Free trade vs Fair trade

[Ron]

For most of my adult life my free trade credentials were impeccable.

Pretty much a libertarian right down the line. Open markets and unhindered movement in the labor markets all the way. Yes, I was an open borders guy up until a few years ago.

When Pat Buchanan went off the reservation on trade I no longer considered him a "true" conservative.

Like the typical idealistic libertarian and neocon coming of age in the '80's I took the side of business over government and unions every time, reflexively.

Over these last few years I've become increasingly anti-globalist and as a result I find myself being more and more anti big business and more and more nationalist in my outlook.

Where do "we" fall in the spectrum here at APS? Is this place dominated by doctrinaire free trade proponents?

Or does it make sense to nurture a more nationalistic economy even at the expense of some efficiency and cost?   

[griz]

My default has also been free (in almost all things, not just trade).  So I clicked that.  Yes, I want trade to be fair.  But there is no fair fairy out there, so in reality you get government controlled trade.  I just don't have faith in any .Gov, my own included, to do a better job than the free market.  I supposed I could have voted "nuanced" since I don't think we should allow sales of weapons to our enemies for instance, but I didn't get the impression that you were talking about that kind of thing.

[TommyGunn]

To a degree I agree with Trump when he says that we've been stupid with regards to many trade agreements in the recent past.  In general, I like to think free trade is a good idea.
Some regulation may be a good idea ... but if we're not careful, it backfires.  Many people recall the "Smoot-Hawley" Tariffs back in the 30s.  We imposed a tariff, designed to "protect" our businesses, but *SHAZAM* other countries retaliated by doing the same thing to what we imported into their countries, and thus slowed commerce down, thus making the depression that was being experienced so much  worse.
We need to be careful that we don't repeat that error and stimulate yet another trade war, which neither side wins.
This is one area where I think Trump is on particularly thin ice.   Maybe his experience in foreign countries will be a positive and help, but the way he talks .....   makes me very, very nervous.

[HankB]

The perception is that while we allow free access to our markets, other countries - the same ones that ship boatloads of cr@p to our market from overseas - have barriers to our exports. Years ago, it was Jap cars exported to the USA, but their market was closed to many US exports, most notably rice. After years of increasing friction, Japan, Inc., addressed this by building factories and such in the USA, so you can now buy a Jap car designed in California, engineered in Michigan, and built in Kentucky, mostly by US workers and mostly with US-sourced parts. We still have a lot of Jap cars on the roads, but they're not actually imports for the most part.

We have similar issues today with other countries, especially (but not exclusively) China; as I understand it, Trump wants their markets to be as open to US products as ours are to theirs. (China manipulates its currency too, which is a related issue.)

[roo_ster]

TG:

I suggest you look at the proportion of America's GDP that was due to exports before "Smoot-Hawley."  Then assume that proportion completely went away.  I think you will be underwhelmed and scratching your head, wondering how folk could honestly claim that bitty drab of the GDP could send our economy into a tailspin.

Similar to the "without illegal aliens our economy will crater and you'll pay $10/head of lettuce."  Illegals just plain don't produce enough of the GDP to worry about.  Their contribution is subsumed by rounding errors.

[TommyGunn]

TG:

I suggest you look at the proportion of America's GDP that was due to exports before "Smoot-Hawley."  Then assume that proportion completely went away.  I think you will be underwhelmed and scratching your head, wondering how folk could honestly claim that bitty drab of the GDP could send our economy into a tailspin.

Similar to the "without illegal aliens our economy will crater and you'll pay $10/head of lettuce."  Illegals just plain don't produce enough of the GDP to worry about.  Their contribution is subsumed by rounding errors.

Well, perhaps, but other historians and economists have claimed it did provoke a trade war and slow things down. As I recall we were already IN a depression when Smoot Hawley hit and hurting; the tariff didn't "send us into a tailspin," we were already in one, it only made it worse.
 There were other trade regulations before Smoot Hawley that also had some affect on the economy as well.

[Perd Hapley]

I reject the dichotomy.

Free trade means free trade, just like laissez faire means laissez faire - it doesn't mean the rule of law no longer applies to the wealthy. It doesn't mean rich people get to do anything they want, or that corporations take over your government. If that is happening, then your problem lies elsewhere than with so innocuous a concept as free trade.

