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NAFTA and other FTA revisited

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King Kang of Mu View Drop Down
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    Posted: 02 Mar 2011 at 14:45
another thread out of pure ignorance and curiosity from me.    actually I had few questions coming off of that other Are Unions Relevant? thread (http://www.allempires.net/forum/are-unions-relevant_topic126348_post52443.html#52443 )
 
Originally posted by Captain Vancouver Captain Vancouver wrote:

Originally posted by Panther Panther wrote:

Originally posted by Seko Seko wrote:



You mean newly elected Mayors and such? Yes. Dems across the board as a whole? Mostly yes to that too. Yes to what? To being fiscally responsible. Everyone has to manage a budget. States, Counties and Cities. That means tightening belts. The democrats have a history of doing that you know. We don't need to look that far back either. His name was Bill Clinton. Took us out of the red and into the black.


Well it is comforting reading that we agree on the desire for fiscal responsibility, the only thing is how best to achieve it with as little partisanship as possible?

The Democrats have a history alright. but i'd rather not get into that here? This paragraph was going to be longer, but i now realize that it would not be in the spirit of this thread. Suffice it to say, i care not in discussing either parties political history, as i currently see political history as being easily hijacked by the most cynically unscrupulous politicians with the most imagination at playing up the cult of personality, of that which my concerns are, that it is coming too grossly dominate this country we citizens of it love!


Quote
Regarding Madison, it is painfully obvious who is attempting to eliminate what my dear friend. We can not spin this any other political way other than a Republican attack on the Democratic base.


I understand this as being conflicting points of view my friend. But is Governor Walker correct in stating that Wisconsin is in the red... flat out broke? Apparently some see this as Republican retribution, while others see this as him doing the job he promised he would do if he was elected.

Quote
As for the South...last I heard you Texans were in debt to the tune of 15 Billion dollars. How are you all going to climb out of that one? And you don't have too many unions to blame either.


Heh... i left myself wide open for that one. I should have known better.

Besides Republicans and Democrats trying to score points with the public by bludgeoning each other over whose to blame for what ever problem, real or imagined, being in debt is also the "in" thing to be. The new cool, so it seems?  Nothing says "gangsta" like a politician with the pockets of their pants pulled out.

 
 

It seems to me the issue in Wisconsin is a political and ideological one, rather than an economic one. Unions there have already conceded the necessity of making financial concessions. The contentious part is, I believe, the attempt to remove bargaining rights from unions, now and into the future. This is actually a fundamental right in a democratic society, and one that was hard won, over many years of struggle. Walker’s claim that bargaining rights must be removed presupposes the stance of future negotiations. Who knows? In the future, public service unions in the state may come up with their own innovative suggestions for dealing with budget problems. It wouldn’t be the first time.

 

If there were doubts about Walker’s intentions, his telephone conversation with the ersatz “Koch brothers” should have shed some light on his true persona. In a reasonable society, this should have been reason enough for disgrace and resignation.

 

In fact the political right has often tried to raise the image of the ideal political leader being merely a manager, a fiscally responsible accountant who knows business, and the workings of the market, and rejects philosophical namby-pamby, as being the ideal leader. But when we look at the major social issues confronting the world today, we see, in my opinion, that management skills are only of limited value. Human society is not a business. All budgetary issues are subjective. Today for example, the US defense budget is sacrosanct. Any meaningful suggestions of cuts would bring out angry mobs with burning torches. But was not always so. And almost certainly will not be so in the future. Today Wisconsin is considered by some to be “broke”. But it is not- there is considerable wealth in the state, by world standards, even by western standards. The overriding question is how this money will be allocated, and how it will be spent. Not too surprisingly, those on the far right have some ideas about this, and they are ones that are not in the best interest of the country, or of average working Americans.

 
 
 
There was a question raised that whether union busting is Republican right wing agenda/policy or not.   being a far left on this issue I think both are right.  Yes, in overall there is more of Republican right wing agenda, especially this year coming off of Tea Party election.  But I would also agree that there is a systemic break down of unions supported by both parties.  And that is because both party represents corporate interests, just different section of them and to different degrees.  So I was gonna bring up NAFTA as a Democrat's effort to break down unions and serve the corporate interests, but then I thought perhaps NAFTA deserves it's own thread.  So what do you guys think of NAFTA looking back in relations to U.S. economic decline, unemployment and unions?  And we can talk about other FTA deals in past 2~3 decades and their effects on both parties too.  This thread will also go along nice too. ->  http://www.allempires.net/forum/why-the-us-declines-solutions_topic126336_page4.html
 
 
 
 
I'm gonna actually start out the NAFTA talk by revisiting  the infamous Gore vs Perot on 1993 Larry King Live NAFTA debate.  even just for fun....Big smile   
 
 
NAFTA: Ross Perot and Al Gore Debate 1993
 
 
 
and an wiki article
 
 
 
and a couple of cool chart that could be used for all three threads actually.....
 
chart showing union density by year, 1880-2000
 Union density
 

Do you approve or disapprove of unions? chart showing Gallup results


Edited by King Kang of Mu - 02 Mar 2011 at 14:54
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 02 Mar 2011 at 21:13
Originally posted by King Kang of Mu King Kang of Mu wrote:

