Trade

Written by: Elizabeth Cable on Feb 4, 2008 2:10 AM EST

Trade is an issue which, relative to more prominent issues, many do not feel strongly about. It is an issue upon which the mainstream candidates from each of the major parties agree, so it can not be used as an issue to inflame voters with partisanship and get them to go to the polls to vote against the opposition party. Trade is quite unlike the issues of abortion, or gay marriage, or the War in Iraq, in that respect. However, I believe that Trade is a very important issue which affects all of our lives here in the United States on a daily basis. Specifically, whether the United States assumes the policies of Free Trade or of Fair Trade.

Free Trade between countries is essentially when there are no restrictions whatsoever at their borders when it comes to trade. There are no tariffs, regulations, fees, etcetera. With Free Trade, trade is free and open between countries, and companies are allowed to ship their products across the border at very little cost. The argument for this is that it will raise the economic level of countries on both sides of the border. On the other side of the coin, there is Fair Trade. Fair Trade is basically the opposite of Free Trade. In Fair Trade, there are tariffs and regulations at the border. Trade is not open and free between countries. The argument for Fair Trade is that it will protect the workers on both sides of the border.

(Click Read More for the rest of this post) 

Under Bill Clinton in the 1990s, we had Free Trade policies. During his terms in office, the NAFTA Treaty, between the United States, Mexico, and Canada, was signed, and it has created one of the largest Free Trade zones in the World. The purpose of NAFTA is to raise the economic level of the lesser economies (Mexico), by allowing them to participate in and benefit from the greater economies (United States). In this way, the total bloc of North America would be made more powerful economically. Currently, under George W. Bush, we have Free Trade policies. Bush has followed Clinton’s example concerning Trade. Both parties, Republican and Democratic, are in favor of Free Trade policies. All of the 2008 Presidential candidates, Republican and Democratic, are in favor of Free Trade, except for Mike Gravel and Ron Paul. So, Obama, Clinton, McCain, Romney, and Huckabee are all in support of Free Trade. Many ordinary Democrats and Republicans simply acquiesce in agreement in favor of Free Trade, for the reason that the leaders of their respective parties are in favor of it.

However, after some thought and discussion about the issue, I find myself very strongly opposed to Free Trade and very much in favor of Fair Trade. I will use NAFTA as an example. Specifically, the effect that NAFTA has upon the United States, Mexico, and workers from both countries. 

Mexico imports 75% of its agricultural products from the United States. Because of Free Trade policies and NAFTA, it is cheaper to import the products than it is to just grow them in Mexico. There are no tariffs and trade restrictions, so it is very cheap to just buy the products from the U.S. and ship them across the border, compared to the greater cost of growing the products in Mexico. The result of less agricultural products being grown in Mexico is that Mexican agricultural workers lose their jobs. I should think that that certainly wouldn’t help Mexico’s economy. These Mexicans who have lost their agricultural jobs in Mexico then have to go to the United States to find work. As the jobs move to the United States, the workers have no choice but to move to the United States. This most certainly contributes to the illegal immigration “problem” in the United States, making Free Trade a concern to those who are advocating in favor of securing our borders. I think that if we had Free Trade rather than Fair Trade policies, and if there were tariffs at the border, Mexico would find it more beneficial to just grow the agricultural products in Mexico, and many Mexican agricultural workers would keep their jobs.

Of course, Free Trade between the United States and Mexico certainly doesn’t solely affect Mexico and Mexican workers. On the other side of the equation, the United States loses manufacturing jobs, due to Free Trade. American businesses ship the manufacturing jobs to Mexico for, in my mind, two main reasons: because (1) the workers in Mexico can be paid much less to do the same job and, plus, (2) there are no tariffs and restrictions due to Free Trade, so businesses can ship products across the border (to the United States) at no cost to them and still sell their products to American consumers (at a greater profit to the businesses). It’s a pretty sweet deal for those businesses who outsource jobs to Mexico. Maybe it wouldn’t be such an incentive to outsource jobs if we had some tariffs at the border that the businesses had to pay. The way it is set up now, wih Free Trade, outsourcing is doubly beneficial to the businesses who choose to outsource. Do we really want to encourage outsourcing of American jobs in this fashion? Wouldn’t it be better if we had some tariffs and restrictions on business and trade, in order to protect both American and Mexican workers?

From my point of view, from my perspective, it seems like we should put Fair Trade policies in place, rather than Free Trade policies. The economy of Mexico could better develop if the jobs were kept in Mexico, and the economy of the United States could better develop if the jobs were kept in the United States, in my opinion.

And I have been trying to determine why politicians from both parties, Democratic and Republican, are both very supportive of Free Trade policies and why few are supportive of Fair Trade policies and of protecting the worker. My ultimate conclusion was that politicians from both parties support Free Trade for the same reason that they support our corrupt income tax system: it helps the rich citizens and big corporations who fund their political campaigns.

Tags: