Fifty economists ask Obama to "step up" on trade

[Freddie Stubbs]

Source: Reuters

(Reuters) - Fifty economists have written to ask U.S. President Barack Obama to "step up to the plate" on World Trade and champion a last gasp deal on the moribund Doha round of world trade talks.

The letter was drafted by Jagdish Bhagwati, a professor at Columbia University, and signed by economists based in the United States, Canada, Europe, Australia, Singapore and Japan, as well as three former trade ministers and a former president of Mexico, Ernesto Zedillo.

"As the window of opportunity for a robust deal on Doha Round is closing, with the United States now about to enter into an election mode, we make an appeal for Presidential leadership in the United States to put Doha into closure along with the three Free Trade Agreements that finally seem close to passage by bipartisan agreement," said the letter, which was sent on Wednesday.

"The fear of the labor unions that trade with the poor countries produces poor in the rich countries is mistaken. The demand of the business lobbies that want ever more concessions from others is excessive. The contention of some experts that the gains from Doha are minuscule is flawed in neglecting the costs of the failure of Doha and the ensuing damage to the WTO.

Read more: http://www.reuters.com/article/2011/09/02/us-trade-doha-idUSTRE7814SO20110902

[Arctic Dave]

1. WTF! Am I reading this right? They want us to outsource more?

Fuck the WTO.

[onethatcares]

5. I'm with you A.D.

fuck the WTO and the IMF, their script seems to be smash the poor and spread the wealth among the richest in the world.

What they really want is for the citizens of the United States to be the financial equals of those folks in Bangladesh that pick the rice.

[JHB]

2. _Which_ fifty?

It makes a difference.

[davidwparker]

3. Sounds like the signers are economist from those leech

countries who are feeding on this one.

How about getting out of WTO/NAFTA/Etc in the same way * got out of the Kyoto Treaty. Republicans show they can get things done no matter who is in charge.

[Freddie Stubbs]

4. The US never ratiefied the Kyoto protocol. It is a founding member of the WTO and ratified NAFTA

[pampango]

6. "The letter echoes an attack on Obama's trade policy...by World Bank President..."

The letter echoes an attack on Obama's trade policy in July by World Bank President and former U.S. Trade Representative Robert Zoellick. His call for a turnaround was dismissed by Michael Punke, U.S. Ambassador to the WTO.

Asked if the signatories were blaming the United States in particular, Bhagwati said: "Only in the sense that almost everyone following the Doha negotiations has noticed that Mr. Punke simply says no to anything that could help close Doha."

After a failure to clinch a deal this spring, WTO Director General Pascal Lamy tried to get the 153 member states to agree on a lesser package of reforms that could help the least developed countries (LDCs).

[JDPriestly]

7. The rest of the world complains on the one hand that we have too much

debt, and on the other that we don't want more trade deals that put us in more debt.

We need to think for ourselves. The economists should shut up unless they can show us statistics that prove that our past trade deals actually helped our economy.

We cannot play Santa Claus to every third world country at this time because our own debts are impoverishing us. Our own citizens need jobs not more cheap stuff produced by cheap labor.

Of course, all these foreigners want us to enter into more trade agreements that weaken us in every respect. They do not have the interests of Americans at heart.

[pampango]

8. Beware of the foreigners causing American's problems, eh?

Our problems are caused by us. We have cut taxes for the rich, slashed our safety nets, weakened our unions and permitted a dysfunctional health care system to survive.

None of that was done to us by foreigners, but we blame them (particularly the poor ones) for our problems. If we had more progressive taxes, stronger safety nets, stronger unions and effective health care systems (like all progressive countries have), we wouldn't worry about sharing our wealth by trading with poor countries any more than Canada and Europe do.

Since we don't have any of those, I guess the most convenient scapegoat is poor foreigners. It's got to be their fault. Yeah.

[JDPriestly]

10. Even if we had more progressive taxes and

stronger unions, our labor would still not be "competitive" with the cheap labor from overseas.

If we imposed reasonable tariffs on products we import, we could level the playing field a bit.


Our problem is high unemployment, and that is directly related to the closure of American factories and businesses. We could lower income taxes on everyone if we imposed tariffs.

Other countries impose VAT or tariffs, why don't we?

[pampango]

11. German, French and Swedish labor competes well with "cheap labor overseas".

All those countries are more unionized than we are and have higher, more progressive taxes. What are we, the poor, little rich guys who can't compete with poor foreigners like they do?

We could pass a VAT but, as you know, it increases the cost of everything that is produced, even the stuff we consume here. We haven't done it because we don't want to see prices rise here. Of course Europe uses the proceeds of the VAT to fund the safety net which might not be what an American government would use it for.

Europe doesn't have tariffs at all on imports from the really poor countries (a form of development aid), has no tariffs at all on each other and a growing list of FTA countries and the same level of tariffs with the rest of the world that we have.

[JDPriestly]

14. The VAT covers the cost of social benefits - or some of it.

That is true.

So how is that cost covered here?

Some are paid directly by employers, some directly by the employee, some by the government out of general revenue usually from income taxes on individuals.

Now, in European countries a VAT pays for some or all of the costs of social benefits. All products are taxed pretty much equally for those costs. That means that if a jar of pickles is produced in China and imported into Germany, a share of the cost of social benefits is charged to the purchaser of the Chinese pickles. Similarly, if that same jar of pickles is made in Germany, the same VAT tax is imposed and the same charge for social benefits will be paid by the purchaser.

So, in Europe, thanks to the VAT, a share of the cost of social benefits is charged to the purchasers of foreign goods just as it is to purchasers of domestic goods.

Thus, the prices of foreign goods and domestic goods all go up equally to pay for the social benefits. That means that some of the burden of paying for those benefits falls on imports. It does not all fall on domestic employers, employees, and income tax payers as it does in the US.

That is why I favor a VAT. It evens the playing field for domestic products just a bit.

[Odin2005]

9. Fuck Free Trade!

[high density]

12. Obama isn't good at stepping up to things

But if it's going to help big business and rich Republicans, I'm sure he'll give it his best try.

[Sen. Walter Sobchak]

13. Free Trade isn't the problem, the Republicans who want a third-world country are

The rest of the world manages with Free Trade regimes far more liberal than any to which the US is a party just fine. The US struggles not because of Free Trade but because while the rest of the west shifted their economies to the post-industrial economic order with strong national industrial policies. The US led by the Republicans instead believed that it could weather the storm by creating a comparative advantage through deregulation, lower taxes, lower wages and rolling back labor protections. Ofcourse the joke was on them because first jobs to leave were non-union, low-wage textile jobs in the South. But never fear... the service industry will replace all those dirty industrial jobs!