There was a question raised that whether union busting is Republican right wing agenda/policy or not.   being a far left on this issue I think both are right.  Yes, in overall there is more of Republican right wing agenda, especially this year coming off of Tea Party election.  But I would also agree that there is a systemic break down of unions supported by both parties.  And that is because both party represents corporate interests, just different section of them and to different degrees.  So I was gonna bring up NAFTA as a Democrat's effort to break down unions and serve the corporate interests, but then I thought perhaps NAFTA deserves it's own thread.  So what do you guys think of NAFTA looking back in relations to U.S. economic decline, unemployment and unions?  And we can talk about other FTA deals in past 2~3 decades and their effects on both parties too.  This thread will also go along nice too. ->  http://www.allempires.net/forum/why-the-us-declines-solutions_topic126336_page4.html
 
I'm gonna actually start out the NAFTA talk by revisiting  the infamous Gore vs Perot on 1993 Larry King Live NAFTA debate.  even just for fun....Big smile   
 
 
NAFTA: Ross Perot and Al Gore Debate 1993
 
 
 
and an wiki article
The success of a measure can only be measured by the goal it was set to achieve. Since the goal of NAFTA, whatever, the hype surrounding it, was to increase the profitability of US corporatios, it has beem fairly successful . It almost certainly has contributed its share to the decline of US employment and the decrease to net return to labour, but that had been going on for a long time before NAFTA was signed. And there's no free trade agreement with China, which has had a much bigger impact in that area.
Quote
and a couple of cool chart that could be used for all three threads actually.....
<snip> 
Quote
The article covers much of the ground, but it omits the role played by the popular media in fostering anti-union feelings with propaganda. The same phenomenon does exist in Europe, or at least parts of it, especially the UK, but to nowhere near the same extent, and is restricted there to the print media, which aren't such a powerful influence.
 
With regard to the offically low trades union membership in France, it should be remembered that France has very strict rules about the election of comités d'entreprise by the workers in each company to represent them, and their right to consultation, negotiation and agreement. Typically members of the committee cannot be fired or made redundant without severe financial payment. Representation through outside unions is therefore not so important. Nearly two-thirds of employees took part in committee elections in 2005/6.
(Similar situations occur also in other European countries.)
 
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I agree with Graham about NAFTA being a primarily an economic dominance tool to help US corporations first and foremost and had little to do with unionism to begin with since their decline began long before.
 
Now as to the article I am afraid to say that it is full of BS. The US government declared war on organised labour from the very beginning and the US media (newspapers primarily the Hearst group) helped it by spreading red scare well before there was a USSR. FDR relaxed some of the anti-union laws only because he wanted their votes which they gave to him and his party happily. This was why union support/membership surged.
 
Now why has it declined sharply after 2001? Remember 9/11? The airline industry was by that time the last highly unionised setion in private sector in the US. 9/11 decimated the airline industry causing massive losses due to higher oil prices, higher insurance premiums (which keep on going up) and reduced travel. Back then a standoff between unions and the airlines took headlines and to the last one the US media sided with the airlines despite the fact that those unions gave unimaginable concessions and pay cutts:
 
 
This media war badly affected the unions and influenced public opinion as well.
 
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First of all, thank you, very much for great initial response, both gcle2003 and Al Jassas.  Both of your post were very helpful.  Again, I was ill prepared on the topic and started out with just local sentiment(U.S. Midwest) than anything else.  thank you for steering this thread to right direction from the beginning. Sorry it took a while to digest what you guy wrote and write my response. 
 
Originally posted by gcle2003 gcle2003 wrote:

 And there's no free trade agreement with China, which has had a much bigger impact in that area.
 
Very good point.  I can't argue much there.  Not as a rebuttal, but to give some tangible numbers and more cool charts to look at.....Wink
 
from this article
 
 
Asian trade with the United States
 
U.S. Census Bureau number for trade with China 2010.
Trade in Goods (Imports, Exports and Trade Balance) with NAFTA with Mexico (Consump)
 
 
 
 
It seems to me at least I can't hardly blame NAFTA for U.S. trade deficits when Canada and Mexico import U.S. products more than anyone else.  And looking at the just numbers alone, NAFTA is about U.S./Canada trade just as much as U.S./Mexico trade if not more which was bit of surprise for me.  Here in Midwest, we tend to think about outsourcing jobs and unemployment before anything else understandably.  So I appreciate starting out with bigger picture. 
 
I do have one Midwestern question though.  Back to jobs and exports, as comical as Gore vs Perot debate was(though, best thing Larry King ever did....Big smile), in this part of the interview (http://www.youtube.com/watch?v=K1tHV_fztR4&feature=related), about a minute and half into that, Perot starts to doubt those export numbers.  His reasoning was if U.S. send down $100 products down to Mexico $10 additional works done to them often in a factory owned by same U.S. companies and send them back up here for $110 finished product, that is not honest $100 export and $110 import, rather just $10 import and $100 worth of interdepartmental transfer within a company regardless of border.  well I added few words myself but.....  And Gore's rebuttal to that was first he admits there are very small portion of that is true, then he moved on to the total export numbers again then name dropping all the people who support his position which has nothing to with internal logic of the argument. 
 
