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NAFTA Effects | Jason E. Shao

NAFTA Effects 2

A decade later, a tempered vision of NAFTAIndustrial space that was once hotter than a jalapeņo pepper is cooling as companies that flocked to Mexico in the 1990s are looking to China, Honduras, Sri Lanka, and elsewhere for lower wages and better all-around conditions. Overall, the number of jobs in Mexico’s so-called maquiladora assembly plants, while still well above what they were when the revolutionary free-trade agreement took effect in January 1994, are down more than 20 percent from their peak three years ago. [Christian Science Monitor]

It seems that many of these free trade arrangements include forcing our trading partners to guarantee the protection of our intellectual property while protecting our agricultural subsidies. If the trade laws were rewritten without the subsidies, I think most of critics concerns would be addressed as we’d see more of the benefits being distributed to the poorer agricultural workers in our trading nations.

p(update). “(extlink)A Taste of Our Own Poison”:http://www.wired.com/wired/archive/12.01/view.html?pg=5 – When America was poor, its citizens “stole.” We took the intellectual property of Dickens and other foreign artists without paying for it. We didn’t call it stealing, but they did. We called it a sensible way for a developing nation to develop. Eventually, we saw it was better to protect their rights as well as ours – better because we had rights to protect elsewhere, too. But we only imposed this burden on ourselves when it made sense to do so. Until 1891, we were a pirate nation … A block of powerful developing nations should first take a page from the US Copyright Act of 1790 and enact national laws that explicitly protect their own rights only. It would not protect foreigners. Second, these nations should add a provision that would relax this exemption to the extent that developed nations really opened their borders. If we reduce, for example, the subsidy to agribusiness by 10 percent, then they would permit 10 percent of our copyrights to be enforced (say, copyrights from the period 1923 to 1931). Reduce the subsidy by another 10 percent, then another 10 percent could be enforced. And so on. [ “(extlink)Wired”:http://www.wired.com ]

I like Lessig’s proposal on a number of levels. It uses the power of American lobbys to pressure our lawmakers. It can be implemented automatically, with concrete provisions for repealing it or re-enacting it. It truly addresses one of the greatest problems in poor countries, and protects their sovereignty. Simple, elegant.

p(update). “(extlink)Free Trade is not Free”:http://www.meskill.net/archives/000515.html – “There is no job that is America’s God-given right anymore,” HP chief Carly Fiorina said. “We have to compete for jobs.” To which my friend offered, that he thought it rather noble of Carly to suggest that she and other USA C-level executives should have to compete for their jobs with offshore executives who would most likely work for millions less in annual pay. [ Judith Meskill ]

The biggest problem with creating jobs seems to be the high per-worker costs that you pay in America due to our employer-funded healthcare system. If we could have some rational debate on a real national healthcare policy, the cost of hiring American workers would drop quickly and I think the higher productivity and ease of hiring American would win out quickly.

2 thoughts on “NAFTA Effects

  1. Blake Jan 7,2004 4:53 pm

    I very much agree with your suggestion that the U.S. reduce the pressure on less developed countries to adopt our intellectual protection laws and tolerate the massive subsidies to agriculture. The EU’s Common Agricultural Policy (CAP) is an even bigger problem. It has turned the EU from a net importer of agricultural goods into a net exporter. Even their efforts to ‘de-link’ subsidies from production will not solve the problem that the subsidies hurt the poorest farmers in the developing world.

  2. Jason Shao Jan 8,2004 1:00 am

    We’re simultaneously protecting our main industries and hurting many developing countries where the main industry is agriculture. If we were to allow our subsidies, but also allow countries like South Africa to commission generic drugs to attempt to solve their unbelievable AIDS epidemic, it seems we’d be in a stronger moral position.

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