Anti-Globalization Will "Eat Our Lunch"

Discussion in 'Economics' started by ShoeshineBoy, Jun 9, 2008.

  1. Here's yet another example of how anti-globalist sentiment is going to hurt our economy:

    Canada Eats Our Trade Lunch
    By INVESTOR'S BUSINESS DAILY | Posted Thursday, June 05, 2008 4:20 PM PT

    Competitiveness: As Congress gloats over its denial of free trade to Colombia, Canada has moved on a free-trade pact of its own that will take U.S. markets.

    Congressional Democrats often speak of restoring U.S. influence in the world. But if they think halting free trade with Colombia will do the trick, they'll be surprised to know that the country whose influence they are extending is our northern neighbor.

    As the proposed U.S.-Colombian trade agreement languishes into its fifth year, Canada is rushing to pass its own pact with the up-and-coming South American nation. And hot on Canada's heels are Russia and the European Union, which also have no intention of blowing an opportunity.

    Under the leadership of Prime Minister Stephen Harper, Canada has its deal nearly done, and parliament will pull no monkeyshines to gum it up. In fact, it may sign off this week, months ahead of its September target, after watching House Speaker Nancy Pelosi derail the U.S. treaty.

    "We have to laud the Canadians for their recognition of self-interest," said John Murphy, vice president for international affairs at the U.S. Chamber of Commerce. "The question is: Why can't we do the same?"

    Once the Canada-Colombia free trade treaty is signed, Canada's influence will rise in one of Latin America's most attractive markets.

    This may sound far-fetched. After all, isn't Canada an insignificant shadow of the U.S.? The short answer is no. Canada is a major U.S. competitor that has figured out how to work similarities and differences with the U.S. to its advantage.

    Like the U.S., Canada enjoys a high standard of living. Per-capita income is $29,000, meaning a large consumer economy and high-value exports. In fact, those fancy exports are uncannily similar to ours.

    Through the North American Free Trade Agreement, the U.S. and Canada are leaders in exports of similar goods, including oil, plastics, machinery, cars and sound equipment (see charts above).

    We even buy and sell them to each other, proving that excelling at comparable goods is no barrier to either country's well-being. In fact, it has made both countries rich.

    But unlike the U.S., Canada appears small, with a population of just 33 million, compared with 300 million in the U.S. — or even Colombia's 44 million.

    Canada's size has given it a different, Asian-tiger-like export orientation, with exports accounting for nearly 40% of its $1.1 trillion GDP. The U.S., by contrast, counts only 11% of its $13 trillion GDP as exports. So, although Canada's economy and population are smaller, it punches well above its weight in export trade.

    This matters when the new trading partner, Colombia, isn't all that big to begin with — and bought $6.7 billion in American goods in 2006, much of it the same stuff Canada and the U.S. sell to each other.

    Colombia could easily substitute the goods it buys from the U.S. with those it could get tariff-free from Canada. In fact, it would be smart to do it. The result will be a Canada that snatches away U.S. markets in Latin America's fourth-biggest economy, one that's expected to spend $30 billion on exports this year.

    The $516 million U.S. corn export market in Colombia is particularly vulnerable, says Murphy, because U.S. farmers may pay tariffs as high as 35% to sell corn there. Canada's farmers will soon pay nothing. Canada's land advantage, meanwhile, enables it to export plenty of corn.

    Pelosi's stalling gives other advantages to Canada, Murphy notes. The fact that the U.S. started on a pact and then stopped, he says, gave Canada more than just a tariff edge.

    It also gave it a time-and-information advantage. U.S. trade officials spent years cataloguing tariffs, mastering laws and negotiating clauses that each side could agree on. This gave Canadians (and Europeans) "a beautiful road map" for their own free trade pacts, Murphy explained.

    In any other country, such a pointless squandering of market share would be cause for alarm. But somehow, Pelosi & Co. imagine that America doesn't compete in the world, that markets don't matter and that the U.S. will always be number one.

    They steep themselves in puritanical righteousness, stalling the Colombia pact over a few crimes being prosecuted by authorities, while American influence and competitiveness wither.

