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How ‘Free’ is Free Trade for the West?

How ‘Free’ is Free Trade for the West?

Wyoming and much of the intermountain West is currently experiencing an economic boom. Jobs are hard to find and state coffers are filling up. And although the benefits of this “boom” are incredibly uneven (this is the 1st recovery in modern history where corporate profits consume the lion’s share of the economic “recovery” while wages have stayed relatively stagnant), it is hard to imagine that there might be hard times in the future.

Which brings me to the issue of free trade and outsourcing of jobs. This issue not only affects Westerners today, it will have a crucial impact on their future and their children’s future.

It seems as if today’s strongest proponents of free trade believe that corporate profits and cheap prices are the only results that matter, minimizing the impact on people. Trade does not exist in a vacuum. It is a complex issue that defies simple, ideological answers.

Proponents of “free” trade tell us we should let other countries do what they do best, and we in the America should concentrate on what we do best. But there is a big difference between doing things more efficiently and simply doing things cheaper. Perhaps China or Guatemala can make t-shirts cheaper than we do (due to workers earning a few dollars a day), but who really thinks they inherently do it more efficiently?

Large corporations, by nature, are responsible to their owners, otherwise known as shareholders. They tend to have a very narrow scope for defining self-interest and success: increased profitability and increased “shareholder value”. For example, all other things being equal, if a company can pay a well-educated engineer in India $5,000 for the same job that pays $65,000 in the US, over time, acting rationally, it will move jobs over to India in the interests of making more money. While this increases that company’s bottom-line profit margin, it does not benefit the engineers who live in the US. However, to paraphrase an old saying, what is good for large corporations is not always good for individuals in America.

Until such time as wages and conditions equalize across the planet, we in the US will pay a steep price for having developed a higher standard of living. The truth is that the unprecedented and incredible success of the American economy was made possible by public contributions and the role of government in developing the public infrastructure that laid the foundation for our country to become a world leader. Things like roads and rails, anti-corruption laws, regulatory oversight, minimum wage laws, child labor laws, environmental laws, etc.

I find it interesting that free trade proponents argue that protecting workers or the environment or the rule of law limits the benefits of such agreements. Yet, how many people are aware of the fact that NAFTA, the North American Free Trade Agreement, contains copyright and intellectual property profit protections for corporations, yet no real protections for the people or environment this Agreement will affect. Amazingly, NAFTA also contains protections for foreign corporations that let these companies sue our government; they argue their case not in open court, but in secret panels in front of groups like the World Trade Organization, which then can award unlimited damages to these foreign companies paid for by the taxpayers of the United States.

“Free” trade without protection for workers (both here and abroad) is a bad choice. “Free” trade without the rule of law and comprehensive support for those people displaced by outsourcing and job losses is a bad choice. “Free” trade that does not require other countries to play on the same level playing field as the U.S. is a bad choice. Finally, “free” trade without regard to ensuring a sustainable long-term economy and the protection of our dwindling natural resources is a bad choice.

I support increased international trade. Trade that is “fair” as well as “free”; but let’s face it – true “free trade” is a myth. All nations utilize “managed” trade, opening up markets when desirable and protecting markets when deemed politically necessary. And doing things cheaper does not make it better. Let’s remember that the whole reason for our economic system is to benefit people. Wyomingites should not support “free” trade agreements that place the interests of corporate entities ahead of the individuals in our society and the future sustainability of our world economy and environment. Because, in the end, what matters most is the impact this has on the hard working people of Wyoming and our country.

Gary Trauner is a family man, businessman and entrepreneur who moved to Wyoming 18 years ago and lives in Wilson with his wife Terry and their two young boys. He ran for Wyoming’s lone seat in Congress in 2006, narrowly losing to a 6-term incumbent.

About Gary Trauner

Comments

  1. Mark says:

    Very interesting Gary. Thank you. I hope you consider running for governor in 2010 when Gov. Dave is term-limited. I think you would have a great shot to win (probably better than winning a seat representing WY in Congress as a Dem) and would do a tremendous job!

  2. ende says:

    “The truth is that the unprecedented and incredible success of the American economy was made possible by public contributions and the role of government in developing the public infrastructure that laid the foundation for our country to become a world leader. Things like roads and rails, anti-corruption laws, regulatory oversight, minimum wage laws, child labor laws, environmental laws, etc. ”

    Wrong.

  3. Chris V says:

    Most of us get no benefit from protectionist limitations in “free” trade agreements, such as copyright, intellectual property, and patent protections. Most of us would actually be better off without these protections since they’re the main reason we pay so much for goods. In many ways, most of us are less protectionist than the business lobbyists.

