, several industries will leave the United States and take thousands of jobs with them in order to pay workers far less and not have to adhere to labor and environmental regulations we have put into place to protect ourselves in the U.S.
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psyfi
psyfi
Dr. Noah
Jul 28 2005, 09:13 AM
Without equivalent labor and environmental standards, several industries will leave the United States and take thousands of jobs with them in order to pay workers far less and not have to adhere to labor and environmental regulations we have put into place to protect ourselves in the U.S.

My goodness. I agree! I don't know what all of this global free trade is about other than to make the rich a whole lot richer.
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24thcenstfan
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Something Wicked This Fae Comes
I voted 'No' for similar reasons that Dr. Noah so eloquently states.
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Admiralbill_gomec
UberAdmiral
psyfi
Jul 28 2005, 08:55 PM
Dr. Noah
Jul 28 2005, 09:13 AM
Without equivalent labor and environmental standards, several industries will leave the United States and take thousands of jobs with them in order to pay workers far less and not have to adhere to labor and environmental regulations we have put into place to protect ourselves in the U.S.

My goodness. I agree! I don't know what all of this global free trade is about other than to make the rich a whole lot richer.

Funny, though... I'm okay with that :D
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Hoss
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Don't make me use my bare hands on you.
Some say there is a greater cost in jobs to the US economy of not allowing free trade and protecting industries against outsourcing.

If there is a product (product X) that can be produced by unskilled labor. And this product is necessary and desired by a lot of other companies that make other things. Then we force the companies to pay 3 times more for product X than they would if it was made in China so that we can protect a few thousand low paying unskilled jobs in the US. These companies can't produce as much of its revenue generating product as they could for the same amount money. These companies, therefore, have to sell their product at higher prices meaning fewer sales and difficulty competing in foreign markets, meaning fewer jobs. Also, meaning consumers get less for thier dollars. All to save a few thousand low paying unskilled jobs.

And then there is the cost of having expensive, yet very productive US workers doing something that could be done elsewhere for cheaper when the US workers could be doing something else more productive.

Out-sourcing has not hurt the US economy or job market, it has helped. So, we buy cheap, incredibly low-margin stuff from China, who does that help? Us, that's who. Who has a better economy, better employment, better standards of living, much, much, much higher GDP per capita, etc. etc. etc.? Us that's who. Allowing companies to be competitive and cut costs and grow, is what will provide job growth for the US, not backwards protectionism.
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gvok
Unregistered

Admiralbill_gomec
Jul 29 2005, 08:31 AM
psyfi
Jul 28 2005, 08:55 PM
Dr. Noah
Jul 28 2005, 09:13 AM
Without equivalent labor and environmental standards, several industries will leave the United States and take thousands of jobs with them in order to pay workers far less and not have to adhere to labor and environmental regulations we have put into place to protect ourselves in the U.S.

My goodness. I agree! I don't know what all of this global free trade is about other than to make the rich a whole lot richer.

Funny, though... I'm okay with that :D

Do you think that it's good for a society to have a wide disparity between rich and poor?
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psyfi
psyfi
38957
Jul 29 2005, 08:38 AM
Some say there is a greater cost in jobs to the US economy of not allowing free trade and protecting industries against outsourcing.

If there is a product (product X) that can be produced by unskilled labor. And this product is necessary and desired by a lot of other companies that make other things. Then we force the companies to pay 3 times more for product X than they would if it was made in China so that we can protect a few thousand low paying unskilled jobs in the US. These companies can't produce as much of its revenue generating product as they could for the same amount money. These companies, therefore, have to sell their product at higher prices meaning fewer sales and difficulty competing in foreign markets, meaning fewer jobs. Also, meaning consumers get less for thier dollars. All to save a few thousand low paying unskilled jobs.

And then there is the cost of having expensive, yet very productive US workers doing something that could be done elsewhere for cheaper when the US workers could be doing something else more productive.

