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Kuros
Joined: 27 Apr 2004
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 Posted: Tue Apr 10, 2012 7:41 am Post subject: |
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Expert consensus: On average, citizens of the U.S. have been better off with the North American Free Trade Agreement than they would have been if the trade rules for the U.S., Canada and Mexico prior to NAFTA had remained in place
4 Politically Controversial Issues Where All Economists Agree
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So why do pundits and voters lag economists in supporting free trade? In his excellent book The Myth of the Rational Voter, Bryan Caplan provides evidence that people suffer from a handful of systematic biases that influence their beliefs, and three of these can help explain why voters are skeptical of trade: anti-market bias, anti-foreign bias, and pessimism bias.
Paul Krugman provides three reasons why intellectuals in particular resist the theory of comparative advantage that underpins free trade: 1) opposition to free trade is intellectually fashionable, 2) comparative advantage is hard to understand, and 3) they are averse to a fundamentally mathematical understanding of the world. |
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DIsbell
Joined: 15 Oct 2008
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| Posted: Tue Apr 10, 2012 6:16 pm Post subject: |
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Did those experts say anything about the citizens of Mexico? I think it's pretty much accepted even by liberals that free trade works out to be advantageous for America (maybe not always necessarily American workers, but yes for consumers and businesses). Rich countries with highly developed industries (specializations able to be adroitly used for comparative advantage, to put it in the terms of the articles you've posted) that also happen to get lots of government funding (agriculture subsidies, use of public university research, huge gov't contracts) do fine; the concern is how free trade agreements affect the less-fortunate countries.
I suggest reading Ha-Joon Chang, a Cambridge economist who writes extensively on the subject. He is a capitalist, but argues that developing economies require some degree of protection before being able to jump into free-trade with the big boys, and he does so in the context of extensive historic review. You might find a new perspective. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Apr 11, 2012 7:29 am Post subject: |
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| DIsbell wrote: |
I suggest reading Ha-Joon Chang, a Cambridge economist who writes extensively on the subject. He is a capitalist, but argues that developing economies require some degree of protection before being able to jump into free-trade with the big boys, and he does so in the context of extensive historic review. You might find a new perspective. |
I'm open to the argument that developing economies require some degree of protection, and the GATT-WTO regime allows for such limited protectionism, particularly in the agricultural sector.
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The WTO Agreements specifically recognize various domestic policy objectives and provides the flexibility to address them in a disciplined and transparent manner. For agriculture, the WTO system has been developed taking account of the sensitivities particular to the agriculture sector. Thus, the WTO disciplines relating to agriculture are different from those relevant for non-agricultural products. That is why there is a separate Agreement on Agriculture, which provides relatively greater flexibility. Furthermore, for poor farmers, developing countries are allowed to give any domestic policy assistance that they wish to give.
This basic structure is maintained in the Doha Round too. The Doha Round also includes the possibility for developing countries to use a new and easier safeguard mechanism for agriculture, and provides additional flexibilities for public stockholding operations in developing countries. The Doha negotiations aim at reducing the inequities which arise due to differences in levels of development, thus creating a more level playing field for competition. This will help countries produce more efficiently and to increase the beneficial effects of the several agriculture investment and infrastructure-related initiatives that are mentioned in the CFA.
Likewise, WTO disciplines do not prevent the adoption of policies normally mentioned to achieve objectives, such as promoting pro-poor agricultural growth, reducing market volatility, and expanding social protection and child nutrition. Even for agriculture tariffs, there is a significant flexibility, including for least-developed countries. In fact, all the domestic policy initiatives, such as seeds, fertilizers, focus on small farmers, investment, availability of funds etc., that have been mentioned in the sessions today for addressing food security are possible to be implemented under the WTO. The WTO Agreement is not a constraint on using such initiatives. |
The WTO regime also has anti-dumping provisions.
