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  1. #1
    Senior Member jp_48504's Avatar
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    NAFTA + CAFTA = SHAFTA

    http://practipro.blogspot.com/2005/07/n ... hafta.html

    Tuesday, July 19, 2005
    NAFTA + CAFTA = SHAFTA
    Yeah, I lifted the title. It started as a bumper sticker in North Carolina produced by the AFL-CIO.

    According to the White House, the CAFTA agreement would eliminate trade barriers between the United States, five Central American nations - Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua - and the Caribbean nation of Dominican Republic.

    It is argued that CAFTA will create jobs in the United States. Most economists agree that, over the long run, the level of employment is determined by the monetary (interest rate) policy of the Federal Reserve. So it is not much influenced by trade.

    In the short run, economists agree that trade affects jobs very directly: imports subtract from GDP and therefore employment, and exports add to it. So when the trade deficit increases, it means a net loss of jobs in the short run, if everything else is held constant. Right now, the US is running a trade deficit of about $60 billion per month. That adds up to $720 billion this year alone!

    The United States lost about 3 million manufacturing jobs since 2000, and much of that job loss is due to trade. Given that most workers displaced from manufacturing jobs are not re-employed at the same wage level as the jobs that they lost, they do lose as a result of increased trade.

    Consider this; all but one of North Carolina's congressional members are ready to vote against CAFTA, when it comes to the floor of the U.S. House of Representatives for debate. The shadow of NAFTA, the North American Free Trade Agreement, looms large in their thinking.

    Ernest Baynard, the executive director of Americans for Fair Trade, who along with the AFL-CIO rallied in Raleigh to oppose the agreement said, "NAFTA cost the nation almost 1 million jobs, 33,000 of them in North Carolina."

    "The only freedom CAFTA will create is freedom for folks to export more of your jobs," he said. "CAFTA is basically, at its core, an outsourcing agreement.... There are only two types of people who support CAFTA - those who are outsourcing your jobs, and those who want to," according to Baynard.

    John Murphy, the vice president of Western Hemisphere affairs for the U.S. Chamber of Commerce, acknowledged that his group has a hard sell.

    It is worth noting that compared to trade agreements such as NAFTA, a bigger cause of our trade deficit is the overvaluation of the dollar. If the dollar is overvalued by 25 percent, that is the same as putting a 25 percent tariff on our exports and, at the same time, subsidizing all imports by 20 percent.

    Although this isn't all of the arguements pro and con, it seems clear to me that CAFTA is no better for US workers than NAFTA. Wage earners in the US have had stagnant incomes, in real dollars, for three decades. CFTA is another step toward creating a 'sharecropper' society which could ultimately set the stage for a facist theocracy.

    Unlikely? Do you want to chance it? Not me.
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