May 16, 2008 - 04:05:55 CDT
Free trade agreements: The people in America and elsewhere who profit from them love them.On the other hand, there are words that come from people's mouths so vile they are spat out as a curse: NAFTA, CAFTA.
No, they're not really words, but acronyms. Still, people pronounce them in sentences as if they were real words.
The North American Free Trade Agreement is fairly straightforward. It has removed most of the trade barriers, including tariffs, that the United States, Canada and Mexico previously had imposed on each other. It's been phased in for years, beginning in 1994.
The other acronym is deceptive. Actually, it's the Central American-Dominican Republic-United States Free Trade Agreement. Seven countries have signed onto it, the U.S. in 2005.
The U.S. also has entered into various kinds of free trade agreements with countries individually, countries as diverse as Morocco, Australia, Singapore and Bahrain.
It would please many wheat growers in the U.S., including ones in North Dakota, if Congress would approve legislation allowing a free trade agreement with Colombia. As it stands without one, about 35 million bushels of American-grown wheat go to Colombian buyers in a year's time. They'd likely buy more from us if there weren't restrictive conditions affecting open marketing of the grain.
Agricultural producers in the U.S. are in a strange position. Protectionist measures are loved if they diminish the ability of foreign competitors to intrude on the domestic market; a free trade policy is loved if it enhances American producers' sales that will go to the export market.
Even putting it that way is a vast oversimplification. Many factors play into comparative advantage in trade.
To what degree countries subsidize their agricultural producers makes trade anything but a level playing field. Dumping complicates the matter. Speculation and futures trading - all are factors in trade, and that's only focusing on agricultural goods.
The days are long gone when the principal role of American farmers and livestock raisers was feeding and supplying Americans.
The truth is, we've had an export market since colonial times, sending tobacco and cotton across the ocean. Likewise, we should remind ourselves we've been importers of all sorts of goods, including agricultural ones, since the beginning. The rum distillers of New England couldn't have had such a lucrative business without sugar cane from the Caribbean region.
Free trade and globalization have been in the making for a long time. A detrimental effect for us is that jobs are migrating from the U.S.
The U.S. needs to work hard to make that trend as advantageous to its people's interests as possible. It's a sure bet other countries will do the same.
NDr wrote on May 16, 2008 8:34 AM:
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