Free Trade at All Costs? Lou Dobbs

[Guest guest]

Lou Dobbs spells out why the CAFTA agreement that Bush wanted to push quietly

through Congress is such a bad idea. One viewer of Dobbs' show wrote, " First

NAFTA, then CAFTA. What's next - HAFTA? As in, hafta move to another

country to find a job. " Couldn't have said it better myself.

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http://www.cnn.com/2005/US/03/03/cafta.push/index.html

 

Free trade at all costs?

By Lou Dobbs

Friday, March 4, 2005 Posted: 11:24 AM EST (1624 GMT)

 

(CNN) -- The Bush administration is trying to push the Central American Free

Trade Agreement through Congress quickly and quietly.

 

The White House, however, couldn't find the votes for this so-called free

trade agreement before his re-election in the fall, and the president likely

doesn't have the votes for it now. And that's a good thing for American

workers.

 

CAFTA advocates say the agreement would open up free trade between the United

States and the Dominican Republic and five countries in Central America:

Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

 

But this agreement represents the same free trade at all costs policy that

has led to a 70 percent increase in the trade deficit since 2001. We're not

signing trade agreements to open new markets for our exports. Instead we're

continuing to enter into outsourcing agreements with countries that cannot

possibly

buy our goods.

 

If you add up the gross domestic products of the six CAFTA economies, the

total market comes to about $85 billion, according to the latest available

figures. That's only slightly larger than the economy of New Haven,

Connecticut and

less than a fifth of the size of New York City. As such, expanding trade with

this bloc cannot possibly be a serious growth driver for the $11 trillion

U.S.

economy.

 

The CAFTA trading partners are simply too poor and too small to serve as

major consumer markets for anything made in America, if indeed we still are

manufacturing anything in this country. But with 40 percent of workers in

Central

America earning less than $2 a day, CAFTA will pit the working poor of these

countries against American workers, especially textile workers and small

farmers.

U.S. multinationals don't exactly have a great track record when it comes to

keeping jobs at home in the

face of cheaper labor overseas.

 

More than 35 percent of all U.S. goods exports to the six CAFTA countries

consist of turnaround exports, which are unfinished textile, apparel and

other

materials that are not ultimately consumed in these countries. These

" round-trip " imports are assembled by low-wage workers and exported right

back to the

American marketplace.

 

As a result, U.S. exports to CAFTA countries generally produce greater

imports to our market, which further swells the worsening record trade

deficit. In

fact, turnaround exports have contributed to the U.S. trade deficit with the

six CAFTA nations rising by nearly 60 percent from 1997-2004, according to

the

U.S. Business & Industry Council.

 

And at least three of the six CAFTA countries are in such a weak financial

position they couldn't possibly boost imports. The Dominican Republic is

currently receiving a $665 million standby loan from the International

Monetary Fund

to help the country emerge from its economic crisis of 2003. The program is

set to last until mid-2007, and the country will be under pressure to

increase

exports and curb imports. Unless, of course, those imports are turnaround

imports that are shipped right back into the U.S. market.

 

Honduras and Nicaragua are also receiving special debt relief from the IMF

because of their great indebtedness and high poverty rates. While they're not

austerity programs like the Dominican Republic's, neither country has much

capacity to sharply increase net imports.

 

" Americans know a bad trade deal when they see one, " says Ernest Baynard,

executive director of Americans for Fair Trade. " They've already had to live

through one for 10 years under NAFTA. "

 

U.S. workers have lost nearly 900,000 jobs as a result of the North American

Free Trade Agreement, most of them in the higher-paying manufacturing sector,

according to the Economic Policy Institute.

 

But NAFTA's effects are even more evident in our exploding trade deficit.

Exports to Canada and Mexico have more than doubled since 1993, but imports

to

our neighboring countries have risen by 173 percent, from $151 billion to

$412

billion. As a result, the trade deficit with Canada and Mexico has ballooned

from $9.1 billion in 1993 to $110.8 billion last year.

 

CAFTA may bring lower prices to consumers, but it would most likely lead to

more jobs being shipped to cheap foreign labor markets. And a new poll on

CAFTA

shows American consumers do not want to give up their jobs for lower prices,

according to the nonprofit organization Americans for Fair Trade. In fact, 74

percent of those polled said they would oppose CAFTA if it reduces consumer

prices but eliminates jobs for American workers.

 

" The only people who stand to gain from CAFTA, " Baynard adds, " are people who

are off shoring jobs already or want to offshore jobs. "

 

That is something we simply cannot afford. Working Americans know all too

well the high cost of free trade. I can only hope Congress has learned that

lesson as well.

 

 

 

 

http://www.blueaction.org

" Better to have one freedom too many than to have one freedom too few. "

http://www.sharedvoice.org/unamerican/