Gore does say 80~90% U.s. exports to Mexico are not the case that Perot is talking about.  I guess I don't really buy that number.   perhaps it might have been true back in 1993, but it certainly doesn't seem like that from Midwest, 2011.    So can anyone comment on how much of Perot type of export(to be just imported back after added values) are part of NAFTA trade numbers between 3 nations.   And even if Perot's accusation is true, is that necessarily bad or harmful other than tweaking numbers to make it look good? 
 
 
here is a couple of anti-NAFTA charts....Tongue
 
 


Edited by King Kang of Mu - 03 Mar 2011 at 21:28
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 03 Mar 2011 at 21:40

For comparison it would be necessary to have similar information about job losses by America due to offsourcing to other areas. The really illuminating table there is of the US trade balances with the rest of the world. Once upon a time its trade balances were virtually all favourable: now its trade balances with all of the 15 countries listed (except the Netherlands and Simgapore, oddly enough) are all unfavourable.

You cannot blame that on the NAFTA treaty.

Perot was right about the $110-$100 business. It actually represents an import of $10. But if it's supposed to be a post-NAFTA deal, then whether or not it represents an improvement obviously has to depend on what was happening before: if pre-NAFTA the total cost was $150, then someone has benefitted from the change.

It's an interesting case where the consequent reduction in GDP makes people better off.
 
Thanks for the data.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Seko- Quote  Post ReplyReply Direct Link To This Post Posted: 05 Mar 2011 at 05:35
Kang this thread is quite the eye opener, especially that link from the 'economistsview' and 'the economic populist'. I'm enthused in reading it but a bit bummed that our trade has turned on its head. It's what I suspected. Do you have links from last year as well? Also, our trade imbalance is clearly shown with both Canada and Mexico. I don't know why you said, "It seems to me at least I can't hardly blame NAFTA for U.S. trade deficits when Canada and Mexico import U.S. products more than anyone else.".


Edited by Seko - 05 Mar 2011 at 06:07
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There's a little nicety here that is ignored (and a member of the Chinese Politburo would know it), these supposed exports (be it Chinese or Mexican) are already foreign owned. A Ford-F150 assembled in Mexico is no more a "Mexican" product than a BMW assembled in the US is a "domestic" product. Now we all know that the United States pioneered in the maquiladora principle during the 1960s with respect to Mexico; heck it had worked for the Auto Industry vis a vis Canada a decade earlier; hence, to trot out the circular trade here as an imbalance in US industrial exports and imports is little more than an exercise in smoke-and-mirrors with respect to "trade" and Perot was essentially correct. There are far more obvious reasons for the implosion of Detroit and these have nothing to do with NAFTA.
 
Now, there is an interesting factor that none have considered, the absorption of Mexican agricultural production by the United States as a function of NAFTA, which has generated an incessant increase in Mexican "cost-of-living" indices--in itself a factor in Mexican social unrest. Few people realize that the largest grocery emporium in Texas, HEB Stores, is also the dominant presence in Coahuila and Nuevo Leon states in Mexico.


Edited by drgonzaga - 05 Mar 2011 at 21:43
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Post Options Post Options   Thanks (0) Thanks(0)   Quote King Kang of Mu Quote  Post ReplyReply Direct Link To This Post Posted: 05 Mar 2011 at 15:18
Thank you Uncle G, dr. G and Seko.  I can't believe I actually caught something out of 20 year old Larry King clip.....Big smile  Sometimes I feel that you can get to a 'truth' by breaking down the internal logic of the rhetoric around it. 

I was gonna complie some more charts and articles concerning what's been already said and make a post that touches on all your comments in an unified way.....but brain has put tariff on sorting out these information in unified way.  So i will try to comment on all of your comments as much I can for this post.  I might be all over the place so buckle your seat belt......
   


Originally posted by gcle2003 gcle2003 wrote:

For comparison it would be necessary to have similar information about job losses by America due to offsourcing to other areas.

I've been looking for those charts or articles but with no great success.   I doubt I can find something that shows outsourcing of American jobs to all different areas in a single chart or article. My might have to look for them in country by country or industry by industry which might take some time to gather and process.  I think that endeavor might deserve whole another thread by itself and I don't know if i have mental capability or energy to take on that journey at the moment.  

 
EDIT:   but I'll give U.S.- Korea FTA job loss chart as an example, albeit it seems to be from an anti-FTA article and possibly biased politically 
 

100701 EPI

http://www.tradereform.org/tag/free-trade-agreements/

 
 
 
 
Now on the big elephant named China.......
[Table 1] 
(please make sure you read the fine prints on above chart)
 
What caught my eyes in above little chart is that 'U.S. Imports for Consumption - Jobs Displaced' number is slightly higher than 'U.S. Trade Balance - Net Jobs Lost'.  I'm gonna apply very loose colloquial definitions here.  Can I interpret that as more jobs are going to China than all others combined?   and of course there are some jobs coming over from China to U.S.
 
 
 
(below Green letters are excerpts from same article.)

But the jobs impact of the China trade deficit is not restricted to job loss and displacement. Competition with low-wage workers from less-developed countries has also driven down wages for other workers in manufacturing and reduced the wages and bargaining power of similar workers throughout the economy. The impact has affected essentially all production workers with less than a four-year college degree—roughly 70% of the private-sector workforce, or about 100 million workers. For a typical full-time median-wage earner in 2006, these indirect losses totaled approximately $1,400 per worker (Bivens 2008). China is the most important source of downward pressure from trade with less-developed countries, because it pays very low wages and because it was responsible for nearly 40% of U.S. non-oil imports from less-developed countries in 2008.