    Colombia isn't going to wait for Pelosi to come to her senses. It'll go ahead and do business with Canada.
  2. piezoe


    What else has been slipped into that trade bill besides the Columbia stuff? Maybe there is a reason beyond the trade issue why congress won't go along.
  3. So you're saying that the USAID program (taxpayer funded) is a good thing when American factories are shut down & disassembled, loaded onto ships and sent to other countries so big business can hire workers there for $0.58/ day which will make that country grow so those $0.58/ day workers can buy a Cadillac made here in the USA? It's not going to happen; that $0.58/ day worker will not earn enough in a lifetime to buy a Cadillac door. As Ross Perot said, it's treason. When the market wrecking employment numbers were released last Friday it was noted "Manufacturing is down again, but that's normal." As our treasonous trade policies build other countries, quality of life degrades in this country. Michigan was the first area to divebomb.

  4. Shoeshine Boy, you really need to listen to Mgookin.

    Not all "Free Trade" is fair trade. Even Ricardo's bedrock theory on free trade and mutual benefit have been questioned in academic circles. Just for the reason Mgookin so eloquently put.

    These foreign markets we export jobs too need DECADES of growth before Developed Countries ever see a return on their dollar in terms of 'buy-back' prices that can support our workers.

    And once China or India are making near-Western wages, what are they going to buy from us that they haven't already made, or in the process of making??? Remember what turned the US into a financial behemoth?

    Big domestic consumption and huge loyalty to national manufacturers. No imports. Just exports.

    China, and to a lesser extent India, enjoy the same building blocks.

    China is heavily invested in aerospace. Already started its own Commercial Airliner fabricator. Thats a huge engineering milestone in terms of proficiency. They've got a nascent auto industry. WHOOPS!! Guess we won't be selling American-made GM's in China! On and on.

    I'm sure they'll start biotech soon enough.

    The only edge America has is Defense. This pipedream we would become a "post industrial" economy of eggheads, engineerings and code writers is pure nonsense.

    Thats Globalist Marketing Tripe used to sell Welfare Economics to Rich Countries.
  5. Ameicans and Canadians and Brits and French and to some extent Germans all see themselves as part of the first world, not the third world,

    trading between those partners was never considered as something of a balance sheet loss nor gain, just a flat transfer.

    so whether there's a heavy relationship between America and Canada its funny how that doesn't seem to rattle anyone here in the US.

    so perhaps your thesis on this thread might need rework....

  6. Take a minute to read this:

    "It must surely be a mistake to adopt an economic policy which makes you rich if you eliminate your national work force and transfer your production abroad, and which bankrupts you if you continue to employ your own people. "
  7. Umm ford has moved most of its production to MEXICO and GM is closing most of the the Canadian plants.

    You are complaining when the horses are already let out of the barn.

    Our economy is toast - get over it already!
  8. Good point...
  9. I'm listening to what you're saying, but I don't buy it. Basically, every American company that sells overseas is going just fine. Serioulsy, look at the recent earnings roll calls. And earnings is what counts around here. Ford is a good example: they're bottom line is improving because of int'l sales. Who would have thought Ford could actually improve?!?

    Btw, Germany with a high dollar is still a powerful exporter. The world doesn't just want cheap: it wants quality, customer service, technology, creativity. Ourselves, Germany and some of the Asian countries provide those. We have nothing to worry about. We just have to adjust during this time of transition.

    Again, look at the recent earnings calls...

    Well, maybe not every, but close to it. It's America that is the primary beneficiary. It's just a scary adjustment period for us...
  10. Maria Bartiromo: Senator McCain - what do you say to American workers whose jobs are sent offshore to China and other places?

    Senator McCain: I'd tell them that it's good for America. We need to get our community colleges to educate these workers...

    So that idiot wants to take a 58 year old laid off UAW worker who made $65k/ year and teach him to type while his home is foreclosed on while he learns to type so he can make $16k/ year.

    What's wrong with these idiots inside the beltway? Treason is treason.

    I say we send all the congressmen to China and let the UAW run our country!

    Why? It would be good for America!
    #10     Jun 10, 2008