Nevertheless, Mexico is an OECD nation, a globally-recognized developed economy. And NAFTA is a trilateral regional voluntary trade agreement. I very much doubt Ha-Joon Chang would advocate repealing NAFTA. Furthermore, I very much doubt Ha-Joon Chang would break from his economic discipline and endorse the polisci-derivative "Shock Therapy" thesis. |
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some waygug-in
Joined: 25 Jan 2003
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motiontodismiss
Joined: 18 Dec 2011
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| Posted: Wed Apr 11, 2012 4:24 pm Post subject: |
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| adzee1 wrote: |
Maybe if the US did there fair share of gun control, and the citizens reduced their drug intake so they are not the worlds number 1 consumer, then the drug war would not have claimed so many lives.
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The problem happens to be the fact that the US criminalizes drugs in the first place. People will do drugs no matter how severely you punish them for it. Just let them. But let's tax the living crap out of them. |
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Underwaterbob
Joined: 08 Jan 2005
Location: In Cognito
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| Posted: Wed Apr 11, 2012 4:25 pm Post subject: |
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Free Trade Agreement agreement?
Apologies. |
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adzee1
Joined: 22 Jul 2010
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| Posted: Wed Apr 11, 2012 7:36 pm Post subject: |
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| motiontodismiss wrote: |
| adzee1 wrote: |
Maybe if the US did there fair share of gun control, and the citizens reduced their drug intake so they are not the worlds number 1 consumer, then the drug war would not have claimed so many lives.
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The problem happens to be the fact that the US criminalizes drugs in the first place. People will do drugs no matter how severely you punish them for it. Just let them. But let's tax the living crap out of them. |
I agree that would be a good solution and it has been proved already in Portugal.
The problem however is that about half of the US are conservative, right wing nuts who happen to have a lot of money and therefore power. They would never agree to decriminalisation because they have all been brainwashed by the media & governments stance on the drug war. |
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Spartacist
Joined: 18 Feb 2012
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| Posted: Fri Apr 13, 2012 5:24 pm Post subject: |
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| Kuros wrote: |
Expert consensus: On average, citizens of the U.S. have been better off with the North American Free Trade Agreement than they would have been if the trade rules for the U.S., Canada and Mexico prior to NAFTA had remained in place
4 Politically Controversial Issues Where All Economists Agree
| Quote: |
So why do pundits and voters lag economists in supporting free trade? In his excellent book The Myth of the Rational Voter, Bryan Caplan provides evidence that people suffer from a handful of systematic biases that influence their beliefs, and three of these can help explain why voters are skeptical of trade: anti-market bias, anti-foreign bias, and pessimism bias.
Paul Krugman provides three reasons why intellectuals in particular resist the theory of comparative advantage that underpins free trade: 1) opposition to free trade is intellectually fashionable, 2) comparative advantage is hard to understand, and 3) they are averse to a fundamentally mathematical understanding of the world. |
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I don't mean to completely diss the noble profession of economics, but when large numbers of the profession fail to predict a global financial crisis I don't have a lot of faith in what constitutes consensus in the discipline. A lot of economics, including the theory of comparative advantage, are models based on assumptions that don't bear out in real life or even in theory. For a thorough debunking of economics I recommend Steve Keen's Debunking Economics. What we need is evidence of what happens in real world situations when free trade agreements are applied, and I think they need to be looked at on a case-by-case basis. The evidence from NAFTA and benefits it provided to the ordinary people of all the nations in North America is mixed at best. |
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Dave Chance
Joined: 30 May 2011
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| Posted: Sat Apr 21, 2012 7:50 pm Post subject: |
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Coming soon to a Seoul location near you, courtesy of the FTA.
http://www.japantoday.com/category/world/view/report-wal-mart-hushed-up-bribe-network-in-mexico
NEW YORK �
Wal-Mart Stores Inc hushed up a vast bribery campaign that top executives of its Mexican subsidiary carried out to build stores across that country, according to a published report.