This study finds the following:

  • The 2.4 million jobs lost/workers displaced nationwide since 2001 are distributed among all 50 states, the District of Columbia, and Puerto Rico, with the biggest losers, in numeric terms: California (370,000 jobs), Texas (193,700), New York (140,500), Illinois (105,500), Florida (101,600), Pennsylvania (95,700), North Carolina (95,100), Ohio (91,800), Georgia (78,100), and Massachusetts (72,800).
  • The hardest-hit states, as a share of total state employment, are New Hampshire (16,300, 2.35%), North Carolina (95,100, 2.30%), Massachusetts (72,800, 2.25%), California (370,000, 2.23%), Oregon (38,600, 2.19%), Minnesota (58,800, 2.17%), Rhode Island (10,600, 2.01%), Alabama (39,300, 1.97%), Idaho (13,500, 1.97%), and South Carolina (38,400, 1.97%).
  • Rapidly growing imports of computer and electronic parts (including computers, parts, semiconductors, and audio-video equipment) accounted for more than 40% of the $186 billion increase in the U.S. trade deficit with China between 2001 and 2008. The $73 billion deficit in advanced technology products with China in 2008 was responsible for 27% of the total U.S.-China trade deficit. The growth of this deficit contributed to the elimination of 627,700 U.S. jobs in computer and electronic products in this period. Other hard-hit industrial sectors include apparel and accessories (150,200 jobs), miscellaneous manufactured goods (136,900), and fabricated metal products (108,700); several service sectors were also hard hit by indirect job losses, including administrative support services (153,300) and professional, scientific, and technical services (139,000).....
 
 
for more overall view on each FTA, I did find this however ->
 
it's Office of the United States Trade Representative official site.  None of it really mentions job losses but it does give you brief overview on each FTA, involving U.S. mostly based on trading and investment numbers as expected.  .  On the left column you can browse through each FTA on the right and the bottom some related articles on the each FTA.  Not exactly what I was looking for but a good place to start if anyone is curious about gov't official view on these on paper. 
 
 
Originally posted by gcle2003 gcle2003 wrote:

The really illuminating table there is of the US trade balances with the rest of the world. Once upon a time its trade balances were virtually all favourable: now its trade balances with all of the 15 countries listed (except the Netherlands and Simgapore, oddly enough) are all unfavourable.

Yes, I do remember growing up in Korea, that ROK trade deficit to U.S. and Japan were huge concerns up until maybe early to mid 80's.  Until that point,  I can simplify Korean export industry as importing lot of crude oil, to produce Nylons in sweatshops, build infrastructure(highway) and some chemical industry.   We were importing most of high tech products from U.S. and Japan.  and when I say high tech,  I mean radio boombox to wrist watch and up.  Yes, Koreans were making those by 70's and by 80's for sure.  But most of Koreans knew that American and Japanese products are  better products.  Not just high techs,  when someone goes out overseas and come back, they brought loads of Marlborough's, Zippos, Vaseline lotion, Ponds cold cream, Levi's, etc for gifts or to sell.  it's not that they didn't those products, because it was American.  Some of it has to do with what they see in Hollywood movies and such, but for practical purposes 'American' meant well designed durable products.  And those sentiments are still there.  Perhaps not so much in places like Korea like it used to be, but many Chinese have same sentiment that Koreans used to toward American products.  Example, I've heard GM is actually doing quite well in China which is much bigger market than Korea will ever be.  Anyway I don't want go off on just U.S.-Korea trade alone in this post, but I'll try to pick it back up later.  
 
 
 
 
 
 
Originally posted by King Kang of Mu King Kang of Mu wrote:

 
It seems to me at least I can't hardly blame NAFTA for U.S. trade deficits when Canada and Mexico import U.S. products more than anyone else.  And looking at the just numbers alone, NAFTA is about U.S./Canada trade just as much as U.S./Mexico trade if not more which was bit of surprise for me.  Here in Midwest, we tend to think about outsourcing jobs and unemployment before anything else understandably.  So I appreciate starting out with bigger picture. 
 
 
 
Originally posted by gcle2003 gcle2003 wrote:

You cannot blame that on the NAFTA treaty.

 
Originally posted by Seko Seko wrote:

Also, our trade imbalance is clearly shown with both Canada and Mexico. I don't know why you said, "It seems to me at least I can't hardly blame NAFTA for U.S. trade deficits when Canada and Mexico import U.S. products more than anyone else.".
 
I guess the operative word there was 'hardly'.....Tongue   I guess I meant it as in comparison to the deficit with China.  But yes, if we combine U.S. trade deficits to Canada and Mexico, it is a sizable comparison to China, almost half, and definitely  bigger then any other regions. 
 
Originally posted by Seko Seko wrote:

Do you have links from last year as well? Also, our trade imbalance is clearly shown with both Canada and Mexico.
 
 
I haven't found one that showed like 2007  chart but that U.S. Census Bureau link have charts showing exports and imports separately.    
 
