Bill R. says: >Yoshie Furuhashi wrote: > > Protecting a severely uncompetitive industry must cost money. > >If you mean it costs the government money - not in the short run >anyway. On the >contrary, it provides a few hundred million dollars in tariff income, plus >income taxes and the like. The standard trade analysis says it costs consumers >money (assuming retailers will reduce prices when tariffs are cut), >but ignores >workers' loss of income if their jobs go and they can't find other work at >similar pay. In the long run, IF there were more productive industry >that could >replace it, then there is an opportunity cost in maintaining TCF, but that is >the crucial "if" which we are debating when we debate trade theory, isn't it? > >> Can't >> you abolish tariffs on textile, clothing, and footwear and spend the >> saving on education, income maintenance, & job creation for displaced >> workers? If the saving is not enough, you can cut foreign aid also. > >There are large amounts spent on education, income maintenance, and >job creation >for displaced workers (there could always be more of course), but it doesn't >create sufficient permanent jobs, even less does it create well paying ones in >the right regions.
I got the following info from the Internet: ***** TEXTILE WORKERS WARY OF TARIFF-CUT OUTLOOK While all eyes before Christmas were on the tariff cuts affecting the car assembly industry, hundreds of employees in the clothing, textile, footwear and carpet industries were also watching the tariff axe hovering over their own heads. Manufacturers fear that the government's determination to cut tariffs to 15% by 2000 will just as seriously affect the job prospects of the 25,000 people directly or indirectly working in the textile sector. Apparel and Textile federation chief executive Marcia Dunnett predicts that at least half the jobs and business will go if the government took the same approach as for cars and rapidly moved to zero tariffs between 2000 and 2002. The Minister of Commerce John Luxton is said to favour a more rapid reduction of the tariffs. The whole sector is waiting for the current review of tariffs by the government, which will be completed in March and announced in May. What is at stake here? James Gardiner reports in the New Zealand Herald that the textile sector employs 10% of our industrial workforce. The sector achieves sales of $2.5 billion, of which exports amount to $0.5 billion. Women make up 74% of the employees in this sector, and 32% of the employees are Maori, Pacific Islanders, or Asian. The cost to consumers of retail import duty amounts to about $1.50 for each item of general clothing. For a t-shirt it is about 50c, for a pair of briefs about 15c, and $2 for each pair of shoes. Source -- New Zealand Herald 20 December 1997 "Industries shudder at tariff-cut outlook" by James Gardiner <http://www.jobsletter.org.nz/jbl07100.htm> ***** As you noted, the tariff reduction has taken its toll, and now workers in the NZ textile sector are about 20,000, but retail import duties do cost NZ consumers, though not very much, according to the above figures (which I assume are in New Zealand dollars). The NZ labor force is about 1.88 million, so the NZ textile workers are about 1% of the labor force. New Zealand spent US$116 million on official development assistance in 2000 (from <http://www.globalissues.org/TradeRelated/Debt/USAid.asp>). Is that about NZ$279 million? Can't we make an argument that "New Zealand spends millions of dollars on protecting 1% of the labor force by paying import duties on textile, and NZ also spends $279 million in foreign aid to developing nations who would need less of it if they could develop their domestic industries (first of all textile) by gaining a better market access to NZ and other rich markets. Let us cut tariffs and foreign aid and spend the savings on education, job creation, and income maintenance for displaced workers, as well as on development of sustainable industrial policy. At the same time, let us take global leadership in debt cancellation for Third World nations (as we did in nuclear disarmament), so they may re-develop their economies and buy what we could sell them"? -- Yoshie * Calendar of Anti-War Events in Columbus: <http://www.osu.edu/students/sif/calendar.html> * Anti-War Activist Resources: <http://www.osu.edu/students/sif/activist.html> * Student International Forum: <http://www.osu.edu/students/sif/> * Committee for Justice in Palestine: <http://www.osu.edu/students/CJP/>
