Central American Free Trade Agreement Bill

[Emsworth]

Maybe I'd be convinced that this provision did anything if proponents of CAFTA were not advertising that it will give us "cheap labor."

Perhaps you have a valid point, but one must bear in mind that what is cheap for a U.S. company may not be a low wage for a Central American worker.

[Q]

Bottom line: if this bill passes, yet more of Atlasia's manufacturing base will be siphoned to other countries.

Is that something we can afford?

[True Democrat]

Bottom line: if this bill passes, yet more of Atlasia's manufacturing base will be siphoned to other countries.

Is that something we can afford?

In this globalized economy, we cannot afford to not pass this bill.  We must open our ports.  We are no longer the fledgling nation of the 1800s that need high tarriffs.  Although there may be some negative effects in the short term, this will greatly benefit Atlasia's economy in the long run.

[Filuwaúrdjan]

In this globalized economy, we cannot afford to not pass this bill.

While I've yet to read through the proposed agreement and will not side with one side or the other until I have done so, I'm afraid I don't like that sort of arguement and I never have; to say that we cannot afford to pass a bill because of a short-term trend in World Trade without backing the assertion up, strikes me as being a little arrogant.

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Are our ports closed? Well with the tragic exception of the various ports in the New Orleans area, I don't think they are; we remain a massive importer and exporter of raw materials and finished products and will remain so no matter whether CAFTA is adopted or not.

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As I'm sure you are well aware, a lot of people would argue that there are other times where tarriffs are appropriate.
There seems to me to be a strong case for protecting some of our industries from foriegn pressures; and at the same time there seem to me to be a strong case for having free trade.
We have to strike a balance on trade, and I fear that this is something many on either side of this ancient debate have failed to do in recent years.

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How will it hurt us in the short term? Where will it hurt us in the short term? And when you say the economy, what part of the economy do you mean? I for one would not be prepared to vote for something that guts our manufacturing industries but gives a boost to the financial services sector... but I would perhaps be prepared to vote for something that causes some intial pain for manufacturing, but then results in sustained growth for what is a core industry for the nation as a whole, but for much of my district in particular.

[Emsworth]

I think that any effect imports from Central America would have on the Atlasian economy is not significant. Firstly, 80% of Central American goods already enter Atlasia duty-free, as I said earlier. The percentage is even higher for agricultural products; almost all of them enter this country duty-free. Secondly, the remaining 20% of tariff barriers will not be eliminated immediately, but will rather be phased out over the next several years. Overall, CAFTA's effects in terms of imports to Atlasia are relatively minor.

Much more important to our economy will be the result for Atlasian exports. People in Central America will be able to afford Atlasian goods, and will therefore buy more of them. This will be an excellent boost to several Atlasian businesses, and will create more economic opportunity.

Moreover, for those of you, honorable Senators, who are concerned about labor rights in Central America, this agreement would increase the prosperity of the Central American nations by promoting trade, thereby ultimately helping those very workers you refer to.

I would say that our history demonstrates that protectionism often does not actually benefit Atlasia. The Tariff of Abominations passed in 1828 adversely affected the economy by greatly increasing costs while decreasing revenues for businesses. The Dingley Tariff of 1897 led to extremely high consumer prices. Even more disastrous was the Hawley-Smoot Tariff of 1930, which probably contributed to the collapse of international trade, and the beginning of the Great Depression. Closer to our own time, when President George W. Bush increased the steel tariff to save 5,000 jobs in the steel industry, he caused the loss of over 25,000 jobs in steel-consuming industries. I submit, honorable Senators, that protectionism generally does not benefit the economy.

Did not the Founding Fathers, the Signers of the Declaration of Independence, criticize King George III "For cutting off our Trade"? Is it not an eternal principle of justice that the government should not be partial to one sector of the community at the expense of all others? Is it not a betrayal of our most fundamental principles of fairness to constrict the channels of commerce, to immolate liberty on the altar of protectionism?

[Filuwaúrdjan]

Having read through the proposed agreement, I could not find anything that would aid the manufacturing industry in my district or the numerous jobs and countless families it supports. I could, however, find parts of the proposed agreement that do the reverse; it might well be the case that much of the agreement is in effect in force already... but this does not change the fact that the agreement is likely to be harmful to the economic base of my district and to my constituents.

I also have concerns over certain other parts of the agreement; namely the section on labor which looks to be toothless to the point of uselessness. I'm not convinced that letting our companies invest in the public sector of these countries is a good thing either; I would much prefer these companies to invest in the private sector of economically depressed areas of our nation, and I'm afraid I have to question the motives of a company that would rather invest in the public sector of another nation's economy rather than aid the private sector of our economy.

So far the arguements in favour of this agreement have come in two forms; on the one hand an emotional and ideological appeal for Free Trade, and on the other simply claiming that the agreement doesn't really do that much and that in the long term we will benifit.
I try to take a pragmatic approach to trade; when one side of the arguement cannot come up with any more than that, then I'm extremely reluctant to side with their position.

All this considered, I'm afraid that I cannot vote for or support this agreement.

[Q]

The Vice President makes some very persuasive points, and the historical references to unsuccessful protectionist policies cause this Senator some concern.  However, absent specific economic data or projections regarding the impact of this proposed CAFTA, this Senator believes that maintaining the status quo in Atlasia's trade policy is a safer strategy, economically speaking, than embarking on an uncertain path by passing this bill.  Perhaps the Secretary of the Treasury could predict the economic fallout of this bill?

