America and Free Trade

[Exarch]

By definition, free trade is 'trade between countries, free from governmental restrictions or duties' or 'international trade free from protective duties and subject only to such tariffs as are needed for revenue'.

As we are all no doubt aware, the opposite of free trade is protectionism which the dictionary.com defines as 'the theory, practice, or system of fostering or developing domestic industries by protecting them from foreign competition through duties or quotas imposed on importations'.Strictly speaking, one can also enact a policy of protectionsim by subsidising domestic industries as well.

Personally i reckon it's funny how the American government (especially under dubya), espouses free trade, yet protects its own agrucultural/film industries at the expense of other countries.
Don't get me wrong, i love americans as a people, but there is seriously something wrong with the US government proclaiming free trade on the one hand and protecting themselves when free trade looks to bite them on the arse.
i'm referring to the Australia-USA FTA of 2004 of course, but in general this thread is directed at the apparent hypocrisy displayed by the USA when it comes to free trade.

Discuss

[Ma'ahes]

Well, tbh, it's no different than any other country--they want to protect jobs. Economically-speaking, trade benefits all, as in net gains. However, politically-speaking, it's not great to just sit idly by when citizens are losing their jobs. So, while it's great for the USA to get involved with mostly-free trade, the individual Senators and Representatives are motivated to protect the jobs of their constituency. Is it hypocrisy? Hell yeah. But it makes sense and it applies to virtually every country in the world.

[Sidmen]

Free trade is death to any economy. I won't get into that ATM, but the best option we have is 'Fair Trade". What is fair trade? Its whatever the two countries agree on to be fair for both sides.

[Exarch]

well, i guess it goes without saying, the oz-yankee FTA wasnt even 'fair' let alone 'free'.
we were ****ed over, again and again.
i hate to say it, but i compare america in this sense to that 'friend' who always comes out with ur mates and doesnt pay when it's his turn to shout everyone.
or that 'friend' who's only ur mate cuz he wants somethin from you

[Last Roman]

America has never been a practicer of free-trade, and don't let anyone tell you otherwise. Even the libertarian's hero, Jefferson, promoted protectionism.

[ErikinWest]

America has never been a practicer of free-trade, and don't let anyone tell you otherwise. Even the libertarian's hero, Jefferson, promoted protectionism.

I've never heard of Jeffersonian protectionism, I've heard of that from Hamilton, but not from Jefferson. So perhaps you could enlighten me.

Erik

[Last Roman]

I've never heard of Jeffersonian protectionism, I've heard of that from Hamilton, but not from Jefferson. So perhaps you could enlighten me.

Erik

specifically, his endorsement of the Embargo Act of 1807

though to be fair, his endorsement of such an act was only because of more extreme circumstances.

[Sidmen]

Sorry Exarch, but you can place blame for that squarely at the feet of your own government. They accepted the agreement after all, they weren't forced to accept it.

[Exarch]

Sorry Exarch, but you can place blame for that squarely at the feet of your own government. They accepted the agreement after all, they weren't forced to accept it.

actually, the americans were negotiating from a position of power-not exactly what you'd call 'fair'. The protective devices the americans had over their own industries ensured that irrespective of which administration we had, we still wouldnt be getting a fair go.
hell, part of the reason the howard gov. joined the war on terror was becuz of this, and we were still given the short end of the stick.

[Joker85]

actually, the americans were negotiating from a position of power-not exactly what you'd call 'fair'. The protective devices the americans had over their own industries ensured that irrespective of which administration we had, we still wouldnt be getting a fair go.
hell, part of the reason the howard gov. joined the war on terror was becuz of this, and we were still given the short end of the stick.

Um, every negotiation is based, in some form or another, on a position of power.
Both sides have something the other want, or they would not be negotiating in the first place. If one nation has more to bargain with than another, oh well that's life. We get screwed over by OPEC but that's the way it is. If you have cards at the table you play em. If not you don't. No need to whine about it. And if your country truly went to war to gain favor in a trade deal well... not much you can say about that.

[Exarch]

Um, every negotiation is based, in some form or another, on a position of power.
Both sides have something the other want, or they would not be negotiating in the first place. If one nation has more to bargain with than another, oh well that's life. We get screwed over by OPEC but that's the way it is. If you have cards at the table you play em. If not you don't. No need to whine about it. And if your country truly went to war to gain favor in a trade deal well... not much you can say about that.

i just remembered.
when the oil runs out, ppl are going to be looking for the next viable resource, the primary ones being nuclear and solar.
Australia has heaps of uranium deposits.
you guys are going to get raped at the negotiating table next round

[Big War Bird]

Free Trade vs Protectionism are two ideological extremes. No country is perfectly one or the other. Yes the USA promotes the concept of free trade but still protects a few a industries, with agriculture being a big one. Likewise countries that largely practice protectionism are more than willing to take advantage of free trade when they have something to export.