[MechAg94]

Well, perhaps, but other historians and economists have claimed it did provoke a trade war and slow things down. As I recall we were already IN a depression when Smoot Hawley hit and hurting; the tariff didn't "send us into a tailspin," we were already in one, it only made it worse.
 There were other trade regulations before Smoot Hawley that also had some affect on the economy as well.

I am sure the Marxist govt concepts that Roosevelt was implementing didn't help either. 

[TommyGunn]

I am sure the Marxist govt concepts that Roosevelt was implementing didn't help either.  

In a video documentary I have on FDR's presidency, the narrator stated that as the depression wore on, the administration grew more and more frustrated, 'no one in FDR's cabinet had any idea how to get the country out of the depression,'  is pretty close to what I recall.
Some of what FDR did was beneficial; the Tennessee Valley Authority and it's related dams and projects ameliorated seasonal flooding,  saved many lives, and provided electricity to thousands who previously lacked it.
But, overall, the ABC Agencies did nothing to ameliorate the Great Depression.
So much for "shovel ready jobs."

[Hawkmoon]

I'm 72 years old. I have never understood economics. My younger brother was an Economics major -- I wasn't. Even in the days of high school and college I wondered how the U.S. (or any country) could always have an increasing Gross National Product. I was, of course, thinking in nationalistic terms -- if in year Y we produced 5% more refrigerators than we did in year X, but the population hadn't increased by 5% -- who was going to buy all those refrigerators?

But that was back in the days when we actually manufactured things in the U.S. I didn't foresee the day that major "U.S." corporations would put Americans out of work and move the jobs to countries like Mexico, Taiwan, Korea, and then China -- where the average worker is paid only a tiny fraction of what a U.S. worker would be paid for doing the same job. We can't compete against slave labor -- we did away with slavery a century and a half ago.

So I am of the opinion that the playing field needs to be leveled. That can't happen under "free trade," because the jobs will always go where the workers are taken advantage of the most.

[Ron]

I reject the dichotomy.

Free trade means free trade, just like laissez faire means laissez faire - it doesn't mean the rule of law no longer applies to the wealthy. It doesn't mean rich people get to do anything they want, or that corporations take over your government. If that is happening, then your problem lies elsewhere than with so innocuous a concept as free trade.

So you are in favor of fair trade, got it.

[BlueStarLizzard]

Because this thread made me curious, I went looking stuff up, since I don't really know anything about anything discussed here and...

I think the wrong terms are being used because Fair Trade is https://en.wikipedia.org/wiki/Fair_trade, which would concerns 1st world country's trade with 3rd world and protecting the interests of the 3rd world country.
And some of you'll seemed to be talking more about https://en.wikipedia.org/wiki/Protectionism which would be government sanctions to protect the country's trade interests.

So now I'm just confused, because I don't know what you'll are talking about 

[Ron]

Well before the hippies took the term over it meant policing trade deals so they didn't have a destructive impact on our manufacturers.  

Protectionism is used as a pejorative mostly.

[De Selby]

Trade that is in the interests of the people who elect trade policy makers is what I'd like to see.  Whatever it is called, it should result in better wages and living standards for Americans.

Trade policy since the 90s has done the opposite.  It has been excellent for the financial industry though

[De Selby]

TG:

I suggest you look at the proportion of America's GDP that was due to exports before "Smoot-Hawley."  Then assume that proportion completely went away.  I think you will be underwhelmed and scratching your head, wondering how folk could honestly claim that bitty drab of the GDP could send our economy into a tailspin.

Similar to the "without illegal aliens our economy will crater and you'll pay $10/head of lettuce."  Illegals just plain don't produce enough of the GDP to worry about.  Their contribution is subsumed by rounding errors.

I love th argument for illegal profits.  On this theory we should be sending buses down to the border and shipping them in, and then when Mexico empties out we can send ships to China for all the goodness to continue.

How could we possibly lose?

[Hawkmoon]

There's also the factor that illegal aliens who are working (illegally) tend to send a large percentage of their earnings back to family in their home country. Most of you know that Western Union does international money transfers. For most countries, there's a single form that's used. However, for Mexico, they have a special form, printed in Spanish, called "Dinero en Minuto" ("Money in a Minute").