The New York Times reported Saturday that Wal-Mart failed to notify law enforcement officials even after its own investigators found evidence of millions of dollars in bribes. The newspaper said the company shut down its internal probe despite a report by its lead investigator that Mexican and U.S. laws likely were violated.
The bribery campaign was reported to have first come to the attention of senior executives at Wal-Mart in 2005, when a former executive of its largest foreign subsidiary, Wal-Mart de Mexico, provided extensive details of a bribery campaign it had orchestrated to win market dominance.
http://nymag.com/daily/intel/2012/04/wal-marts-mexican-bribery-scandal.html
Apparently, back in 2005, a recently resigned Mexican executive e-mailed a top Wal-Mart lawyer with a tip-off: The subsidiary had bought its way to market dominance by paying millions in bribes for construction and zoning permits. Within days, the company had a team of investigators in Mexico City who quickly uncovered hundreds of payments totaling more than $24 million. But instead of acting on the lead investigator's report � which noted a "reasonable suspicion" that both U.S. and Mexican laws had been violated � Wal-Mart's top management hushed the whole thing up.
http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?_r=2&hp |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sun Apr 22, 2012 5:49 am Post subject: |
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| Spartacist wrote: |
| Kuros wrote: |
Expert consensus: On average, citizens of the U.S. have been better off with the North American Free Trade Agreement than they would have been if the trade rules for the U.S., Canada and Mexico prior to NAFTA had remained in place
4 Politically Controversial Issues Where All Economists Agree
| Quote: |
So why do pundits and voters lag economists in supporting free trade? In his excellent book The Myth of the Rational Voter, Bryan Caplan provides evidence that people suffer from a handful of systematic biases that influence their beliefs, and three of these can help explain why voters are skeptical of trade: anti-market bias, anti-foreign bias, and pessimism bias.
Paul Krugman provides three reasons why intellectuals in particular resist the theory of comparative advantage that underpins free trade: 1) opposition to free trade is intellectually fashionable, 2) comparative advantage is hard to understand, and 3) they are averse to a fundamentally mathematical understanding of the world. |
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I don't mean to completely diss the noble profession of economics, but when large numbers of the profession fail to predict a global financial crisis I don't have a lot of faith in what constitutes consensus in the discipline. A lot of economics, including the theory of comparative advantage, are models based on assumptions that don't bear out in real life or even in theory. For a thorough debunking of economics I recommend Steve Keen's Debunking Economics. What we need is evidence of what happens in real world situations when free trade agreements are applied, and I think they need to be looked at on a case-by-case basis. The evidence from NAFTA and benefits it provided to the ordinary people of all the nations in North America is mixed at best. |
What evidence are you talking about? How do you empirically compare the results of two decades of NAFTA versus the results of two decades without NAFTA? We live in a world where NAFTA was enacted. Hence the reliance on mathematical assumptions.
I tackled this complaint in the current events thread: yes, economists have failed particularly with the economic crisis. Efficient market hypothesis is pretty much (or should pretty much) be dead. But its a bit of a non-sequitor. I don't see how that challenges the comparative advantage hypothesis.
I also must insist that free trade agreements do not imperil efforts to keep a localized economy. Those jobs that are easily outsourced are going to be easily outsourced. There's an incredible futility to protectionism. As long as one developed nation agrees to lower barriers, it undermines the entire advantage protectionism provides. On the other hand, many jobs and professions are anchored in place. You cannot outsource plumbers or car repairmen or healthcare services. Additionally, we have seen successful efforts to build local industries premised on ideology and not cost. Look at the locavore movement and grocery co-ops. |
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rollo
Joined: 10 May 2006
Location: China
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| Posted: Sun Apr 22, 2012 1:09 pm Post subject: |
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Not going to get near the nice debate on economic theories but I am sceptical that Mexico's economic problems are simply the result of Nafta and the U.S. drug policies. It seems intuitive that the Mexican economy is more compex than that. Also we must take into account local actors and actions. A common flaw in such a U.S centric view is that the citizens of countries are portrayed as helpless pawns who exist without free will.
