One among many problems with the neo-liberal "open markets raises all
boats" theory is that while jobs are lost in real time, standards of
living are increased in "economists'" time which could be short term but
is usually medium or long term (or never term given that there are always
exogenous factors that intervene that don't quite fit into the economists'
supply curves...
And of course as Keynes most famously said "in the long run...
MG
> Arthur,
>
> If the Democrats in America can't decide on free trade or otherwise, then
> tough luck on them, because customers will decide for them sooner or later
> by buying cheaper goods made abroad and avoiding costlier home-made goods.
>
> If it's sooner, then the out-of-work factory (and some service) workers
> will concentrate government's mind on reforming the education of its
> children. If it's later, then the factories (and some other services) will
> be forever inefficient compared with those in other countries and the
> general standard of living will go down. And then the factory (etc)
> workers
> will be out of work a litte later anyway. The general standard of living
> could remain down forever from then onwards when one considers the rate of
> technological change and the new skills required.)
>
> If a country wants to engage then its government should ensure the best
> possible education for its children, outlaw protective practices in all
> trades and professions (and publicise all past formal credentialising
> examinations). In this way, everybody will have as interesting jobs as
> they
> are capable of and shorter working weeks and more leisure time will
> gradually become the norm.
>
> Keith Hudson
>
> At 20:40 07/12/2006 -0500, you wrote:
>
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>>----------
>>From: Strategic Forecasting, Inc. [mailto:[EMAIL PROTECTED]
>>Sent: Thu 12/7/2006 7:28 PM
>>To: Subject: Stratfor Public Policy Intelligence Report
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>>PUBLIC POLICY INTELLIGENCE REPORT
>>12.07.2006
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>>Free Trade and the Democratic Party
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>By Bart Mongoven
>>
>>The U.S. Congress reached an agreement Dec. 7 on granting permanent
>> normal
>>trade relations (PNTR) status to Vietnam. Barring a surprise procedural
>> or
>>scheduling change, the agreement sets the stage for a final vote Dec. 8
>>that would signal congressional acceptance of the Bush administration's
>>support for Vietnam's accession to the World Trade Organization (WTO),
>> and
>>paves the way for U.S. businesses to begin to take advantage of that
>> entry.
>>
>>However, the agreement also highlights fractures within the Democratic
>>Party over trade issues: Most Democrats in Congress opposed the Vietnam
>>deal, but the party's congressional leaders are mostly free-traders who
>>support it. Compounding the confusion, there no longer is a clear gauge
>> as
>>to where the party's traditional constituencies -- labor unions and
>>environmentalists -- stand on trade issues. Traditionally, they could be
>>counted as staunch opponents of free trade agreements (FTAs), but many
>>within those camps have begun to reconsider their positions.
>>
>>Nevertheless, the Democratic Party holds an advantageous position on
>> trade
>>issues -- for now.
>>
>>The fact that the party is at a loss as to how to reconcile deeply
>>entrenched, opposing viewpoints into a unified strategy will not
>>constitute much of a political weakness during the final two years of the
>>Bush presidency. Because trade is managed mostly by the executive branch,
>>the party can de-emphasize the need for a unified policy during that time
>>and instead run a highly politicized opposition to whatever the
>>administration wants or does on trade issues. As with the
>><http://www.stratfor.com/products/premium/read_article.php?id=279762>war
>>issue during the election campaign, the Democrats are likely to find
>>strength not in offering constructive alternatives but in arguing that
>>they would have struck a "better" deal than the Bush administration on
>>specific trade issues. The lesson of the November elections, for the
>>Democrats, was that failure does not always stem from an inability to
>>promote a positive message. Instead, they have learned to weigh the
>>benefits of a positive, substantive message against its potential costs
>> --
>>the widening of ideological rifts within the party's base. Thus, on
>> trade,
>>the party has chosen not to stake out a clear position.