Originally posted by King Kang of Mu King Kang of Mu wrote:

U.S. Census Bureau number for trade with China 2010.
Trade in Goods (Imports, Exports and Trade Balance) with NAFTA with Mexico (Consume)
 
 

Exports (Goods)

Rank Country Exports (Year-to-Date) Percent of Total Exports
--- Total, All Countries 1,278.1 100.0%
--- Total, Top 15 Countries 926.6 72.5%
1 Canada
248.8 19.5%
2 Mexico
163.3 12.8%
3 China
91.9 7.2%
4 Japan
60.5 4.7%
5 United Kingdom
48.5 3.8%
6 Federal Republic of Germany
48.2 3.8%
7 Korea, South
38.8 3.0%
8 Brazil
35.4 2.8%
9 Netherlands
35.0 2.7%
10 Singapore
29.1 2.3%
11 France
27.0 2.1%
12 Hong Kong
26.6 2.1%
13 Taiwan
26.0 2.0%
14 Belgium
25.6 2.0%
15 Australia
21.8 1.7%

Imports (Goods)

Rank Country Imports (Year-to-Date) Percent of Total Imports
--- Total, All Countries 1,912.1 100.0%
--- Total, Top 15 Countries 1,433.8 75.0%
1 China
364.9 19.1%
2 Canada
276.5 14.5%
3 Mexico
229.7 12.0%
4 Japan
120.3 6.3%
5 Federal Republic of Germany
82.7 4.3%
6 United Kingdom
49.8 2.6%
7 Korea, South
48.9 2.6%
8 France
38.6 2.0%
9 Taiwan
35.9 1.9%
10 Ireland
33.9 1.8%
11 Venezuela
32.8 1.7%
12 Saudi Arabia
31.4 1.6%
13 Nigeria
30.5 1.6%
14 India
29.5 1.5%
15 Italy
28.5 1.5%

 
 
 
ok let me do simple math so you don't have to scroll up and down.  Just for U.S. to China, Canada and Mexico.....
                           Exports             Imposts                  Deficit              %
                           ($ billions)        ($ billions)              ($ billions)
 
China                     91.9       -       364.9        =       - 270.0           42.6
 
Mexico                  163.3      -       229.7        =       -  66.4            10.5
 
Canada                 248.8       -       276.5        =        -  27.7             4.4
 
                               
World Total         1,278.1     -     1912.1       =       -  634.0         100.0
 
 
 
Woops, I probably should have done that before anything else huh?   I used 2007 chart only because you see imports next to exports.     Actually it looks U.S. made considerable improvement on trade deficit with Canada and quite a bit on Mexico too.  Canada and Mexico combined shows about 15 % of total trade deficit of 2010.  
 
here is another interesting chart for trade deficit growth over the decades.....notice the recovery peak at 92' and free fall there after.   But still that has more to do with China than anything else.
[Balance+of+Payments-711512.jpeg]
 
Originally posted by gcle2003 gcle2003 wrote:

Perot was right about the $110-$100 business. It actually represents an import of $10. But if it's supposed to be a post-NAFTA deal, then whether or not it represents an improvement obviously has to depend on what was happening before: if pre-NAFTA the total cost was $150, then someone has benefitted from the change.
It's an interesting case where the consequent reduction in GDP makes people better off.
 
 
Originally posted by drgonzaga drgonzaga wrote:

There's a little nicety here that is ignored (and a member of the Chinese Politburo would know it), these supposed exports (be it Chinese or Mexican) are already foreign owned. A Ford-F150 assembled in Mexico is no more a "Mexican" product than a BMW assembled in the US is a "domestic" product. Now we all know that the United States pioneered in the maquiniladora principle during the 1960s with respect to Mexico; heck it had worked for the Auto Industry vis a vis Canada a decade earlier; hence, to trot out the circular trade here as an imbalance in US industrial exports and imports is little more than an exercise in smoke-and-mirrors with respect to "trade" and Perot was essentially correct. There are far more obvious reasons for the implosion of Detroit and these have nothing to do with NAFTA.
 
 
First thank both of you for confirming my suspicion.  Well, not really mine, Perot's.....   I would agree to a point with Dr.G's statement that the implosion of Detroit and these have nothing to do with NAFTA to a point by saying there are much bigger elements than NAFTA, like China's  low wage which as nothing to do with any FTA since we don't have one with China.  And as job displacement chart shows if we just get all the jobs back from China it's actually a growth even after we take out all the jobs we lost to the rest of the world(least that's how I was interpreting it).   And I admit again that I started out with this thread a my local sentiment and as an extension of Union thread, so my initial argument wasn't framed properly although I do think that framing led to this jobs/deficit discussion which was very helpful, least to me.  at this point it should be just study of NAFTA (and other FTA) in general as retrospective as the title suggests.   Don't mind me if I express my Midwestern sentiment again though.  I can only write what i see.  I will try to back it up as and open minded for response as much as I can. 
 
Originally posted by drgonzaga drgonzaga wrote:

Now, there is an interesting factor that none have considered, the absorption of Mexican agricultural production by the United States as a function of NAFTA, which has generated an incessant increase in Mexican "cost-of-living" indices--in itself a factor in Mexican social unrest. Few people realize that the largest grocery emporium in Texas, HEB Stores, is also the dominant presence in Coahuila and Nuevo Leon states in Mexico.
 
for the reasons I mentioned above i appreciate very that you bring up the NAFTA's effect on Mexico.  If this thread is to evolve into anywhere close to comprehensive we must talk about it's effects on Mexico and Canada.  Not just jobs and trades but its social, cultural effects also.  Same goes to U.S.   I regret that it's an area I know even less than I know about 'Midwestern sentiment'.  I will try to keep up with it but I'm afraid that I'm little preoccupied with U.S. job loss/deficit subject at hand.  But please feel free for any one talk about those issues.  I would also like to give a look a breaking down what kind of industry and jobs are moving to where too.  I would like to also take a look at how U.S. agricultural subsidies tie into FTAs also
 
I also appreciate you bring it up the word maquiniladora  into this conversation.   Again i can't get into it too much at the moment but feel free.    I did look up the word found something interesting in wiki.  I will leave that as my comment on that subject for now, if I may.
 