[Filuwaúrdjan]

Moreover, for those of you, honorable Senators, who are concerned about labor rights in Central America, this agreement would increase the prosperity of the Central American nations by promoting trade, thereby ultimately helping those very workers you refer to.

Increased trade doesn't really improve the lives of these low paid workers though; even if the overall economies of the countries in question grow as a result of CAFTA, the recent political and economic record of these countries suggests that the potential positive effects of CAFTA on the economies of these nations will not filter down to the people many of us in the Senate are worried about. If past form is a guide, things may even get somewhat worse for them.

[Filuwaúrdjan]

Is that something we can afford?

Absolutely not. The manufacturing industry is of vital importance both to Atlasia at large and to our struggling industrial communities.
Now is probably not the time to stick another nail in the coffin of Atlasian Manufacturing

[Emsworth]

Is that something we can afford?

Absolutely not. The manufacturing industry is of vital importance both to Atlasia at large and to our struggling industrial communities.

As I noted before, the manufacturing industry will not be too greatly affected by this agreement. 80% of the tariff barriers in question have already been lifted; the remaining 20% (which relate to agricultural products like sugar, not manufacturing) will be phased out over the next 10 years. While any effect for manufacturing will be miniscule, or even nothing, the effect for our businesses will be excellent.

[Q]

80% of the tariff barriers in question have already been lifted; the remaining 20% (which relate to agricultural products like sugar, not manufacturing) will be phased out over the next 10 years.

So this bill would only lift the approximately 20% of tariffs that remain, those covering agriculture only?  So it would be safe to say that Atlasia currently has no tariffs on manufactured goods?

[Emsworth]

So this bill would only lift the approximately 20% of tariffs that remain, those covering agriculture only?  So it would be safe to say that Atlasia currently has no tariffs on manufactured goods?

I should be more precise. A vast majority of tariffs on Central American goods (including electronics, mechanical goods, and most other manufacturing items) have been eliminated by virtue of the Caribbean Basin Initiative of 2000. This initiative is temporary; CAFTA would make the change permanent.

The remaining 20% of tariff barriers are related to "sensitive" businesses, like the sugar industry. These will be phased out.

I wouldn't say that Atlasia has no tariffs on manufactured goods; rather, almost all such goods from Central Ameria already enter Atlasia duty free, as far as I know.

[Filuwaúrdjan]

As I noted before, the manufacturing industry will not be too greatly affected by this agreement.

It's in enough of a mess as it is.

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From what I recall (and I could be wrong) CAFTA makes that permanant, right? So if CAFTA is rejected then then those earlier agreements would just run there course?

[Filuwaúrdjan]

I'm just wondering if any other Senators have actually tried to read it? It's quite a slog, but there are some very interesting little details in there; especially some of the exemptions.

[Emsworth]

We have had more than 24 hours without debate. Therefore:

The question is on final passage of the bill. All those in favor, say Aye; those opposed, say No.

[Ebowed]

It would appear to me that Senator Al had a comment to make regarding the exemptions in the bill much less than 24 hours ago.

However, if voting really has begun, which I believe it should not have, I obviously cast my vote in the negative.  I don't believe in encouraging outsourcing, especially with countries with questionable labor practices.  Yes, I realize CAFTA has some sort of enforcement of fair labor laws in it but the advocates of CAFTA are happy to get "cheap labor" out of the agreement-- I am quoting WalterMitty, a strong Free Trade advocate, from when the United States Senate voted on this bill.  As Mr. Mitty is pretty honest about his beliefs, I think I'll take his word on CAFTA.

Nay

[Emsworth]

It would appear to me that Senator Al had a comment to make regarding the exemptions in the bill much less than 24 hours ago.

I thought that was just a question, not substantive debate. However, as it appears that the Senate's interpretation differs, I will postpone the vote.

[Ebowed]

I would then like to take this oppurtunity to encourage free trade advocates to also oppose this bill.

In the Southeast, opposition to CAFTA is nearly unanimous.  We are seeing people from a wide range of political beliefs, from Jake to Bono to Cosmo Kramer to Brandon H all oppose this bill.  Add to this the liberal opposition in the Senate, and I think it's safe to say that liberals, populists, and ultra-libertarians have a consensus here.

While as a liberal, I argue against this bill for being an exploitation of Central America, I present the following arguments against the bill from a pro-free trade point of view.  As I am not pro-free trade, these are not my personal arguments, but rather why I think free trade advocates should join us in opposing this bill.

Free trade should not need treaties.  It appears to me, after looking over the text of the actual agreement, that this is more a bundle of regulations than something that will truly expand corporation freedom in Atlasia.  As Al has pointed out, there are some interesting regulations that do not really harmonize the spirit of free trade.

Second, this would essentially establish an international organization, a surrender of Atlasian sovreignty.  I doubt this is what any free trade advocate wants.

[Emsworth]

Free trade should not need treaties.

I would be glad to get rid of tariff barriers. Unfortunately, other countries aren't so likely to do the same. Hence, treaties are realistically necessary.

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That is not so. No sovereignty is ceded; our policy remains entirely within our control.

[Bono]

Free trade should not need treaties.

I would be glad to get rid of tariff barriers. Unfortunately, other countries aren't so likely to do the same. Hence, treaties are realistically necessary.

Most benefits on lowering trade barriers are on the party lowering them.

[Colin]

I would like to motion to put this bill to a vote.

[Emsworth]

The question is on invoking cloture. All those in favor, say Aye; those opposed, say No.

I would informally urge all Senators to vote in favor, as we have had plenty of opportunity for debate already.

[MasterJedi]

Aye

[Colin]

Aye

[Q]

Nay