    However, when a trade amendment comes up that could benefit us, such as limitations which equalize the environmental and labor laws of third-world countries with our laws, the pro-business lobby whines “protectionism”! The choice they give us is either lose your job or turn our community into a third-world dump so we can compete better.

    It is despicable that pro-business lobbyists throw the protectionist label on any trade limitations they dislike, but are completely silent when it comes to trade protections that benefit them. Business lobbyists are just as protectionist as the fair trade group. We need to throw their immoral hypocrisy in their face every time they bring it up.

  4. J.Carson says:

    Let see if I have this straight, global free trade, will eventually, (At some unspecified point) more or less equalize income, public infrastructure, personal freedom and all the good things that the First World now enjoys, across all nations and peoples of the world. That is why we are told that it will be “A Good Thing”, Right?
    This would be good news if actually true. I mean we don’t need to wait for the rest of the planet to get in on the act. look at it this way, if this will work planetwide, it would work just as well if it were only the US involved. On a scale of BIG, the US is pretty much in the same league as the whole rest of the globe. 300 million verses 6 billion is pretty large anyway you look at it. In terms of population, the rest of the world is only about 21 or so times larger than the US. If the plan is gonna work for 6 billion or more, surely it would scale just as well for 300 million? I mean, it might take 4 or 5 years to get everything organized, but we should be able to seal the borders and take care of America’s business and needs all by ourselves, right? No need to to get involved with with people and situations that really have no bearing on our daily lives and necessities.
    Or is “Globalization” just fatcat doublespeak for ” Plantation Owner”?

  5. Marion says:

    Jobs are hard to find?????? What kind of jobs is he talking about? Wyoming has one of the lowest unemployment rates in the country. Maybe if he reads Wyoming news instead of NYC news he’d know that. Jobs are so hard to find in this state, over in Thunder Basin they even tried to recruit some of the guys on their way to Sturgis last year.

  6. Inky says:

    Yes, Marion, there are jobs in Wyoming, but what kind of jobs? Outside of coal (which has long-term supplies, but major problems fitting in a global-warming adverse economy), this energy boom is gonna run out some day because the resources are much more finite than our world-class coal deposits.
    These new jobs are keyed into a boom economy, not a long-term, sustainable economy. Then there’s all the secondary and tertiary jobs — restaurants, real estate, oil patch service companies, retail, banking, construction. They too are riding high on the boom, but what happens when the bust inevitably comes?
    It’ll be like the last boom ‘n bust cycle, deja vu all over again.
    What’s happening is that once again, the rest of the country is treating Wyoming like the natural resources colony we are — there to be drained of resources (oil, gas, coal, kids) and abandoned when we’re drained dry.

  7. Mike S. says:

    Good-paying jobs are hard to find in Wyoming if you don’t work in the energy sector. And the coal and oil and gas ain’t going to last forever. Until we get serious about planning our own infrastructure, our kids will continue to grow up and move to places that actually care about the future of their citizens.

  8. Marion says:

    Exactly what kind of jobs is it that you want available? Enviros don’t want ranching, not sure about farming, don’t want energy production, just what is it you think should be available? The Lord knows we don’t need more politicians, more enviros, more professional recreationalists. I don’t think there is a lack of jobs in the service industry, so I’m not sure what it is you think is lacking. I know there is no lack in the health care sector, we need both doctors and nurses, and midlevel providers everywhere.

    Many of the jobs you say are keyed into the boom economy are held by folks coming here from out of state, who will follow the next boom. However if you think the need for energy is going to go away anytime soon, you believe global warming is going to do away with the need for heating homes in the winter a lot more than I do.

  9. Gary Trauner says:

    Marion –

    This isn’t about reading “NYC news” – I’ve lived here for 18 years now and my kids are born and raised here. You say we need less politicians – I think we need less people who call others names without any basis for doing so. Politicians simply learn what works from the people.

    This country has lost 3 million private sector manufacturing jobs overseas since 2000, replaced by low wage service jobs with minimal benefits. Job creation since 2000 in this country is the worst it has been since Herbert Hoover. The energy industry WY accounts for less than 10% of all the jobs in the state (by the way, government is Wyoming’s biggest employer).

    Again, the real issue is simple. If you think that the owners of large corporations and their management teams deserve the bulk of our economic success and growth, then you should be happy with what is going on. If you think that average workers should reap some benefit from their hard work in making our economy a success, then this “recovery” should have you very worried.

