Tag: NAFTA

GLOBAL ALLIANCES, FRIENDS, AND ENEMIES

 

Two horses running in front of a sunset.
Global alliances should be more than military alliances. They should also be reciprocal open, free trade alliances to be effective.

The United States of America is involved in numerous global alliances that are military and defensive in nature. Unfortunately, most of our military allies are not necessarily economic, free trade, allies, partners, or friends. When it comes to international trade and economic agreements, the unstated contention of President Trump is that the United States is primarily confronted by international trading opponents or enemies. In my opinion, true global alliances should be totally reciprocal, politically, economically with respect to trade and monetary policy, and militarily. After all, true allies or friends don’t take unfair economic and trade advantage of allies or friends. Allies do not drain the economic resources and strength of their allies.

The North Atlantic Treaty Organization (NATO) is one of the largest military alliances to which the United States is a signatory. My contention is that the majority of the military allies in NATO are not economic friends of the United States. The European Union (EU) members of NATO, members of the North American Free Trade Agreement (NAFTA), and other trade partners act more like economic enemies. The same could be said of most Pacific Rim military allies. The Chinese, North Koreans, Iranian and other Middle East countries, and socialist South American nations are also trading advisories. With trading friends like these, who needs trading enemies?

Consequently, when our so called global allies threaten to challenge our proposed tariffs at the World Trade Organization (WTO), we should immediately challenge their existing tariffs, trade barriers, and subsidies to selected industries that provide a competitive advantage for their products on the world market with the WTO. To protect our agricultural products, if allies place barriers or tariffs on our agriculture products, we should not allow competing products into our nation to protect prices for our farmers. With the largest economy in the world, our allies need to trade with us more than we need to trade with them. Again, truly strong global alliances are fully reciprocal.

When critics and global free trade proponents say that it is bad policy to start trade wars with allies, they fail consider the possibility that military allies are not necessarily economic or trading allies or friends. These allies are already waging a trade war with the United States. They also fail to acknowledge that global free trade is a myth. Military allies that levy tariffs that are ten times what the United States levies on the same category of goods or erect trade barriers for United States products or commodities are not economic or trading partners and allies. Military allies that fail to contribute equitably to their military obligations within global alliances are questionable allies. Free trade and military obligation should be reciprocal in all areas.

The Merriam-Webster, On-Line Dictionary definitions of two terms related to this discussion are relevant. Globalism is defined as “a national policy of treating the whole world as a proper sphere for political influence.” Influence is defined as “to affect or change without use of direct force or authority.” In my opinion, globalism is currently used most often in reference to global trade or the global market that is not characterized by free trade. The reality of international trade is that the United States has little significant influence that positively affects our economy, manufacturing, labor force, and personal or family income. That is why the United States has a huge trade deficit. That is why President Trump is renegotiating most of our international trade agreements and putting America first. Consequently, globalism only applies to military and defensive alliances but not to economic and international trade agreements.

In my opinion, it is time that our global alliances are composed of military allies that are also our economic and international trade allies rather than our economic and international trade adversaries. Our allies need to stop depending on the United States to finance their defense needs and economies in general. The world needs open, fair, reciprocal, and truly free trade.

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THE PROGRESSIVE GLOBALISM CONTRADICTION

 

A cartoon of people standing on top of a globe.
The progressive globalism contradiction is global wealth redistribution from US laborers to foreign laborers.

The goal of global wealth redistribution, globalism, is contradictory to the progressive goal of wealth redistribution within industrialized capitalistic countries. From the beginning of the Industrial Revolution, progressives struggled to increase the wages of the lower and middle classes, the primary work force. Activists on the left called themselves communists, socialists, progressives, and liberals depending on which term was more acceptable to society at large at the time and location involved in the world. These activists were essential to the success of the labor movement in Western Europe and North America. As a result, the wages and benefits of Western workers became the envy of the rest of the world. The contradiction, for progressives, is the fact that Western wages and benefits have resulted in comparatively high disposable income and standard of living in the industrialized Western world. For globalism, global wealth redistribution, to succeed, workers in industrialized countries must expect wage and benefit stagnation at best or decreases in their standard of living through reduced disposable income. In other words, the left gives and the left takes away, the left’s globalism contradiction.

As industrialization expanded to other regions of the world, specifically the Asian-Pacific rim countries and China, global competition also increased. Initially, lower wages and benefits in these regions allowed Asian automakers, consumer product producers, as well as Chinese steel and other consumer good producers to compete effectively in Western European and North American markets. Additionally, the fall of the old Soviet Union brought capitalistic enterprise and increased industrialization to Russia and Eastern Europe which allowed additional low-cost consumer goods to enter Western markets. The result was that Western manufacturers faced competition from newly industrialized areas where wages and benefits were lower than those in the United States and other Western countries. In the United States, our manufacturing plants, steel and special metal mills, textile mills, and consumer product manufacturing plants were old and outdated. The cost of updating these facilities as well as the time required for licensing and construction and the high cost of construction labor made new manufacturing plants even more time consuming and costly to bring on line. The time and expense of environmental impact and economic assessments adds significantly to the time required and the expense of constructing new modern manufacturing facilities.

Faced with low cost competition and the rapidly expanding global market, the globalism contradiction forced corporations to make decisions regarding manufacturing plant locations. The result was plant closures in the industrialized parts of the United States and new plant construction around the world to replace facilities closed in the US. These decisions have adversely affected the number of manufacturing jobs available, wages, and benefits in western countries like the United States. As a result, middle and lower working class wages and benefits have been at best stagnant or declining for at least two decades.

The final globalism contradiction is related to free trade agreements like NAFTA and TPP. When these agreements result in excessive trade deficits for the United States, they are effectively global wealth redistribution. This fact is contradictory to conservative ideology. Although US consumers purchase goods at a lower price, the value of the good paying jobs we lose in the exchange is roughly equivalent to the value of the trade deficit. The free trade competition results in lower cost consumer goods, but we lose good paying manufacturing jobs due to the high costs associated with US manufacturing. From the perspective of the left, opening factories in developing countries is great. Capital is redistributed from developed industrialized countries to underdeveloped Third World countries creating good paying jobs, more disposable income, and increased standard of living, global wealth redistribution. Of course, leaders and planners on the left do not discuss the sacrifices this global wealth redistribution inflicts on the middle and lower class workers of the more advanced industrialized countries. They stress that the top 1% are not paying their fair share of the costs they inflict on our workers. The question is, are workers in the United States satisfied with the answers provided by the Left?

On his last overseas trip, President Obama indicated that globalism has not leveled the world playing field as quickly as he had hoped. The 2016 election demonstrated that workers in the United States are not interested in sacrificing their standard of living to advance global income redistribution. It was the progressive globalism contradiction, stagnant or declining wages and employment in the United States, that cost progressives the Presidency in the 2016 election. This debate will be critical for the future of our country. This issue among others at this point in time and our history places us at America’s Crossroad.

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