>>
>>Trade Issues and Democratic Factions
>>
>>Trade issues occupy an interesting place in American politics -- which is
>>exemplified by the fact that the most easily identifiable opponents to
>>FTAs are right-wing journalist Pat Buchanan and consumer activist Ralph
>>Nader. In truth, neither Republicans nor Democrats own the issue.
>>Republicans generally are more supportive of free trade, but it is by no
>>means a Republican issue: Bill Clinton, a Democrat, worked tirelessly for
>>free trade laws in the face of alternating Republican and Democratic
>>opposition. Incoming House Ways and Means Committee Chairman Charlie
>>Rangel, D-N.Y., is an ardent supporter of free trade, as are most of the
>>emerging presidential hopefuls from the Democratic Party.
>>
>>Opposition to free trade, meanwhile, encompasses populist, right-wing
>>Republicans and the so-called "Seattle Coalition" -- a combination of
>>radicals, environmentalists and organized labor that emerged in
>>demonstrations outside the 1999 WTO Ministerial Conference in Seattle.
>>
>>But even among the subgroups of the Seattle Coalition, fissures are
>>becoming evident. Ideological radicals aside, reflexive opposition to
>> free
>>trade laws is giving way to a more nuanced view among both labor
>> activists
>>and environmentalists. For instance, large segments of organized labor in
>>the United States no longer have a vested interest in outsourcing or the
>>competitiveness of manufacturing. And much of the environmental movement
>>realizes that more damage is being done to the earth in places where
>>Western protection standards are not imposed than there would be
>> otherwise.
>>
>>More than any other subgroup in American politics, organized labor is
>>considered to be the clearest opponent of free trade agreements. Still,
>>even within labor, the issue is complex, as many union leaders devise
>><http://www.stratfor.com/products/premium/read_article.php?id=252642>str
ategies
>>to bolster membership -- strategies that either do not rely on opposition
>>to free trade or perhaps allow them to favor a modified version of it. Of
>>course, textile workers, autoworkers and dozens of other manufacturing
>>unions have a clear self-interest in stopping foreign competitors from
>>siphoning off market share, and manufacturing jobs with it, from U.S.
>>companies. But for a significant (and growing) segment of labor union
>>members -- government workers and service industries -- foreign job
>>competition is not a realistic fear. Janitors, for example, cannot be
>>off-shored. For these workers, free trade is an ideological question,
>>rather than one of clear self-interest. Politically active union members
>>from all industries still retain the longstanding view that FTAs benefit
>>management and shareholders, but not workers. The heat of that argument
>> is
>>dissipating, however, as the downside of FTAs (erosion of U.S.
>>manufacturing jobs) is mitigated by the upsides (a still-robust economy
>>with low inflation and low unemployment).
>>
>>The shift within the labor movement is eloquently expressed by labor's
>>silence over Vietnam's PNTR status. The issue does not figure prominently
>>on the Web sites or in the press statements of any of the major unions.
>>For the most part, it does not appear at all. Certainly, labor's
>>leadership cares about the issue and it is actively trying to ensure as
>>much protection for American union jobs as possible, but it is no longer
>>serving as a rallying point for labor. Further, the lack of public
>>attention to the issue indicates that leadership does not believe the
>>issue helps in boosting union membership or in organizing new companies
>> or
>>industries.
>>
>>A similar shift has occurred among environmentalists. Large numbers of
>>environmentalists in the United States view FTAs as facilitating the
>>manufacture of consumer goods in developing countries under inadequate
>>environmental standards, and therefore traditionally have fought FTAs,
>>saying they are damaging to the environment. If the status quo were to be
>>maintained -- which is to say that countries such as China, India and
>>Vietnam would remain poor and barred from free trade deals with large
>>consumer economies -- that opposition would easily hold. But the status
>>quo is not being maintained: With the economic growth of developing
>>countries, industrialization became inevitable. Now, environmentalists
>> are
>>starting to realize that there is a great deal of power to be developed
>> in
>>the rules attached to trade agreements -- rules that can create a
>>relatively strong regulatory environment in countries where oversight has
>>been weak. Furthermore, even where rules are not applied in trade
>>agreements or enforced by governments, increased trade flows between
>>industrialized countries and poorer ones results in pressure --
>>transmitted particularly through the supply chains of well-known Western
>>companies -- on manufacturers in poor countries to meet certain
>> standards.