    The point of my piece is that as long as countries don’t play on the same level playing field as we do (i.e., with the same laws, restrictions, etc.), then citizens of neither country actually gain. It is a net loss situation – the winners are non-state corporations who amass the wealth and benefits accruing from the work of these citizens.

  10. Marion says:

    Mr. Trauner, you may have lived in Jackson for 18 years, that is not the same as living in Wyoming for 18 years. Believe me the rich folk who moved to Jackson are nothing like the rest of us, we don’t’ think alike even.
    People were disgruntled with Barbara Cubin, but not impressed with a transplant to Jackson. I Can see why you think there is such a gap between the haves and have nots living there. the dirty little secret is that many of the folks waiting on you in restaurants, driving your buses, doing your yard work, cleaning motels, etc are living in their vehicles or in tents in the forests, trying to stay ahead fo the rangers.
    Ease up on some of the restrictions that provide habitat for the witchy-watchy, and provide some habitat for the workers in your own community. Do that without going to the taxpayers for subsidies that end up in the pockets of the already rich living there, and next time an election might be different.
    As for the rest of us, we work with what we have. God gave us land to raise food for a nation, minerals to provide heat, fuel, and electricity also for a nation. We work with those things. Maybe we aren’t sophisticated enough to have nice a steady industry like the silicon valley, but we appreciate what we have and can do without enviros trying to keep us out of our forests.
    Whether you want to admit it or not, the stock market tells me that a lot of ordiary folks are doing very well. In fact another good indicator is the sales of electronics, not the least of which is HD tvs. A lot of them are being sold, so someone is making some money.

  11. Balaji Viswanathan says:

    Having lived for the last few years in America, I could understand the concerns and panic caused by free trade. A lot of countries artificially depress their currencies and do other things that could cause a lot of job loss or wage reduction in US. While I believe job loss is bad, I believe nominal wages are due for a correction that is already happening.

    Why should a programmer doing something as mundane as writing some 100 lines of HTML code receive 5 times more wages than a farmer? Why did an auto mechanic in 1980s Detroit receive a wage worth tonnes of steel and thousands of gallons of gas? Same with a lot of other jobs like doing some simple accounting, answering phone calls and other things that fetched sky high prices in US once upon a time. Why? Because, billions of people were totally cut off from technology and financial change that happened throught the 19th and 20th centuries. This was an unusual aberration, as those billions of people were thick in action since the start of the civilization. Now, things are getting back to normal and those billions of people are coming back to the market and the artificial scarcity for programmers, mechanics, phone answerers is getting removed and sky high wages are depressed.

    This artificial scarcity for simple human labor had also brought a toll on the environment. Americans found it much more cheap to junk a massive machinary, drive thousands of miles in hummers than to utilize simple human labor. Now, with rebalancing these core industries that formed the backbone of civilization for centuries like Corn, Sugar, Oil, Steel, Copper are appreciating again and wages are depressing without causing job losses.

    Though the wages are going down, people have potential to get medical treatement for one-tenth of costs, get cheap electonics, computer hardware and sofware for their small businesses that can give them potential to prosper, get cheaper legal and investment advises and ability to call human services through phone 24hrs/day without any additional charge, apart from being able to afford clothing and entertainment through Wal-Mart and others. So what is the problem?

  12. YAZ says:

    Marion –

    Firstly, as a proud, fellow Wyomingite (as is Mr. Trauner), I can appreciate your opinion and love for this great state. Unfortunately, I don’t feel that you have a realistic view. You seem to be suggesting that we can isolate ourselves from the rest of the world and internally sustain our own needs. That’s simply no longer in the cards. We live in a global economy where nations are becoming increasingly interdependent. It’s time that we realize this and position ourselves to compete in the global marketplace (primarily through improved education). By isolating ourselves, we are merely delaying the inevitable while impairing our ability to compete in the international community.

    Secondly, you may not support Mr. Trauner or his choice in residence but Jackson Hole is just as much a part of Wyoming as wherever you may reside. It brings tourists to the state and diversifies our sources of income. It’s a beautiful area and I don’t feel that degrading it as out of touch with the rest of the state is a completely fair statement.

    Lastly, your gauges of economic growth (HD-TV sales and the stock market) are exactly accurate or sustainable. Neither take into account the current negative savings rate and the fact that people are essentially using their homes as ATMs machines. I believe that we have yet to see the true long term effects of these actions.

    PS – I recommend that the next time that you write a post, you try to include a less biased tone. It might just give your opinions a lot more validity.