Ranting to /dev/null

I believe the basic idea is that with free trade such and such a good can be made cheaper in country X and therefor will cause the loss of jobs in another country.

See, you and I don't fear this, because, as affluent Americans we know that if for some reason, say, they outsource all programming jobs, we can get a job doing something elsewhere.

This doesn't work for folks doing farming or factory work.

I do see that, but I would think that would be cause for North Americans to oppose free trade, as we're the ones using punitive tariffs to protect our agricultural and manufacturing sectors. Remove those and South American farmers and industrialists would have a chance to compete. Except that there are places like Brazil and Argentina that are also using tariffs to support what would be otherwise non-viable industries.

There isn't any way American farmers can compete with Third World farmers on the open market. So let them go out of business.

It hasn't been the case that free trade agreements raise the standard of living in developing countries. Mexico has seen an increase in the percentage of people under the poverty line since NAFTA implemented. Manufacturing wages in Mexico fell 21% from 1995 to 1999, and that, coupled with the loss of manufacturing jobs in the U.S. sounds like a lose-lose situation.

"Free trade" agreements bypass the individual producer. The WTO runs the show, and corporations run the WTO. Instead of a true laissez-faire application, you get what amounts to "socialism for multinationals."

I am not saying that tariffs and protectionism need to remain. But under these so-called "free trade" agreements, the opposite occurs: prices are driven artificially lower than a fair market would bring by "dumping" and other practices. Plus, bottom-line labor and environmental protections are vaporized, so there are serious questions as to sustainability (and I'm not using that word in the touchy-feely sense -- I mean, simply, the entire thing crumbles in the long-term view).

Personally, I feel that these arrangements are the fast track to a return to feudalism. We might get there eventually anyway (and from some things I've read on your blog I am not sure you would oppose that idea), but it's much more of a sure thing this way.

Jeff shared some thoughts on this topic a few months ago: Why I Support Free Trade Agreements.

I'm just fine with bypassing the individual producer. No objections there at all. "Dumping" isn't free trade. As far as I understand the practice, this is only made possible by protectionism. But capitalism has always been about creative destruction anyway: certain industries shouldn't survive, and only do as they function as parasites. Cull 'em.

Labor protections and environmental protections will eventually be generated by a free market, e.g. Wal-Mart offering health benefits to its employees. But they're also not stupid: they can afford to argue for an increase in minimum wage (which is anti-capitalist) because it would force their competition out of business. Any time you have arbitrarily determined obstacles in the flow of wealth, you get bizarre eddies and counter-intuitive results, like that. Wages in China, which has long been considered one of the worst labor environments in the world, are on the upswing as the demand for labor has exceeded the supply. It all happens eventually, and forcing things through legistlation only makes things worse. When I say "free" trade, I really mean free, as in absent any and all protections for domestic corporations.

This is not to say that regulations are always inappropriate. USDA and FDA regulations are entirely alright: someone needs to determine standards for health and food products, and the government is capable of doing that better than any private group would ever be. But this isn't price-fixing or protectionism, it's simply laying down product requirements. These would apply equally to everyone, domestic or foreign, as long as they want to sell their product here.

And no, I wouldn't strongly oppose some kind of corporate/democratic feudalism. Feudalism worked pretty well before, and all it needs is some kind of update to make it functional for national, post-industrial economies. It's the only form of government that I'm aware of that has concepts of provision for the poor built right into it, while simultaneously providing an incentive to participate in governance. The current system penalizes you for being rich and requires you to take care of your class enemies.

alice: I followed the link, but it doesn't seem to have anything to do with free trade. Is the URL correct?

On the other hand what looks like "dumping" to one party is, in today's bizarro world of labor regulations, tariffs, and government subsidies, more than likely a competitor selling their product at an actual market price, minus all the regulatory nonsense. A Latin American corporation selling foodstuffs at their actual cost would immediately drive an independent American farmer out of business, as costs South of the border are a lot lower than they are here. But this isn't dumping. It's just reality.

Whoops. Sorry about that! Why I Support Free Trade Agreements.

Alice: I agree with the author's identification of the problem, but I'm leery of so-called "fair" trade ideas. The term "free trade" may be subject to misuse, but I still think that the only truly "fair" trade is truly free trade. The only truly fair price for any good is the one determined by free-floating supply and demand, and artifical blocks like government subsidies and tariffs always impede the realization of this price. If the market price for a good - the true market price - is really low or below what it takes to survive, that doesn't mean the price is unfair, only that the good in question isn't worth producing on that scale.

Agricultural subsidies are, in my book, entirely unacceptable. They are no different than tariffs. They need to go. Once they do, Haitians will be able to not only buy their own agricultural products, but actually become exporters.

Ryan, I strongly agree with free trade as you describe it above. But it isn't reality. The reality is that corporations have a huge say in trade legislation, so the strongest corporations (which are generally in our country) are going to push for any advantage they can get. So if I were a small South American country, I would really want free trade, but I wouldn't want to do it with the U.S. under U.S. terms.