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Who's Benefiting from Free Trade? 9-2-13
3-15-13NYTimes OP-ED "On the Wrong Side of Globalization" by Joseph Stiglitz
- "On the Wrong Side of Globalization"
"Today, there are 20 million Americans who want a full-time job but can’t get one. Millions have stopped looking. There is a real risk that workers moved from low productivity-employment in a protected sector will end up zero-productivity unemployed.
2-28-14NYTimes OP-ED "No Big Deal" Paul Krugman
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"The Trans-Pacific Partnership, or T.P.P. — isn't making much progress, thanks to a combination of negotiating difficulties abroad and bipartisan skepticism at home. And you know what? That’s O.K. It’s far from clear that the T.P.P. is a good idea.
2-5-14NYTimes OP-Ed "Free Trade Disagreement" Thomas Edsall
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"On Sept. 8 last year, Senator Elizabeth Warren of Massachusetts declared: “Why are trade deals secret? I’ve heard people actually say that they have to be secret because if Americans knew what was going on, they would be opposed. Think about that!
9-2-13NYTimes--"Fast and Flawed Inspections of Factories Abroad"
- Fast and Flawed Inspections of Factories Abroad - NYTimes.com
While some audits of Chinese and other factories abroad are performed in depth, retailers often choose "check the box" inspections that fail to uncover substandard conditions and outright fraud.
6-9-11NYTimes Op-Ed--"More Trade and More Aid"
- To Win Support for Free Trade, Overhaul Aid to Displaced Workers - NYTimes.com
If America fails to resolve a dispute over free-trade agreements, our economic future will be bleak... As former advisers to presidents from different parties, we are coming together to urge a way out: rethinking how we help displaced workers
5-20-11NYTimes "Making Things in America" Paul Krugman
- Making Things in America - NYTimes.com
The auto industry would've imploded if Obama hadnt rescued GM and Chrysler which would've liquidated, closing all their factories. This would have undermined the rest of the industry, as suppliers went under costing 100s of thousands of jobs.
2-20-11NYT Letters to the Editor on Trade Issues
- Free Trade Issues--Letters to the NY Times
Mankiws column was faithful to economists view that free trade benefits both trading partners. But if it is correct that free trade helps our country, its only fair that more should be done to compensate the workers and communties devastated by...
2-12-11NYT--"When Factories Vanish, So Can Innovators" by Louis Uchitelle
- Innovation Derives from Manufacturing
The debate today is whether we can continue to be competitive in R&D when we are not making the stuff we innovate,'' she says. ''I think not; the two can't be separated.'' THE loss of mfg capacity, measured in lost workers, is startling-8.1 mill
2-13-11NYT--Mankiw--"Emerging Markets as Partners, not Competitors"
- Emerging Markets as Partners--Gregory Mankiw, Bush Economist
As we confront many hard policy choices, lets prepare for the future. Lets invest for the future. Lets be willing to make hard sacrifices for a more prosperous future. But lets not presume that the future is a game requiring winners and losers.
Letter to the Editor of the New York Times
January 11th, 2008
- Posted by Ralph Deeds
David Barboza's January 5, 2008 article on the abysmal workingconditions in China casts doubt on the legendary benefits of free trade. Why should American workers and Chinese workers be sacrificed on the altar of free trade to fatten the coffers of WalMart and other companies whose factories, or those of their contractors, pay low wages for work in dangerous, unhealthful conditions while polluting the world's environment? It would not seem unreasonable to expect American companies to bring to their Chinese operations the pollution, industrial safety and hygiene and human resources policies rather than leaving them behind in the United States.
It's illegal under United States law for a U.S. company to bribe a foreign government official but not to maim or poison a foreign worker. Both the Republican and Democratic parties, while quick to bring intellectual property rights to the trade negotiating table, have not pursued the protection of worker rights with equal vigor.
Our trade negotiators (and the New York Times) act as if the introduction of worker rights considerations in trade talks is comparable to putting sand in their Rolexes.
If American workers are losing their jobs only for Chinese workers to work in unsafe, unhealthful conditions for abysmally low wages, where are the benefits of free trade?"
- Posted by Ralph Deeds
2-12-11NYTimes--"When Factories Vanish, So Can Innovators"--Louis Uchitelle
- When Factories Vanish, So Can Innovators--Louis Uchitelle
The loss of mfg. capacity, measured in lost workers, is startling. From the high point in 1979, thru last month, employment in mfg. has fallen by 8.1 million, to 11.6 million. Consumers have benefited but tens of billions in mfg wages have been lost.
In Chinese Factories, Lost Fingers and Low Pay by David Barboza, NYT 1-5-08
Afraid of Trade
November 12, 2007, 3:07 pm
Afraid of Trade
By The Editorial Board (NY Times)
At first blush, the House of Representatives' vote in favor of a free trade agreement with Peru last Thursday might seem to augur great things for trade pacts.
Not only did it pass by a large margin - 285 to 132 - but a near-record 109 Democrats voted for it. Compared to the 22 Democrats who voted last year in favor of a free trade pact with Oman (there is such a thing), support for the Peruvian agreement looks like a resounding confirmation of the Democrats' commitment to expanding trade.
Except that it isn't. Last week's vote confirms Democrats' longstanding ambivalence regarding the benefits of trade. The 109 Yeas represent less than half the 233 Democrats in the House. Though the White House touts the vote as the biggest ever for a trade deal in Latin America, that's a pretty meager achievement.