>>
>>The Democrats' Approach
>>
>>For the Democrats, then, a clear policy is becoming more and more
>>difficult to develop. The party's two solid anti-free trade
>> constituencies
>>are increasingly ambivalent, and the party leadership is equally split or
>>trending toward an endorsement of FTAs. Clearly, the Democrats will not
>>constitute a rubber-stamp veto on FTAs under the new Congress.
>>
>>But the real difficulties for the party's leadership will come when the
>>president's "fast-track" negotiating authority runs out June 30. Fast
>>track allows the U.S. trade representative (USTR) to negotiate trade
>>agreements, with the knowledge that Congress will have to give an up or
>>down vote on the entire agreement in the end. By giving the president
>>fast-track authority, Congress denies itself the ability to add riders or
>>amendments to the trade agreement. Until now, fast track has been deemed
>>almost a necessity: Foreign governments are not eager to negotiate and
>>come to an agreement with the executive branch only to have more demands
>>thrust on them by Congress. Not only does this make trade deals a more
>>time-consuming process, but it places the foreign country at a severe
>>disadvantage as the country tries to negotiate with or anticipate the
>>demands of the legislative and executive branches simultaneously. Without
>>fast track, no new trade agreements are likely during the president's
>>remaining time in office.
>>
>>This is just fine from the point of view of most Democrats, and fast
>> track
>>will almost certainly run out in June 2007. But at that point, the
>>Democratic leaders in Congress must determine how much authority they are
>>willing to give the president -- whether it is Bush or his successor. And
>>that is when the fissures now emerging within the party over trade issues
>>could become a serious detriment.
>>
>>The chief issue is this: The Democrats' main strategic objective for the
>>next two years is to build a unified national party. To do this, the
>> party
>>is seeking to define a values set upon which Americans agree, and which
>>can clearly define the Democratic Party in the future. At the center of
>>this strategy is a push for policies on health care, minimum wage, a
>>Clintonian foreign policy characterized by reflexive internationalism and
>>market-based environmental protection -- or, in other words, building
>>unity through an emphasis on issues that all Democratic constituencies
>> can
>>support.
>>
>>Free trade, like the war in Iraq, presents a number of complications in
>>this strategy. The traditional Democratic response -- opposition to the
>>war and opposition to free trade -- does not fit with the new strategy.
>>Because the issue does not serve the party's larger
>><http://www.stratfor.com/products/premium/read_article.php?id=272174>uni
fication
>>strategy, the response to trade issues appears likely to mimic the
>>Democrats' war position: "We aren't necessarily against free trade, but
>> we
>>would definitely do it better than the Bush administration has." The
>>rhetoric will emerge as a call for "fair trade," meaning that many of the
>>liberal values of the industrialized economies -- environmental
>>protection, the right to organize, prohibitions of child labor and so
>>forth -- are embedded in all trade agreements. Through this approach, the
>>party can promote something positive (protections) without staking out a
>>clear stance in opposition to free trade.
>>
>>As attractive as this idea may be in theory, the ugliness will appear in
>>practice. The battle to define what is acceptable and what is not will
>>inevitably tilt the Democrats in one direction or the other. For
>> instance,
>>if the "fair trade" demands are realistic, the party will have chosen to
>>accept FTAs and tacitly endorsed free trade. If the demands are onerous
>>and ultimately prevent the USTR from being able to successfully negotiate
>>a treaty, the party will have chosen protectionism. Either way, in
>>crafting a law, the party will have to choose -- and, as with the war, it
>>is highly unlikely to want to do that.
>>
>>Send questions or comments on this article to
>><mailto:[EMAIL PROTECTED]>[EMAIL PROTECTED]
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> Keith Hudson, Bath, England, <www.evolutionary-economics.org>
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