There but for the grace of the trade negotiators . . . | Bleader

Tuesday, September 12, 2006

There but for the grace of the trade negotiators . . .

Posted By on 09.12.06 at 06:27 AM

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One of the great things about blogs is that when people argue enough, they wind up explaining themselves more clearly than before. Dean Baker's "Beat the Press" is an economist's critique of media coverage, which recently led him to make a point that (as far as I recall) neither free-traders nor protectionists have highlighted.  (Baker's actually arguing with David Brooks here, but I don't care much about Brooks.)

"The fact that some types of labor (e.g. factory workers and custodians) have been subjected to international competition through globalization, while other types of labor have remain largely protected from competition (e.g. doctors, lawyers, economists, and newspaper columnists) was not an accident. It was a deliberate decision by U.S. trade negotiators from both political parties. Trade deals like NAFTA were designed to place U.S. manufacturing workers in direct competition with manufacturing workers in Mexico. To do this, the treaty includes extensive rules on investment, providing the insurance that U.S. corporations needed to set up factories in Mexico. They also got assurances that the output from these factories could not be blocked from the United States by future tariffs or safety and environmental regulations imposed at various levels of government.

"Instead of focusing on removing barriers to trade in manufactured goods, our negotiators could have structured NAFTA to remove the barriers that prevent smart kids in Mexico from studying to become doctors, lawyers, economists, and columnists in the United States. Just as manufacturing workers in Mexico are willing to work for much lower wages than their counterparts in the United States, so are professionals in Mexico.

"If our negotiators sought to remove the barriers that prevented competition from professionals in Mexico and other developing countries, the U.S. economy would benefit from an enormous influx of talented professionals (educated to U.S. standards). This would lead to much lower prices for health care, education, and all the products in which the cost of these professional services are a major factor. . . . This trade policy would have led to enormous economic gains to the United States, and it would have promoted equality rather than inequality."

It certainly would've radicalized the professional class. 

Read the whole thing.  


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