 
 
 
A maquiladora (Spanish pronunciation: [makilaˈðoɾa]) or maquila (IPA: [maˈkila]) is a concept often referred to an operation that involves manufacturing in a country that is not the client's and as such has an interesting duty or tariff treatment. It normally requires a factory, that may import materials and equipment on a duty-free and tariff-free basis for assembly or manufacturing and then "re-exports" the assembled or manufactured product, sometimes back to the originating country. A maquila is also referred to as a "twin plant", or "in-bond" industry. The principal examples of this sort of operation occur in Latin America, but also occurs in other countries in the world, that have adequate legislation. Currently about 1.3 million Mexicans are employed in maquiladoras.......
 
.......The North American Free Trade Agreement (1994) favorably impacted the growth of maquila plants. During the five years before NAFTA, the maquila employment had grown at the rate of 47%; this figure increased to 86% in the next five years. The number of maquila plants grew from about 2700 to about 3700 in 2001.[3] In the 1970s, most maquiladoras were located around the Mexico – United States border. By 1994, these were spread in the interior parts of the country, although majority of the plants were still near the border........
 
Taxation
  • Corporate Income Tax - Companies operating under the Maquila program can choose to pay their corporate income tax in one of three ways, 6.9% of the total value of all assets that the company possesses in Mexico, 6.5% of the operating cost and expenses for that year or arrange to have a transfer pricing agreement approved by the appropriate US and Mexican tax authorities. In all cases, the tax is deductible from US corporate income tax.
  • Real Estate Tax - There is a nominal real estate tax on industrial real estate.
  • Employment Tax - A maquiladora has to pay an employment tax in addition to the normal employee income tax it must take out of its employees wage.
  • Value Added Tax (VAT) - Maquiladora companies are subject to paying VAT in Mexico on services or materials purchased in Mexico. Application for reimbursement of these VATs may be made to Mexican government. Maquilas once were taxed on the value add of products manufactured or assembled then shipped back across the border for resale but this taxation has been discontinued

.......

Since globalization and physical restructuring[citation needed] have contributed to the competition and advent of low-cost offshore assembly in places like China, and countries in Central America, maquiladoras in Mexico have been on the decline since 2000: According to federal sources, approximately 529 maquiladoras shut down and investment in assembly plants decreased by 8.2 percent in 2002.[5] Despite the decline, there still exist over 3,000 maquiladoras along the 2,000 mile-long United States–Mexico border, providing employment for approximately one million workers, and importing more than $51 billion in supplies into Mexico.[7] As of 2006, maquiladoras still account for 45 percent of Mexico’s exports.[8] Maquiladoras, in general, are best represented among operations that are particularly assembly intensive.
 
 
 
 
 
 
It's funny that some of the Mexican jobs are now going to Central America.....CAFTA?
 
I guess this is where I'm gonna try to drive this post home.   Why does U.S. not have a FTA agreement with China? ( oh, no, i just made it more complicated....)     After looking at few charts and reading few articles, I came to a conclusion that because the Chinese wage is still so cheap that after shipping it around half way across the world back and forth paying all the taxes, still cheaper than American product.    But what about the stuff that too heavy or expensive to ship around and pay all the taxes, like big car parts?   What if you can just drive to a country with cheaper labor without paying taxes?   Let's call that 'the Super Highway'?Wink  Plus if it's closer even shipping or flying will be cheaper too.   and the wage difference could be varied among different industries too not just countries.
 
 Ermm  
 
So here is my another Midwestern question.  If my above assumption is correct, does NAFTA function as corporate tax break to move jobs from U.S. to Mexico or Canada for the companies or industries that are too expensive for them to ship the job to China and ship the product back and forth to U.S.and pay all the taxes in between?    Another word, is it a tax break for outsourcing jobs to Canada and Mexico?  And now some to Central America through CAFTA? 
 
 
 
I'm gonna end with last map which is from what seems to be a leftist or possibly anarchist article.  interesting map though.
 

The Fight of Our Lives - Map 1

 
Well I was gonna end there but i couldn't just end it with lopsided argument  from the leftists so let's hear it from the our beloved former governor of Michgan, Mr. John Engler.
 

http://www.heritage.org/Research/Reports/1993/06/BG946nbsp-Why-the-Governors-Support-the-NAFTA

According to Governor John Engler, although Michigan "is more than a thousand miles from the border, only California and Texas export more goods to Mexico than does Michigan. Among the foreign nations with which we trade, Mexico is our second largest export customer." (Statement by Governor John Engler on NAFTA, May 27, 1993.) And the benefits are concrete. Says Engler: "31,000 jobs depend directly on trade with Mexico. In 1991, Michigan companies sold their products to Mexican customers at the rate of $180,000 an hour -- and that added up to $1.6 billion by the end of the year. Today [1993] Michigan exports to Mexico are fast approaching $2 billion a year." (Statement by Governor John Engler on NAFTA, May 20, 1993.)U.S. Department of Commerce figures and analysis conducted by the Governor's own state economic development agency back him up: Over the past five years food product exports are up by 3,719 percent; textiles up by 2,975 percent; furniture and fixtures up by 1,509 percent; electric and electronic equipment up by 363 percent.