It should be pretty obvious as to why most every country with any agriculture attempts to protect and/or subsidize that industry. No one wants to have to import more food than they have to. A secure domestic food supply is much more important than a secure domestic source of DVD players. Even the most ardent free trading politican (like GWB) has a hard time surrendering the food supply to the free market.

[Thanatos]

I am all for protecting American trade. There's nothing that we can't make here.

[Kiljan Arslan]

Free trade =s a Ivory Tower Idealist's Pipe dream.

[Exarch]

kiljan,
ur government is the champion of 'free trade' policies the world over....but only when it benefits american multinationals at the expense of poorer nations.
America, land of the free indeed.

[Big War Bird]

kiljan,
ur government is the champion of 'free trade' policies the world over....but only when it benefits american multinationals at the expense of poorer nations.
America, land of the free indeed.

Yes lets list some of those poor nations ruthlessly exploited by the USA multinationals

Japan, South Korea, Tiawan, Singapore, Indonesia, China and India. Yes indeed all of those countries are poorer from direct foreign investment from the USA.

People that oppose freer trade do so because they refuse or are unable to see that the short term pains to some eventually give way to huge gains to all in the long run.

[Last Roman]

People that oppose freer trade do so because they refuse or are unable to see that the short term pains to some eventually give way to huge gains to all in the long run.

sometimes give way to huge gains

sometimes


and besides, "in the long run, I am dead"

[Big War Bird]

sometimes give way to huge gains

sometimes


and besides, "in the long run, I am dead"

Care to expand on why you don't think free trade (read more efficient allocation of resources) does not benefit all parties and why you think it takes too long to work?

[Erik]

People that oppose freer trade do so because they refuse or are unable to see that the short term pains to some eventually give way to huge gains to all in the long run.

I oppose free trade for a different reason:
It makes it impossible for a society to impose certain worker benefits and protections, that are more beneficial to society on the long run.

This is because under free trade the company with the fewest benefits/protections for its workers will (almost) always be chosen above a company who had better benefits/protections.

One example is unemployment handouts, which has one huge benefit:
In economic downtimes consumers keep spending, even after loosing their earnings.
This in turn softens recessions (at the cost of slightly less growth during economic upswings), thus stabilizing the economy which is better for the economy on the long run.

Under free trade unemployment handout is impossible because any country imposing it will have to raise taxes and thus won't be able to compete with countries that don't, while the benefits of the measure would be shared by every country.

I think the best situation is free trade only amongst countries that have roughly equal (minimum) wages, working conditions, and economic protection.

About the original post:
It's true that there is a huge difference between what Americans say they stand for and believe in, and what they actually do and know is best.
It's just part of their culture, I guess.

[Ma'ahes]

I oppose free trade for a different reason:
It makes it impossible for a society to impose certain worker benefits and protections, that are more beneficial to society on the long run.

This is because under free trade the company with the fewest benefits/protections for its workers will (almost) always be chosen above a company who had better benefits/protections.

One example is unemployment handouts, which has one huge benefit:
In economic downtimes consumers keep spending, even after loosing their earnings.
This in turn softens recessions (at the cost of slightly less growth during economic upswings), thus stabilizing the economy which is better for the economy on the long run.

Under free trade unemployment handout is impossible because any country imposing it will have to raise taxes and thus won't be able to compete with countries that don't, while the benefits of the measure would be shared by every country.

I think the best situation is free trade only amongst countries that have roughly equal (minimum) wages, working conditions, and economic protection.

Yeah, I'm going to have to disagree with pretty much everything that you said there Erik.

For one, I'm not following your logic on w/ free trade in order to give unemployment handouts, the gov't will have to raise taxes. This would be identical to a country that has a protective trade (aka non-free trade). In fact, the only things that would dramatically change the jobs market would be costs of production, i.e. wages, technology, etc. There are many others, of course. So, as we see in the US, while there is already a comparative advantage in agriculture due to the large abundance of land, there are still subsidiaries (aka gov't handouts) that allow US corporations to unfairly compete in the world market. This is the same as the handouts you describe, save they are in effect until retracted.

And contrary to the "race to the bottom" you have described, we haven't seen such a race even with NAFTA. This is because while there may be lower wages in other countries (Mexico, for example), there simply is higher production from US firms. True, some relocated, but not as much as one would think. Plus, many countries in the global south do not have the infrastructure to take all those jobs away.

Besides, what we see is that rich countries generally trade with rich countries, so they do in fact trade with countries similar to themselves.

Economics FTW!