Thread: CAFTA's Covert Opponent: China

http://www.heritage.org/Research/Tradea ... /wm778.cfm

CAFTA's Covert Opponent: China
by John J. Tkacik, Jr.
WebMemo #778

June 28, 2005 |
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In the Multi Fiber Arrangement world of quota-free trade in yarns, fabrics, and finished textiles, the Central American Free Trade Agreement (CAFTA) represents a direct threat to China’s growing powerâ€â€

CAFTA’s defeat, therefore, would be a double victory for China. Central America would be left with the message that the United States is simply not interested in its fledgling democracies. And Congress would do China the favor of taking out one of its few remaining competitors in the U.S. textile market.

John Tkacik, Jr., is Senior Research Fellow in China Policy in the Asian Studies Center at The Heritage Foundation.

Me thinks he forgot to mention the open boarders the loss of jobs and the fact that CHINA will be shipping their products to Central America to be processed there and then sold to American's as well. Do some more research John.

I am aware of the issues in the article and am in support of its position. However ALIPAC was founded in and draws its greatest support from the state of North Carolina. There are clothing factories there and citizen employees who make money in clothing production.

The economics of doing clothing production in North Carolina is marginal. There are military goods of which production are understandably protected. There are plants producing goods with high skills and or fast order and delivery turnaround.

In addition to these there is production of a limited range of goods on which there are still tariff barriers due to American noncompetitivness. As a result the Carolinian industry benefits from protectionism. American consumers end up paying more to save jobs.

North Carolinian employers are looking at hiring workers from Mexico and the Caribbean basin.
This does not help the American
employees as much as managers.
The citizen employees are much concerned of being replaced. For a major part they already have been replaced by the Chinese.

The American clothing industry has been replaced to a lesser extent by Mexico which is the second largest source of clothing imports. The Mexicans produce clothing and are less dependent on the United States than would be the Caribbean. While 80% of Mexican clothing exports are the maquiladora assembly of American cut goods they have a domestic clothing industry which could if the yuan or the American minimum wage goes up explode.

There are also cotton thread and textile plants in the state of North Carolina. Any production of clothing in Central America and the DR is likely to source much of the input from the USA. The Mexicans are less dependent they have cotton farms, thread mills, textile mills. For input the Central Americans and DR need us more than China or Mexico. If the Chinese continue to be the USas largest source of clothing imports there will not be this benefit.

If there is closure of clothing plants in North Carolina then a group of American citizens will be put out of work. However if the Chinese remain the factor that they are the clothing and the textile workers will suffer.

In the aftermath to clothing mill closure we need to ask will the former clothing workers benefit or lose from the nations and state immigration status quo. Would thousands of displaced American workers left in North Carolina be helped or hurt by an unlimited number of illegal immigrants competing for relief and jobs in other industries.

[quote]If passed, CAFTA would enhance the competitiveness of Central American factories that pay higher wages higher than China and predominantly use U.S. cotton. But if CAFTA fails, U.S. cotton exports to Central America will come to an end, while U.S. imports of Chinese textilesâ€â€