Do you like the trade agreements or was it better when we had manufacturing?

Question

Since the trade agreements took affect the economy seems out of balance and people seem to have less money working these service jobs, would you put it back and have tariffs and manufacturing jobs again or keep it how it is?

Answer 1

Trade agreements have nothing to do with job loss in manufacturing. The fastest pace of manufacturing job loss is in fact observed in China, even though China's industrial output rises very quickly. The estimates I saw suggest that China loses between two and three milllion manufacturing jobs every year.

The real reason for job loss in manufacturing (and not just in the U.S. or China, but worldwide) is the fact that manufacturing is much easier to mechanize and automate than services. Computer-controlled machine-tools and robots can machine, weld, paint, and assemble just fine. But they cannot flip hamburgers, teach middle school, or empty bedpans in hospitals. A doctor today sees as many patients per day as a doctor in 1906. A teacher today actually has less students than a teacher did in 1906. And oh by the way, how many dental hygienists were there in 1906?

A very similar thing happened to agriculture. In 1870, half of the U.S. workforce was employed in agriculture. By 1920, the percentage dropped to a quarter. Now, it's about three per cent. As output rose, labor was working with greater and greater amounts of physical capital. As a result, there was less and less need for labor in agriculture, and workers kept moving away into the cities...

Answer 2

All that money leaving this country and it's not coming back. The writting is on the wall. Free trade is our demise and everyone knows it. Did foreign countries purchase these trade agreements? Did anyone in this country get some big fat pockets for this? I wonder why it wasn't put up for a vote by "We the People". I bet if we voted on this issue the Free Trade Agreement would be non-existent today and there would be a lot more manufacturing in this country.

Answer 3

I like the trade agreements. While there are always temporary downs as well as ups, we all gain from freer trade on a global basis in the long run. I believe that free trade is the long term most important remedy for the world's imbalances of poverty and wealth.

If we open our market which is the largest in the world to other countries they are given the chance to pull themselves up from poverty. While this may disrupt some of our sectors it is not a zero sum game. When poverty stricken Chines and Indians are making money they can purchase our products and provide new markets for our technology etc.

I know this sounds altruistic, but let me provide a factual historical example. Many are worried about products imported from China because Chinese labour is cheap. It is argued this damages american manufacturing and endangers jobs.

Back peddle to the post ww2 years. At that time Japan was in ruins and the Japanese were poverty stricken. They began manufacturing plastic toys etc and exporting them to America. This disrupted our manufacturing and it was argued that Japanese cheap labor was exploitation .We should have tariffs quotas etc. Same arguments as today. We allowed this Japanese recovery with whatever dislocation caused here.

Fast forward 50 years. Japanese workers make high wages and export excellent automobiles and electronic products. They import products from all over the world. What about us? All the dire predictions of the fifties did not happen. Under the pressure of this competition, we improved our productivity and technology. In this period America has prospered even more than Japan. Trade is never a zero sum game

It did not happen without pain to certain sectors, but in the long run the impact of world competition makes us more productive and maintains and improves our economic level.

Wars are inevitable as long as great portions of the world live in poverty without hope. Is there any solution?, perhaps not, certainly not in our generation. Sending aid may be useful but allowing them to sell to us in those areas where they have competitive advantage, raw material or cheap labor, is the best long term answer. Well fed people with education for their children do not want war.

Look at Europe today. In my early years and for centuries before. Europeans were always at war. today with the free trade European Union they have ended this situation.

There will always be those who get hurt by free trade and so progress to a free trading world is going to be start and stop. the optimistic part is the distance we have come in the past 50 years. Gives me hope for a better world for future generations.