Free Trade

http://economix.blogs.nytimes.com/2011/10/12/whose-jobs-are-at-risk-in-free-trade/?emc=eta1

http://www.nytimes.com/2011/10/13/business/trade-bills-near-final-chapter.html?emc=eta1

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"To be able to concentrate for a considerable time is essential to difficult achievement." (Bertrand Russell)

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While I know that there is a strong possibility that I am speaking to soon, the NY Times reports that there may be a deal in Congress to approve trade agreements that have been held up because of union objections. Trade agreements with South Korea, Columbia and Panama (as well as a benefits package for workers who lose their jobs to foreign competition) appear to have bi-partisan support.

According to a new report just released by the Joint Economic Committee of Congress ("Nowhere to Go...") which can be reviewed by clicking on the "Economix Blog" attached, the workers most likely to lose their jobs as a result of increased trade are older workers and those without a college education. The most obviously affected industry has traditionally been manufacturing, where workers tend not to have college degrees and an increasing number tend to be 45 or older.

Free trade agreements eliminate tariffs and other policies designed to protect the participating nations. Economists generally predict (well, right there we have a problem) that free trade deals create a larger common market for participants, increasing sales and reducing prices. But, while consumers may benefit from the availability of cheaper foreign goods, American workers (who make up a more costly labor force) often lose jobs as a result of less costly imports.

The modestly projected increase in demand for U.S. goods (from these trade pacts) will come mostly from South Korea which, as the world's 14th largest economy, would join a short list of developed nations that have free trade agreements with the U.S: Australia, Canada, Israel and Singapore.

While I'm sure that American car companies will now be able to sell more cars in South Korea, I worry that jobs will be eliminated in the U.S. textile industry because of increased imports from South Korea.

Free trade is good. Tariffs are not good. But, job eliminations aren't good either.