The China Deal: If You Can't Sell It, Buy It

Tom Lehman TLehman at lor.net
Mon May 22 17:38:12 PDT 2000


Mike--About a year and a half after NAFTA became law a study came out titled NAFTA's First Year or something like that, it was a project of Cornell if memory serves me correctly. In this study the researchers attempted to demonstrate the number of times NAFTA had been used as a threat in labor negotiations. I may still have my copy of this study.

There is no clearinghouse for NAFTA or globalization threats that I know of; I don't know of any union that is documenting them either. It would be pretty hard to seperate the threats into catagories; like the friendly threat, the veiled threat, the humorous threat, the we are all in this together threat, etc.etc.

As I mentioned before, low interest rates and low energy prices have muted the effects of NAFTA on the bigger picture. With higher interest rates, higher energy prices and huge trade deficits NAFTA will become more of a bone of contention in the future; adding China PNTR/WTO on top of it will only make matters worse.

One thing that I have noticed is that since George has become more outspoken and has advocated more independent political action by the Steelworkers, all of a sudden some of the longer term wrongs inflicted on Steelworkers by various corporations are now being addressed by the courts in our favor!!!

Tom Lehman

Michael Pollak wrote:


> On Mon, 22 May 2000, Doug Henwood wrote:
>
> > >If I understand it correctly, the comparative advantage argument is that
> > >that extra money is not only spent on other things that wouldn't otherwise
> > >have been bought, but those things are produced by people that wouldn't
> > >otherwise have been employed -- so that even imports produce jobs. Do you
> > >and Mark agree that part's not true? If so, can you send me to a good
> > >critique of it?
> >
> > I don't think it's wholly untrue; Mark seems to think it is.
> >
> > Ricardo's world was one of immobile capital. In a world of mobile
> > capital, bosses can move plants or threaten to move plants to drive
> > down wages - the job loss and wage depression argument.
>
> Let's see if I've got this straight. The comparative advantage argument
> is that imports are by definition cheaper than the products they replace,
> so consumers have more money to spend on more products that induce more
> jobs. But this job loss argument is simply that prices are lowered
> because wages are lowered because of the threat of moving. Do you think
> that part dominates nowadays? If so, I guess than Mark could respond
> that, according to classical theory, everything that lowers wages will
> increase employment. And none of that is a good thing, whether it comes
> from trade or from local oppression. So he could feel justified in not
> counting it on the credit side of the ledger. Eventually the low
> unemployment rate would drive up wages, but it seems that under this
> scenario it would always necessarily be less than wages were driven down.
>
> However, the culprit would then seem not to be trade but capital mobility.
> If we could increase the cost of moving we would diminish the threat.
> But it seems restricting imports would do nothing to diminish it, at least
> for industries with an export component.
>
> Michael
>
> __________________________________________________________________________
> Michael Pollak................New York City..............mpollak at panix.com



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