Engler also challenges organized labor's opposition to the NAFTA, saying that they "should understand that if cheap labor were the key to company location, then Vietnam or Somalia would be manufacturing meccas. They are not. Our location, knowledge infrastructure, and workers' skill level give us what I believe is the 'Michigan Advantage' -- and NAFTA will strengthen our advantages even more. We in Michigan should be concerned about union opposition because if NAFTA is not ratified, it will cost us jobs here in Michigan."

Governor Engler's strong advocacy is in sharp contrast to Michigan's congressional delegation. Although Michigan will be a big winner under the NAFTA, most of the Michigan delegation remains opposed to it. In particular, Senator Donald Riegle and Congressman John Dingell and strong allies of organized labor vocally oppose the NAFTA. Senator Carl Levin voted in May 1991 against giving the President the "fast-track" authority to negotiate trade agreements such as the NAFTA, and has expressed serious misgivings about the pact. Levin, who receives considerable financial support from organized labor, also opposed the 1988 U.S.-Canada Free Trade Agreement, the precursor to the NAFTA. Today, however, his state employs 234,000 people in jobs directly dependent on exports to Canada.

 
 
 
P.S. Sorry for the long post.....mostly it was charts and such anyway.  next time I will try to reply to each person separately if it gets this long.....Embarrassed  I will watch out for long copy and paste with texts too, and try to summarize them.  
 


Edited by King Kang of Mu - 05 Mar 2011 at 18:26
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 05 Mar 2011 at 22:13
Despite the possibility that I shall call the wrath of the international socialist conspiracy down upon my head, the premise that outsourcing "costs" American labor's "jobs" is entirely fallacious. In terms on international commerce those "jobs" would have been lost inevitably under the premise of competition and cheaper supply. The perfect example can be seen in the fate of "bulk" steel that shut the mammoth smelters of the old industrial core. Such does not mean that the domestic steel industry disappeared--in fact it is more vibrant than ever--instead, the highly specialized products dependant upon sharpened skills thrive within the ambiance of modern plants shaped to exploit these labor assets. What went were the massive mills turning out metal that nevertheless had to undergo further processing for utilization in the production of other commodities. What disappeared were jobs that did not depend upon intensive skill but instead were the repetitive drudgery of mass production operating under the stasis of labor unions controlling access to manpower. Only the perpetuation of old "control of markets" bureaucratic fiats such as tariffs and excise taxes could have postponed the inevitable. It is not by coincidence that when international corporations in the automobile industry erected their assembly plants upon American soil they did so in areas of the country where the monopoly of "Big Labor" did not predominate and as a means through which to minimize the roil in the political arena demanding tariffs and taxes on automobile production from other countries. [And here one has to also recognize that US corporate investment in foreign automible production--an effort pioneered by the old Chrysler Corporation in the late 40s and early 50s--played a significant role in the importation of foreign automobiles onto the American market as well]
 
The ghost of Samuel Gompers and his emphasis on skilled and specialized labor (as opposed to the novelty of industrial mass production as an exercise in "skilled" labor) has come home to roost.
 
As an aside to Mu and his query on "motors" etcetera as concerns the China that has been underway for some time now and the fact that Buick is the hot ticket on the Chinese automobile market should serve as a signpost for further research by him.


Edited by drgonzaga - 07 Mar 2011 at 00:16
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 06 Mar 2011 at 05:33

One shouldn't overlook the fact that for some people the actual purpose of free trade areas is to help the poorer countries. That sending jobs to China may have cost $1400 per worker in the US is not necessarily bad if it has led to an increase in China's inome per worker, or a decrease in American prices to the consumer.

After all the main reason for the job losses is the reduction in retail prices they make possible. Since Dr G relatedly brings up Gompers, let's point out that the AFL gains where the CIO loses. 


Edited by gcle2003 - 06 Mar 2011 at 05:36
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Seko- Quote  Post ReplyReply Direct Link To This Post Posted: 08 Mar 2011 at 00:34
Originally posted by drgonzaga drgonzaga wrote:

Despite the possibility that I shall call the wrath of the international socialist conspiracy down upon my head, the premise that outsourcing "costs" American labor's "jobs" is entirely fallacious. In terms on international commerce those "jobs" would have been lost inevitably under the premise of competition and cheaper supply. The perfect example can be seen in the fate of "bulk" steel that shut the mammoth smelters of the old industrial core. Such does not mean that the domestic steel industry disappeared--in fact it is more vibrant than ever--instead, the highly specialized products dependant upon sharpened skills thrive within the ambiance of modern plants shaped to exploit these labor assets. What went were the massive mills turning out metal that nevertheless had to undergo further processing for utilization in the production of other commodities. What disappeared were jobs that did not depend upon intensive skill but instead were the repetitive drudgery of mass production operating under the stasis of labor unions controlling access to manpower. Only the perpetuation of old "control of markets" bureaucratic fiats such as tariffs and excise taxes could have postponed the inevitable. It is not by coincidence that when international corporations in the automobile industry erected their assembly plants upon American soil they did so in areas of the country where the monopoly of "Big Labor" did not predominate and as a means through which to minimize the roil in the political arena demanding tariffs and taxes on automobile production from other countries. [And here one has to also recognize that US corporate investment in foreign automible production--an effort pioneered by the old Chrysler Corporation in the late 40s and early 50s--played a significant role in the importation of foreign automobiles onto the American market as well]
 
The ghost of Samuel Gompers and his emphasis on skilled and specialized labor (as opposed to the novelty of industrial mass production as an exercise in "skilled" labor) has come home to roost.
 
