January 8, 2003
NO CROW FOR THEM:
U.S. looks south to expand free trade area (Elizabeth Becker, January 9, 2003, The New York Times)The White House announced Wednesday that it would start negotiations to create a free trade agreement with Central America within one year, a huge leap in its ambitious plans for a free trade zone throughout the Western Hemisphere. The administration of President George W. Bush has made the effort to build on trade deals such as the North American Free Trade Agreement, or NAFTA, the center of its Latin American policy. The deal announced Wednesday cemented the role of Robert Zoellick, the U.S. trade representative, as the White House's chief point man for the region. Even critics of the administration's policies in the region are applauding Zoellick for what they uniformly describe as aggressively promoting improved relations in the region when most of the administration is focused on Iraq and the war on terrorism. Flanked by representatives of several countries that just decades ago knew the United States mostly as a purveyor of weaponry in their nasty civil wars, Zoellick said American interests in the region were now centered around liberalized trade, economic development and democracy. "This is more than a trade negotiation but a plan to strengthen democracy and promote development in a region that has known too little of both," Zoellick said.
One can't help but notice that the hysteria surrounding the steel tariffs has not been matched by similar coverage and kudos for the Administration's recent series of Free Trade victories. This is hardly surprising as regards the liberal mainstream media, but it's disappointing from the often self-congratulatory blogosphere (especially the libertarian wing), which seems reluctant to admit that it completely misjudged the President. Posted by Orrin Judd at January 8, 2003 9:56 PM
The steel tariff was an ill-conceived move, and nothing showed it more than that the Bush administration over the next few months riddled it with exceptions and reductions.
Hopefully that experience will encourage their free trade advocacy.
They got credit in industrial states for protecting the steel works but had a wayt to get around them and that's ill-conceived?
Posted by: oj at January 8, 2003 10:30 PMObsolete thinking.
Integrated steel mills are a relic of industrialism.
We're in the post-industrial age, folks.
For 100 years, the U.S. produced 100 million
tons of steel a year. That's 10 billion tons
lying around, most of it available for reuse.
While the greens were whining about recycling
bottle caps, Nucor was making billions by
recycling steel.
Anyhow, I'd love to trade for Central America.
What will they take? We could buy the whole
place, lock, stock and barrel, for about what
we spend on nail polish remover.
Mr. Judd;
Instead of bloviating about it, I wrote
to my Senators. Also, your post was so definitive that I just linked to it.
I'll pat the administration on the back for their free trade policies when the negotiations succeed. Until then it is the equivalent of "don't leave any children behind", fine thoughts without conclusive actions.
Posted by: Drew Craft at January 9, 2003 11:18 AMDrew:
well, except that they've already negotiated pacts with Chile, Singapore, etc.
I've been quiet about the steel tariffs here, but they have not been quite as benign as OJ thinks. We buy a couple of million pounds of steel a year, and saw sharp price increases from the tariffs. For example, we buy a sheet of 14 ga. 48x120 steel on six month contracts. On our contract for the first half of '02, we paid about $0.17 per pound, which was a historically low price. For the second half of '02, we paid $0.257 per pound. A 50% increase in your basic raw material is not pleasant, regardless of how many trade areas get opened up -- and I'm all for opening up trade areas.
Posted by: David Cohen at January 9, 2003 2:33 PMMr. Cohen;
OJ is right, though, that the trade agreement with Chile is a big deal but it didn't seem to get much notice. Certainly it's something libertarians like me have been agitating about for many years. And while I agree with you about the steel tarrifs being more odious than OJ's view, if the Chile FTA is signed into law, that will IMHO move GWB from the negative to positive on free trade.
David:
Certainly not benign, but a small price to pay.
I was thinking over these posts today while
chopping weeds, and it occured to me that
-- if Orrin is right about religion and all that --
then most of the investment that has been
made in the past 30 years in China should
have been made in Latin America.
It wasn't. Why not?
No simple answer, but part of it surely is
that investors did not trust Latin governments
not to expropriate them, while China, despite
its official ideology, made them comfortable
about both exporting profits and protecting
capital.
If I were looking to invest in some industrial
enterprise right now, which Latin countries
would I consider. Chile for sure. And then . . .
Harry:
A couple things:
(1) Business sees a billion people and think that guarantees profits, but nearly all have lost their shirts in China.
(2) In the long term it seems possible that China too will be saved by Christianity, which is growing rapidly there.
(3) As soon as China becomes a democracy and wages start being driven up the manufacturing will tranfser to where labor is cheaper.
Don't get me wrong. I think investment in
China is wrong, first on moral grounds, and
second on practical grounds.
China has not had effective government for
over 200 years, and has not had effective
government by Chinese in over 400 years.
That's a trend I'll hang my hat on.
But that's backing into the issue. My puzzlement
(well, I'm not entirely puzzled) is why
investment didn't flow south. Less of a language
problem; the workforce, although of low
quality (thanks mainly to religion), no worse
than in China or Southeast Asia; closer; plenty
of physical resources.
I can remember still my surprise 25 years ago
when I bought a pair of knitted gloves at
Target and discovered they were made in
Paraguay. My first (and probably last) capitalistic
encounter with Paraguay. That's odd.