Out-sourcing has not hurt the US economy or job market, it has helped. So, we buy cheap, incredibly low-margin stuff from China, who does that help? Us, that's who. Who has a better economy, better employment, better standards of living, much, much, much higher GDP per capita, etc. etc. etc.? Us that's who. Allowing companies to be competitive and cut costs and grow, is what will provide job growth for the US, not backwards protectionism.

Regarding outsourcing, I don't know a lot about it except from the standpoint of the consumer. I wonder how much it costs companies in terms of my having to talk to folks who don't speak English, forcing me to call again, forcing me to make mistakes in terms of the product, and so forth. In fact, if I have to go through that, I doubt I will EVER buy the product again or anything else from that company. Also, I think that more than a few thousand unskilled jobs are lost. I think that many hard working but low-wage earner families are seriously hurt by companies relocating to other countries. I also believe that in many companies, they buy that part they need for two cents and CONTINUE to sell it to American consumers at the same high price.
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Hoss
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Don't make me use my bare hands on you.
To answer a question that was not directed at me, I think that it is ok and beneficial to have income and wealth disparity.

To address Psyfi, on the foriegn language tech/sales support. There have been companies run up against this issue with their customers. Dell last year, relocated a lot of thier tech support back to the USA as their customers where complaining about not being able to understand the accented Indians. Dell's customer service score plummeted and they responded. The free market works.

Alot of companies are outsourcing to India because of labor shortages in the US. We're at 5% unemployment, many economist call this 'natural unemployment', as it is the equivolent of the average worker being out-of-work for 6 months over a 10 year period. India has people who can speak English and who are reasonable well educated in technical skills and a huge labor surplus.

Do companies migrate a product to China to cut costs and increase profits? Yes, all the time. And much of the increased profits are invested in the development of new products to grow the company. The Chinese worker makes beans, the Chinese contract manufacturer makes almost no margin, the US company makes more profit and grows and hire more people. The US labor market is dynamic and always has been. Workers must adapt. We can't afford to have US workers making plastic toys and textiles, or even doing repetive hand assembly of products.

And if you don't think that prices come down, go shopping for VCRs, TVs, computers and tell me how much they were 15 years ago compared to today. Then convert that to relative dollars. It is astounding!
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gvok
Unregistered

38957
Jul 29 2005, 09:11 AM
To answer a question that was not directed at me, I think that it is ok and beneficial to have income and wealth disparity.


The question is about wide disparity, not just any disparity. Many countries have experienced social upheaval because the gap between rich and poor was too vast (France and Russia for example).
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Hoss
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Don't make me use my bare hands on you.
gvok
Jul 29 2005, 08:23 AM
38957
Jul 29 2005, 09:11 AM
To answer a question that was not directed at me, I think that it is ok and beneficial to have income and wealth disparity.


The question is about wide disparity, not just any disparity. Many countries have experienced social upheaval because the gap between rich and poor was too vast (France and Russia for example).

But that was disparity enforced by a strict political system that created and protected an elite. (I am assuming that you are referring to the French revolution and the fall of communism in the USSR). What we have in a capitalist society is the opportunity of upward (and downward) mobility based on ones hard work, ambition and creativity. Most millionaires in the USA are first generation (self-made). Nobody is forcing anybody to stay in some caste or some roll in society. There are peasants or serfs in the US. No collective factories and farms.

Bill Gates, the richest man on earth, was poorer than me and working out of his garage 30 years ago. Now, he is as wealthy as he can be, but he also not only employs thousands, but produces products that have improved efficiency (whether us geeks want to admit it or not) for other businesses and been a key part of the computer revolution. He has benefitted society and been handsomely rewarded for it. If Vista flops and he doesn't keep up with his competitors (both domestic and abroad) he could lose a great deal of his wealth.
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gvok
Unregistered

Regardless of what the system is, a society becomes unstable when there is a wide disparity between rich and poor and especially when the middle class is small or non existant. It is in the wealthiest people's interest to grow the middle class for this reason.
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ImpulseEngine
Admiral
I voted NO.

How about that Bush. After coming into office and losing millions of US jobs, he's finally creating some jobs - in Central America. :rolleyes:
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