I'm pretty certain Western Union wouldn't have bothered creating a special form if they didn't think people were going to use it.

So, in addition to taking jobs away from citizens and lawful residents, and driving down wage rates, the illegals are also sucking money out of the U.S. economy and shipping it off to help the economy of their native countries.

[Ron]

Because this thread made me curious, I went looking stuff up, since I don't really know anything about anything discussed here and...

I think the wrong terms are being used because Fair Trade is https://en.wikipedia.org/wiki/Fair_trade, which would concerns 1st world country's trade with 3rd world and protecting the interests of the 3rd world country.
And some of you'll seemed to be talking more about https://en.wikipedia.org/wiki/Protectionism which would be government sanctions to protect the country's trade interests.

So now I'm just confused, because I don't know what you'll are talking about  

I think all of us here default to free trade automatically. Here is an article by Buchanan that advocates what Trump has been calling fair trade or making better trade deals.

http://buchanan.org/blog/trump-is-right-on-trade-124822

In many ways what we have been sold under the guise of "free trade" is a system that empowers international corporations and a finance system that has no loyalty to any nation.

They don't have OUR nations best interests in mind.

Many of us are doing well under this system but many are not. Things are not getting better currently and we are heavily dependent on countries that act more like adversaries than allies.

   

[French G.]

There's also the factor that illegal aliens who are working (illegally) tend to send a large percentage of their earnings back to family in their home country. Most of you know that Western Union does international money transfers. For most countries, there's a single form that's used. However, for Mexico, they have a special form, printed in Spanish, called "Dinero en Minuto" ("Money in a Minute").

I'm pretty certain Western Union wouldn't have bothered creating a special form if they didn't think people were going to use it.

So, in addition to taking jobs away from citizens and lawful residents, and driving down wage rates, the illegals are also sucking money out of the U.S. economy and shipping it off to help the economy of their native countries.

Remittance is a significant part of Mexico's  GDP.

[wmenorr67]

First you need to define free vs fair.

[Ron]

First you need to define free vs fair.

True

The article from Buchanan identifies what I meant by "fair trade".



Here is a random article from FEE, The Foundation for Economic Freedom about our "Free trade" that they rightly call managed trade.

https://fee.org/articles/the-west-is-turning-against-free-trade-again/

Maybe the question should have been:

Who do we want to manage our trade?

1-The globalists who currently are in charge.

2- Nationalists who are more concerned with American workers than global concerns.

[Perd Hapley]

Who do we want to manage our trade?

1-The globalists who currently are in charge.

2- Nationalists who are more concerned with American workers than global concerns.

I'm sorry, but as one of the workers, that second option sounds too much like "We're from the government, and we're here to help."

[Pb]

I'm anti big business corrupting our government (crony capitalism) and that's one reason I am for free trade and low tarriffs.

[Ron]

Absolute free trade doesn't exist at the global level, all trade is currently managed by someone.

The question is, to whose benefit?

[RevDisk]

Trade that is in the interests of the people who elect trade policy makers is what I'd like to see.  Whatever it is called, it should result in better wages and living standards for Americans.

Trade policy since the 90s has done the opposite.  It has been excellent for the financial industry though

Our trade policies admittedly have helped the world. Global poverty rates have greatly fallen. It's not entirely due to essentially America outsourcing labor, production, etc abroad but it is certainly part of it. I'm fond of free trade. However, we have 'free trade' where it is free on our part but highly protectionist on the other parties. India and China are the largest examples. Good luck importing ANYTHING into India without extreme tariffs to block foreign imports. With Europe, we have a significant disadvantage because of ITAR for anything tech related but otherwise it's not terrible. ITAR is our own fault and we have no one else to blame for that stupidity.

As De Selby says, it's been this way since the 90's. It's certainly benefited certain individuals, but not the US as a whole. Free or free ish trade is a necessity for the world economy to run properly. But it's incredibly stupid to play in a stacked game, which we currently are. Tariffs should be matched. If country X puts tariffs on our imports, we should put the same amount on their exports.

[Balog]

I'm sorry, but as one of the workers, that second option sounds too much like "We're from the government, and we're here to help."

Speaking of false dichotomies...

There is no free trade. It's a myth that does not exist in the natural world. All of these so called "free trade" deals are just choosing to let globalist bureaucrats who hate America dictate the conditions.