Is there a country that enters into to trade agreements with other countries that does not seek avantages for its own merchants? |
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radcon
Joined: 23 May 2011
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| Posted: Sun Apr 22, 2012 1:35 pm Post subject: |
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| Dave Chance wrote: |
Coming soon to a Seoul location near you, courtesy of the FTA.
http://www.japantoday.com/category/world/view/report-wal-mart-hushed-up-bribe-network-in-mexico
NEW YORK �
Wal-Mart Stores Inc hushed up a vast bribery campaign that top executives of its Mexican subsidiary carried out to build stores across that country, according to a published report.
The New York Times reported Saturday that Wal-Mart failed to notify law enforcement officials even after its own investigators found evidence of millions of dollars in bribes. The newspaper said the company shut down its internal probe despite a report by its lead investigator that Mexican and U.S. laws likely were violated.
The bribery campaign was reported to have first come to the attention of senior executives at Wal-Mart in 2005, when a former executive of its largest foreign subsidiary, Wal-Mart de Mexico, provided extensive details of a bribery campaign it had orchestrated to win market dominance.
http://nymag.com/daily/intel/2012/04/wal-marts-mexican-bribery-scandal.html
Apparently, back in 2005, a recently resigned Mexican executive e-mailed a top Wal-Mart lawyer with a tip-off: The subsidiary had bought its way to market dominance by paying millions in bribes for construction and zoning permits. Within days, the company had a team of investigators in Mexico City who quickly uncovered hundreds of payments totaling more than $24 million. But instead of acting on the lead investigator's report � which noted a "reasonable suspicion" that both U.S. and Mexican laws had been violated � Wal-Mart's top management hushed the whole thing up.
http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?_r=2&hp |
Are you implying that Walmart will bribe its way into the Korean market with help of the FTA? That ship sailed a long time ago. Walmart came to Korea and failed. Because Koreans are able to choose where they shop and what they buy and are not some powerless pawns in the US plan to dominant the universe. |
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bucheon bum
Joined: 16 Jan 2003
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Dave Chance
Joined: 30 May 2011
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| Posted: Tue Apr 24, 2012 9:11 pm Post subject: |
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From the article-
The reversal appears to be a result of tightened border controls, a weak U.S. job and housing construction market, a rise in deportations and a decline in Mexican birthrates, said the study, which used U.S. and Mexican census figures and Mexican government surveys.
Gustavo Velasquez, 38, who came from Oaxaca, Mexico, 12 years ago and serves as the director of the D.C. Office on Human Rights, said that the scarcity of U.S. jobs is causing more Mexicans to think twice about moving.
It is better to be unemployed in Mexico than to be unemployed in the United States, he said, because most migrant workers leave their families in Mexico. �They miss the warmth of being in a welcoming community,� he said, adding that with tougher border control and more deportations, Mexicans would rather be in a �precarious situation than in a situation of fear.� |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed Apr 25, 2012 5:12 am Post subject: |
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| Dave Chance wrote: |
From the article-
The reversal appears to be a result of tightened border controls, a weak U.S. job and housing construction market, a rise in deportations and a decline in Mexican birthrates, said the study, which used U.S. and Mexican census figures and Mexican government surveys.
Gustavo Velasquez, 38, who came from Oaxaca, Mexico, 12 years ago and serves as the director of the D.C. Office on Human Rights, said that the scarcity of U.S. jobs is causing more Mexicans to think twice about moving.
It is better to be unemployed in Mexico than to be unemployed in the United States, he said, because most migrant workers leave their families in Mexico. �They miss the warmth of being in a welcoming community,� he said, adding that with tougher border control and more deportations, Mexicans would rather be in a �precarious situation than in a situation of fear.� |
Right. I didn't say illegal immigration was decreasing due to a booming Mexico either. Neither side is- that was my point. |
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