Only 15 Democrats supported Cafta-DR, the agreement with Central American nations and the Dominican Republic in 2005. Two years earlier, 75 Democrats voted for a deal with Chile. In 1993, NAFTA got 102 Democratic votes, less than 4 out of 10.
Republicans can always be counted on to vote for trade deals because their backers in business like them. Democrats' ambivalence is proving to be equally unshakable. Large gains from trade reaped by the United States economy over the past two decades have done little to allay Democratic concerns about trade's potential to hurt American workers, who are made to compete against cheaper laborers overseas.
Indeed, less than a handful of trade pacts have received support from a majority of House Democrats: one in 2005 with oil-rich Bahrain (which might have advised oil-rich Oman on how to lobby on the Hill); two in 2004 - with Australia and Morocco. Of course, the easiest trade agreement of all, with Israel, flew through the House on a 422-to-nothing vote in 1985.
It would be a good thing if the vote on the trade agreement with Peru represented a breakthrough in Democratic thinking. It should be a vote on which to build majorities for pending trade pacts with Panama, South Korea and even Colombia - once its government demonstrates progress in bringing to justice those guilty of human rights abuses.
These deals represent new opportunities for American businesses and consumers, and should boost American prosperity. Unfortunately, it is unlikely that Democrats have changed their thinking that much. They are still too scared of trade.
My Time as a Hostage by David Barboza
Trouble With Trade
Trouble With Trade NY Times op-ed
By PAUL KRUGMAN Published: December 28, 2007
While the United States has long imported oil and other raw materials from the third world, we used to import manufactured goods mainly from other rich countries like Canada, European nations and Japan.
But recently we crossed an important watershed: we now import more manufactured goods from the third world than from other advanced economies. That is, a majority of our industrial trade is now with countries that are much poorer than we are and that pay their workers much lower wages.
For the world economy as a whole — and especially for poorer nations — growing trade between high-wage and low-wage countries is a very good thing. Above all, it offers backward economies their best hope of moving up the income ladder.
But for American workers the story is much less positive. In fact, it’s hard to avoid the conclusion that growing U.S. trade with third world countries reduces the real wages of many and perhaps most workers in this country. And that reality makes the politics of trade very difficult.
Let’s talk for a moment about the economics.
Trade between high-wage countries tends to be a modest win for all, or almost all, concerned. When a free-trade pact made it possible to integrate the U.S. and Canadian auto industries in the 1960s, each country’s industry concentrated on producing a narrower range of products at larger scale. The result was an all-round, broadly shared rise in productivity and wages.
By contrast, trade between countries at very different levels of economic development tends to create large classes of losers as well as winners.
Although the outsourcing of some high-tech jobs to India has made headlines, on balance, highly educated workers in the United States benefit from higher wages and expanded job opportunities because of trade. For example, ThinkPad notebook computers are now made by a Chinese company, Lenovo, but a lot of Lenovo’s research and development is conducted in North Carolina.
But workers with less formal education either see their jobs shipped overseas or find their wages driven down by the ripple effect as other workers with similar qualifications crowd into their industries and look for employment to replace the jobs they lost to foreign competition. And lower prices at Wal-Mart aren’t sufficient compensation.
All this is textbook international economics: contrary to what people sometimes assert, economic theory says that free trade normally makes a country richer, but it doesn’t say that it’s normally good for everyone. Still, when the effects of third-world exports on U.S. wages first became an issue in the 1990s, a number of economists — myself included — looked at the data and concluded that any negative effects on U.S. wages were modest.
The trouble now is that these effects may no longer be as modest as they were, because imports of manufactured goods from the third world have grown dramatically — from just 2.5 percent of G.D.P. in 1990 to 6 percent in 2006.
And the biggest growth in imports has come from countries with very low wages. The original “newly industrializing economies” exporting manufactured goods — South Korea, Taiwan, Hong Kong and Singapore — paid wages that were about 25 percent of U.S. levels in 1990. Since then, however, the sources of our imports have shifted to Mexico, where wages are only 11 percent of the U.S. level, and China, where they’re only about 3 percent or 4 percent.
There are some qualifying aspects to this story. For example, many of those made-in-China goods contain components made in Japan and other high-wage economies. Still, there’s little doubt that the pressure of globalization on American wages has increased.
So am I arguing for protectionism? No. Those who think that globalization is always and everywhere a bad thing are wrong. On the contrary, keeping world markets relatively open is crucial to the hopes of billions of people.
But I am arguing for an end to the finger-wagging, the accusation either of not understanding economics or of kowtowing to special interests that tends to be the editorial response to politicians who express skepticism about the benefits of free-trade agreements.
It’s often claimed that limits on trade benefit only a small number of Americans, while hurting the vast majority. That’s still true of things like the import quota on sugar. But when it comes to manufactured goods, it’s at least arguable that the reverse is true. The highly educated workers who clearly benefit from growing trade with third-world economies are a minority, greatly outnumbered by those who probably lose.
As I said, I’m not a protectionist. For the sake of the world as a whole, I hope that we respond to the trouble with trade not by shutting trade down, but by doing things like strengthening the social safety net. But those who are worried about trade have a point, and deserve some respect.
More Articles in Opinion » A version of this article appeared in print on December 28, 2007, on page A23 of the New York edition.