| Tyrone Slothrop |
08-10-2005 02:41 PM |
CAFTA
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Originally posted by Spanky
That is a good idea. a mistake.
1) You support the idea of free trade
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Probably. What do you mean by this?
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2) You also support the idea of reducing Tariffs.
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Yes.
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3) CAFTA reduces Tariffs between the CAFTA countrys and the U.S. (and eventually eliminates them).
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Among other things.
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Possible reasons why a person would still not support the treaty considering the above.
1) On balance the treaty does not promote free trade because the negative effects on Free Trade in the treaty outweigh the positive effects.
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I have seen this said by people whose judgment I trust.
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2) The treaty does promote free trade, but it does not include other provisions that would make it a good treaty. In other words, free trade treaties also need other stuff in them to be considered good.
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I'm not quite sure I'd put it this way. This is the chance to negotiate a free trade treaty with these countries. What's it going to contain?
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In support of number one you have said that without a level playing field you do not have free trade. Your idea of a level playing field includes the fact that both sides need to have the same , environmental, safety and labor regulations. So in order to have a true free trade agreement you must include provisions that require the less regulated country to match the regulations of the more stringent countries. Since CAFTA does not have such regulation enforcement scheme (or does have it but you think they are not stringent enough) this lack of an even playing field makes the treaty less free thereby on balance making this not a free trade agreement. You have also pointed out that business support this idea because they trade pollution credits and like such systems.
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Free trade is an ideal. You will never have a level playing field, but you have these opportunities to make it better, and it's important to get them right.
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My counter argument to this is that
1) You can never have a level playing field (under your definition), especially if two countrys have different PCIs. So under your rule not two countrys with differenct PCIs could really have a trade treaty.
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I think I answered this above. We don't let the perfect be the enemy of the good, but we want a good treaty.
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2) No other economist I know thinks regulations need to be equal to make a tariff reduction beneficial.
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OK. Whatever.
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3) Free trade is a good thing even if the playing field is not even. Perfect example is the US. California and Alabama do not have an even playing field (under your definition because Alabam has less stringent health, labor and environmental rules) and yet California and Alabama are considered to have free trade. No one would argue to set up tariffs to get Alabama to adopt our stricter rules. It would be nice to have Alabama have stricter rules but it is not worth sacrificing the free trade status to get those rules.
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OK. Whatever.
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4) I also said that Business would not support the treaty if it did not, on balance, make trade freer. American businesses generally act in their own self interest and they all support the treaty. You stated earlier that you could come up with a reason why American business would support the treaty if it did not increase free trade, but we are still waiting for that reason. You also said that it would be in business best interest to push for your definition of a level playing field. That may be true but clearly they think that reducing tariffs is a lot more important because they support CAFTA. Then you questioned if businesses really knew what is good for them. I said that was ridiculous.
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I think I questioned whether you know what's good for business, and I questioned your argumentative style of simply asserting that business likes something and therefore it is good.
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Your argument in support of #2 is that these environmental provisions and labor provisions are necessary to make it a good treaty.
My only response to that is that a treaty without those provisions still reduces trade barriers and makes a good treaty. Just reducing tariffs on its own is a good think without including that other stuff. In adidtion, my response is that if you think this other stuff needs to be added to make a free trade agreement any good then you really are not for free trade.
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It's an opportunity missed.
The difference between us seems to be that you refuse to compare CAFTA to anything but the status quo, whereas I am comparing it to the sort of free trade agreement we have had before and might have again. You subscribing to a particular framing of the issues, without having stopped to wonder why the issues have been framed in that way. And you can say that I "am not really for free trade," and yet I am talking about provisions that have been a part of free trade agreements until now. |
