From: pat@chinet.chi.il.us (Patrick Louis Sugent)
Newsgroups: alt.politics.elections,talk.politics.misc
Subject: Re: Ross Perot, Free Trade
Keywords: free trade
Date: 8 Apr 92 13:06:55 GMT
Distribution: usa
Organization: Chinet - Public Access UNIX

In article <1992Apr7.192630.1261@leland.Stanford.EDU> whynot@leland.Stanford.EDU (William Shepherd) writes:
>
>I see this viewpoint as one of the largest fundamental flaws in thinking in
>American politics today.  It represents at best a incredible
>misinterpretation of an elementary economic principle, and at worst just
>plain foolishness.
>
>What does economics say about free trade between two regions?  It says that
>if free trade between two regions is allowed, _overall_ efficiency will
>be increased (i.e. the _sum_ of the two region's production will increase).
>What economics does _not_ say is that each region will be individually
>better off!  Indeed, it is highly probable that one of the regions will be
>made _worse_ off by the agreement.
>
>hazard a guess, I would say that free trade with Canada is probably to 
>our advantage, but free trade with Mexico is probably not.  (Not even 
>considering environmental issues.) 

   While I believe you are correct in theory that the economic principle is
that overall efficiency will be increased, I believe that you are incorrect
to say that one of the regions will be made worse off by the agreement.

  I could go on for hours for this, but instead will just make a few
points.

1)   A large part of the growing U.S. export market is in (surprisingly) Latin 
America (not Europe or Japan).
2)  Statistics quite easy to find reveal that countries with high trade 
barriers have very poor economies(barriers made the economies obviously
worse off in many of these cases that I have knowledge of.)
3)  The US and the midwest in particular is very well positioned to take
advantage of a free trade agreement with Mexico.
4)  The US is quite silly to worry about being taken over by Mexico due
to a free trade agreement.  Mexico is very much worried about being taken
over by the US (perhaps more astutely), but from everything I've read,
both countries are very likely to be better off. (With the US much better off.)
5)  The most common arguments I've heard against the free trade agreement
with Mexico is that it would take $30,000 machinist jobs from the US to
go to Mexico for $2 (or some otherwise small number.) The fact is, that
if those jobs make the US uncompetitive in a global economy, those jobs
are going to go somehwere else anyway and we won't even have all the 
advantages of a free trade agreement to show for it.  With free trade, those 
jobs would be replaced by other jobs that the U.S. is better at (an obvious 
example is the number of jobs in distribution that would arise from free trade
with Mexico. However, there are others to be sure)

  For those of us that haven't woken up yet, the US is in a global economy
now(as opposed to just after WWII.)  We can do quite well in this global
economy and are very likely to benefit from free trade agreements with just
anybody willing to sign such.  I can't offhand think of any country where
protectionist barriers have done the economy of an individual country any 
long-term good(except for politicians).


Pat
-- 
Patrick Sugent                       

pat@chinet.chi.il.us		     
Newsgroups: alt.politics.elections