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08 December 2012

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mbrenner

Ignatius is plain wrong - not for the first time. Even supporters of NATFA accepted that there would be job losses but argued that they would be offset offset by improved macro economic performance. Other, better paying jobs in other sectors would open up - in theory. They have only to a very small extent because of off-shoring.

The level of economic reporting in the American media about economics is about the same level as its reporting of Egypt, Iraq, Afghanistan etc. I am perplexed how these people forget so completely everything they learned in college. Perhaps I now know where all my B- students wind up.

As to TAFTA, not much to worry about. The tranatlantic economies are already so thoroughtly integrated in every aspect that a formal treaty smoothing out the few remaining speed bumps would have only marginal practical effects. Recall that we're talking about economies at the same level of development, wage scales, etc. If anything, European corporations could outsource jobs to relative low-wage USA. In fact, they outsource to Asia just the way we do.

Of course, all of this is about three things: distraction from economic stagnation and income disparities here and over there; really terrific photo ops; and a gilt edged chapter in the second volume of Obama's memoirs.

Anyone have an extra ticket to Goldman Sachs sponsored inaugural party?

The Twisted Genius

I have a feeling the Reinheitsgebot would only one of many problems in a TAFTA. Although I would be finally able to get a new Passat Wagon. Wagons just aren't made in the States anymore.

Jake

I think the village idiot has a brother....

Medicine Man

What should I believe, Ignatius or my lying eyes?

kao_hsien_chih

"Job losses" vs. "job gains" in free trade agreements are a dicey matter where both proponents and opponents are given to all manner of weasel talk. Of course "some" jobs were lost due to NAFTA, in certain sectors, on both sides of the borders (both US-Mexico and US-Canadian), while other jobs were gained, again, on both sides of both borders. Whether "net" job gains outweigh the losses (for all three countries), however, is not easy to calculate in any fair fashion. One imagines the total gain in economic value was probably a net positive for all three countries involved, but to whom exactly those gains actually accrued to is rarely if ever very obvious.

Fred

Secretary of State Hillary Clinton ... noted the“long-standing barriers to trade and market access” that would have to be removed to make any such deal possible, such as the European Union’s protectionist agricultural rules.

So Europe will adopt US rules on genetically modified foods, US rules on food inspection and US rules on labeling? I don't see that happening. We certainly aren't going to tighten our regulations to match Europe's standards. But I'm sure Hillary needs some major campaign contributions from ADM and Monsanto. As to job creation - I'm sure they'll be a few more jobs spreading the manure from D.C. lobbyists and associated 'think' tanks.

Paul Escobar

To all,

I will let others debate statistics on this matter.

But it strikes me that Germany is subject to similar competitive pressures.

Like the United States, they are wedded to a high-value currency (which should theoretically cripple exports). While they do not have a low-wage neighbour straddling them, they engage in "competition" with slave-labour states like China & Bangladesh.

According to the 'Washington Times', they have sustained employment, quality-of-life, and workplace/environmental standards:
http://www.washingtontimes.com/news/2012/may/8/getting-ahead-by-getting-along/?page=all

The article details a harmonious collaboration between government, business, and union. They are not antagonistic towards each other, and each "knows his role".

Such a thing seemed to exist in the United States at one time. I recall the prominence of wise & gentle men like W. Edwards Deming.

Now...well, I think the contemporary secessionists are correct in seeking escape from this institutional mortal-combat. IMO, low-education [North] American workers are being needlessly punished.

Walrus

This proposal is "let's you bail out us" because none of this happens without closer integration of financial systems.


......And of course that means embracing Americas lower, or non existent, prudential rules and standards.

Then we get to actual product standards. Do you think Europe,is going to adopt / accept American lax standards?

Here's a suggestion. How about America adopts the entire metric system - kg, metres, metric fasteners, the lot.

When you have finished doing that, get back to us again.

johnf

It would seem to only add to the bunker mentality which is paralysing The West on all sorts of levels at the moment. The last thing we need now is yet another excuse to cut off the rest of the world. We should be out there mingling and learning and walking into walls we never even knew existed.

Clifford Kiracofe

If the Europeans are patient, they can re-colonize us over time.

I imagine some in Washington belive that this TAFTA is clever policy with a strategic objective of confronting the rise of China.

On the other hand, in a multipolar environment wedding ourselves to Europe limits strategic flexibiity.

TAFTA would enhance the position of transnational oligarchic elites. Thus, Ignatius an apparent stenographer for these interests, writes his breathless column floating the policy concept.

Jose L Campos

I would not dismiss this proposal. To me it seems logically eminently necessary. Capitalism is a system for accumulation of wealth. This is done by continuous expansion, occupying more and more countries and transforming them into appropriate producers and consumers.
But the expansion does not take place only in space it takes place in time. The expansion of productive effort now occupies every day of the week and every hour of the day.
At the same time people begin to be considered simply consumers. Have you heard recently that some legislation will affect citizens? It is always that the legislation will affect consumers. But consumers are abstract persons. They are neither father not mother or children or American or European. For the businessman a consumer is a featureless source of income.
So the amalgamation of the transatlantic economies is a natural result, actually a necessity.
It is the apotheosis of there is neither Jew nor Greek slave or master. Simply every one of us is a consumer so barriers fall.
I remember that Caracalla made all free men citizens of Rome I suspect under similar conditions of cultural exhaustion. So now we all may become citizens of Transtlantia not because of our blood or customs or gender but because we are consumers, that is, nobody in particular.

