Sunday, November 06, 2005

No Agreement on FTAA

The Summit of the Americas talks in Argentina ended yesterday with no agreement having been reached on the free trade agreement being pushed by the US and Mexico. Despite 27 countries wanting to set a date for the next round of talks, even that was scuttled by Venezuela, Brazil, Argentina, Paraguay, and Uruguay. The lead dissenter, of course, is Venezuela's communist leader Hugo Chavez. (Boston Globe: Summit of Americas ends in deadlock).

The five naysayers refuse to consider new talks until the US changes certain trade and economic policies that would make the agreement even more attractive to Latin America. It must be understood, however, that while the FTAA would benefit major manufacturing firms by opening up large underpaid markets, there is absolutely no benefit to US workers in this agreement. That the FTAA appears at least mortally wounded, if not dead, is actually a good thing for most Americans.

The average wage for factory workers in Mexico is $6 per day. In Peru, that figure drops to $3.00 per day. What incentive do manufacturing firms have to keep jobs here in the US where they are forced to pay over $5.00 per hour in minimum wage, plus benefits? The only thing that offers any measure of protection for Americans are those trade and economic policies that Argentina and Brazil want to see reformed in their favor.

With high end technology jobs heading to India and China, and with low end factory jobs heading to undeveloped countries in Southeast Asia, it simply does not make sense for the US to open more doors to this sort of job migration to South America. Having one of the highest standards of living in the world, a global economy is not in our best interests. Without significantly lowering our standard of living, we cannot compete with the minuscule wages, non-existent environmental standards, and extremely lax labor laws in the third world. Of course, that's precisely why manufacturing firms want to see FTAA approved. It cuts their expenses significantly at the cost of higher unemployment here in at home.

Free trade agreements do not benefit the US, nor do they benefit the average worker. Be thankful this agreement got absolutely no place this time around. What we truly need are incentives to keep jobs here at home. We need severe tax and tariff penalties assessed on companies that off shore aspects of their operations. We need heavy tariffs on American goods manufactured in Southeast Asia and Central America. We need a reason for American companies to keep their technology and manufacturing right here at home. When it comes to the economy, globalization is the wrong path for the US to take. That is, of course, unless you're willing to lower your standard of living. I am not.


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