| JDogg | Date: Saturday, 2012-12-29, 4:10 PM | Message # 1 |
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Private
Group: Administrators
Messages: 8
Status: Offline
| What has happened as of Dec 21st 2012? 
Our government must reexamine our involvement in organizations like the WTO, formerly known as GATT. GATT was established in 1948 in cooperation with the UN to help rebuild a devastated Europe and Asia following World War II.
Prior to GATT, domestic policies were aimed at fostering growth and protecting our core industries. Tariffs and restrictions prevented foreign subsidized companies and governments from disarming our industries through predatory pricing, dumping and buyouts. The rest of the world marveled with envy at the assets we had collected through our policies. They sought to establish “free trade” that would allow them to access our markets and allow access to the wealth we had achieved.
Though this practice was effective in restoring and rehabilitating Europe and Asia, we have allowed these practices to run amok and to continue unchecked to present day at the expense of our sovereignty, regardless even of its potential detriment to national security. Specifically, Congress cannot legally pass laws that violate WTO bylaws even if such laws are necessary to ensure the safety of America.
Conditions in 1948 were very different from today. Following WWII, our domestic industries had little competition from abroad because of the destruction that had taken place in Europe and Asia. Free trade policies would have had little impact. Today, our foreign competitors are fully capable of fending for themselves and we have little practical reason for maintaining free trade practices except to maintain U.S. consumption at great expense to our long-term ability to compete. Freedom and “free trade” inexorably come at a price.
New sources of capital and innovation in the Far East coupled with telecommunication and computer technology effectively nullify the arguments for comparative advantage upon which free traders have long held their hat. David Ricardo’s comparative advantage principles penned in the early 1800s rely on the notion that factors of production are not mobile. In his theory, each nation has an advantage that cannot be shifted to another nation. In practice, modern day factors of production are in a sense very mobile. Technology can be outsourced and management talent can be acquired and moved. The only advantage a nation can develop today is in capital infrastructure proprietary processes and equipment that are nailed down to the ground and must be guarded as priceless trade secrets.
Today our involvement with the WTO limits what Congress can legally legislate in terms of our industrial policies. The WTO is a restriction on our sovereignty, and for what? The WTO is set up so that each member country has one vote and there are no veto powers. Therefore, the U.S. is on equal footing with every developing country seeking to gain access to our market.
Furthermore, other countries have discovered ways to circumvent the WTO rulings in their favor. For example, China (which retains a highly protective trade stance) is a major vehicle through which Japan is able to tilt the field in their favor. In other words, countries like Japan are exporting to China and then China is exporting to the U.S.–effectively bypassing any WTO sponsored trade agreements between Japan and the U.S.
Agreements like NAFTA and CAFTA provide unprecedented access for foreign companies to access U.S markets. They need only export their raw goods to Mexico, assemble them there, and then drive them across the border to the U.S. duty free. NAFTA and CAFTA are unmitigated disasters. We are allowing Mexico and Central America to export to America without restriction.
The problem is that the combined GDP of all the CAFTA countries is less than that of a single state in the U.S. In other words, if the U.S. were to capture the entire market of all CAFTA countries in exchange, it would only add a fraction of a percent to our GDP while simultaneously allowing foreign corporations a vehicle to have direct access to our markets totally unfettered.
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