As an aside to Mu and his query on "motors" etcetera as concerns the China that has been underway for some time now and the fact that Buick is the hot ticket on the Chinese automobile market should serve as a signpost for further research by him.


Doc said:  ...the premise that outsourcing "costs" American labor's "jobs" is entirely fallacious.
My dear astute Herr Doktor, I know you are above oxymoronic hyperbole but this is either a case of mistaken identity, dyslexia or just a bad hair day. Literally, 'outsourcing' means - The procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs. Key words are procuring and outside supplier.

The market is tight in most every industry. Outsourcing saves money for the owner. We may be selling more raw materials for outsourcing but we definitely are losing production jobs as well! No two ways to cut this. We either produce or we do not produce goods. When we do not then somebody else does it for us or is competing against us (for market share). Not too difficult really. Now if that someone else is them (foreign company) then they get the lions share of profit. If it is US opening shop in a distant land then more of the same but no wages for US workers.

...repetitive drudgery of mass production operating under the stasis of labor unions controlling access to manpower. That so-called drudgery is not only about jobs but about people, wages and families which if not supported by ownership would eventually suckle off Federal mother's tit. When workers are satisfied then the trickle down employs whole towns. Which way do you Republicans want it? Big or small Federal government. Make up your minds. Oh, you want both small Government and no Unions. You sound like many of the few large business owners. 

In fact one would be hard pressed to tell what an American or even foreign car is being that each vehicle is comprised of a mish-mash of parts from diverse vendors around the globe as they are either put together in American assembly plants or elsewhere. Fact of the matter is someone is making those corporate profits and someone is earning hourly and salary wages.

http://www.automotiveaddicts.com/inthenews/07-10-06.html

http://articles.cnn.com/2008-12-12/us/american.cars_1_foreign-brands-dutch-mandel-american-car?_s=PM:US




Edited by Seko - 08 Mar 2011 at 00:35
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 08 Mar 2011 at 01:55
What, my esteemed Forum Fuhrer Seko a shill for the rhetoric of Michael Moore! The inescapable bottom line here is that those "jobs" (spare me the treacle about "people. wages and family" a la Uncle Tom's CabinEvil Smile) are lost no matter what in terms of global reality and economic force majeure. Yes, the classic definition of "outsourcing" is as you say, but then corporations such as General Motors took shape upon that premise and it is only later that it took "ownership" of such entities [the prime example can be found in the fate of the Fisher Company--you know the little tag that appeared on Buicks and many an other GM vehicle, "Body by Fisher"]. What we are discussing here is the notion that "outsourcing" is some sort of evil forecasting doom and economic collapse rather than being a reality dating back to early industrialization and corporate organization. Production and employment as a form of "welfare stipend" is ludicrous--and in essence you are raising a new twist to the meaning of "corporate responsibility" that sounds more like an argument for the nationalization of industry and the formulation of a new USSR--hmm, the Union of Soviet Socialist States of AmericaErmm as the zenith of central planning and industrial production!?! When will someone utter the truth here? There exists no dearth of jobs in the United States, only a dearth of individuals willing to perform the jobs that are available under the premise that "they do not suit" them. Shall we discuss the billions dedicated to retraining and relocation spent to address the "unemployment" problem in certain industries? It is not by accident that the "service" sector is now the driving force in the life of unions and as ABC News emphasized in their little special vignette on "Made in the USA" try finding a major appliance that is truly an All-American product--the corporate logo is American but...only the labor-intensive luxury end of that market justifies domestic production.
 
Here to stoke your ire:
 
 
PS: By the way do not even think of buying an RCA TV set under the illusion that it is an American product in some way. It is a wholly made Chinese product marketed in the USA as RCA (rather than TLC, the true maker) by license arrangement with the holders of the old trademark, Technicolor SA, a French conglomerate. The General Electric Corporation showed no mercy back in 1986 when it acquired the pioneer company and milked every possible cent from the dismantling of this enterprise. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 08 Mar 2011 at 02:27
It is obviously true that if a company in the US employing local workers to produce a certain product (as Delphi did for GM at one time) and then it reduces output, fires people and opens a new plant in Luxembourg, hiring new workers, mainly German, I understand, then jobs have been 'lost' to the US, though whether they have been won by Luxembourg or Germany remains unclear. So outsourcing certainly can 'cost jobs'. And it may result from cheaper foreign labour.
 
However labour costs are not the only factor in the decision, since it may well be done to make transportation cheaper, get around import barriers, produce stuff better tailored to local tastes, and for several other reasons.
 
Frankly I doubt very much indeed that outsourcing from the US to Germany, or especially Lixembourg, has anything to do with the cost of labour, since you have to include in that social benefits as well as wages. Certainly the UK lost jobs to Germany and France and other European countries in the early '70s at a time when UK unit labour costs were considerably lower than European ones - at least in north-western Europe.
 
I actually don't see where Dr G's and Seko's views actually contradict one another.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote drgonzaga Quote  Post ReplyReply Direct Link To This Post Posted: 08 Mar 2011 at 02:40
Devious little me mentioned General Electric because it is a prime example of corporate manufacturing reality. GE Aircraft Engines is the prime example of the transnational synergy--
 
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