Peter

From a Bankers view of the world, gaining Absolute Advantage to flow money into any country that decreases cost to produce without undue expense of regulation or taxation. The total ability to move money without any pesky interference.

My cynical side looks at all those containers and banking that these free trade agreements bring. The drug trade thrives in the midst of all that commerce.

Cal

I don't want to even get started on this. In 1966, as a college student, I went to the Geneva GATT hearings with my father where he was representing and testifying in behalf of the US Manufacturing Industry.
The decline and loses in US manufacturing industry; production,job loses, that were predicted have happened right down the line.
High production, high industry, high export, high employment states sustain themselves, others don't....you can throw the rest of your theories about global trade and economics down the toilet.
In the 60's it was the wanna be multi nationals in search max profits thru lower material and labor cost---now we have the "Elite Liberal' idiots like Hillary who want to spread the wealth and finish us off. Naturally the elite do-gooder liberals won't be the ones paying the price for this further 'global leveling' of wealth.

BTW, Germany does employ some trade protection, that's why their economy is better shape than the EU's other economy's and why the EU is haranging Germany to spread their wealth.

Charles I

follow the income gap curve

r whitman

Texas has had quite a boom from NAFTA. Just visit any of the Mexican border cities and you will see tremendous growth in the last 17 years. Jobs are still low paying on both sides of the border but there are a lot more of them. The largest concentration of 18 wheelers outside of Chicago is in Laredo, Texas carrying cargo both ways. Most of the blue collar jobs that fled to Mexico would have gone to China. When dollars go to Mexican border cities a substantial portion of them leak back into the US.

mbrenner

I used to dabble in the field of international political economy. That is my justification for making a few further points.

1. The biggest gainers from NAFTA are: Mexican producers of vegetable crops like tomatos; Asian investors in Mexico who have unrestricted access to US markets; and, above all, American agro-business. The last have wiped out whole swaths of small Mexican farmers who could not compete with cheap, genetically modified corn from American factory farms. Some doubtless have found employment in the illicit drug trade. Overall, NAFTA has helped Mexico very little.

2. The EU never will accept unrestricted imports of
genetically modified, hormone and antibiotic saturated food from the US. It's a political non-starter. It's essential to us because the areas in which we have a clear trade advantage are agriculture, financial services and media = guess who is pushng TAFTA?

3. Germany's extraordinary export performance is sustained by its strength in heavy engineering, machine tools, etc where marginal price differences are a minor factor. Since 2008, they have had two additional benefits: the one growth region is Asia where demand for these products is heavy; the EURO has given them a considerable de facto advantge because German inflation had been much below that of Italy, Spain and a few others.

Babak Makkinejad

I do not think the job gains or losses ought to be the central concern; rather the income obtaining from those jobs.

jerseycityjoan

Your response is interesting and rather surprising to me.

Aren't you assuming we have no choices?

Is that what you really think?

Is that what you really want?

Do you feel that resistance is wrong or futile?


jerseycityjoan

"At a recent meeting of German business and foreign-policy leaders, one participant summed up an anxiety that’s almost palpable here: “Europeans have a sense of being left alone. You Americans don’t understand how much we need you.”

Do I want to be yoked to these people in a comprehensive trade agreement?

Hell, no.

NATO is already weighing us down quite enough. The other things that we voluntarily take on, when added up, would kill other countries quickly and automatically today.

Doesn't anybody realize that the US itself could really use a "US figure" right now, a benevolent, bigger and wealthier that would be willing to shoulder far more of the burdens of alliance than is their fair share and will itself pay for things that should be paid by all?

Time for everybody to wake up.

It is not 1962 anymore. It's not even 2002 anymore. Our position in the world has changed with the rise of East and other areas. Our domestic situation has changed a lot too, due to income inequality and a host of other factors that are weighing down the 99%.

kao_hsien_chih

It's not nearly that simple. Even in context of Mexican agriculture, for example, fruit and vegetable growers have done well, while those who grew staple crops have been largely driven out of business. Or, how about US manufacturing? Highly skilled jobs, producing high-value items, have actually grown substantially, catering to markets all over North America. Manufacture of cheaper goods, requiring less skilled labor, has moved South--although a lot more have gone to China. Has more wealth gone to the 1% than to the 99%? Probably. But the meme that the free trade made the wealthy better off at the expense of the poor is also oversimplistic.

CK

A minor correction Jose, capitalism is a system for creating wealth. Politics/parasitism is the system for the accumulation of wealth that someone else creates. Minor difference but morally significant.
Another minor emendation, all of us are consumers always, from the moment of conception (indirect for 9 months or so) to several days after our last breath (cremation or funeral your choice). Few of us are currently producers for any significant periods, and fewer are needed to produce for the many useless mouths every year.
Any business person who treats his customers as featureless consumers will find that his customers will leave his custom as soon as a better deal appears. Only governments and their armed enforcers can prohibit citizen customers from finding and taking better deals and force customers to become "featureless consumers."
A final emendation, there are always slaves and always masters. The chains and coffles might look different, might be made of paper promises and governmentally approved threats but they are still chains and still coffles.
We will not become citizens of trans anything, no government will give up its slaves(citizens) willingly.

CK

Dear MB
Your second point assumes that EU politicians are not purchaseable. The discounted net present value of the vote of the marginal politician can be calculated and will be paid if it is positive.
Now it is possible that by definition an EU politician is an honest pol in the sense that once bought he stays bought; I have never bought one so I cannot say.

zanzibar

Voice from the past.

Jimmy Goldsmith interview by Charlie Rose. circa 90s.

http://youtu.be/4PQrz8F0dBI

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