July 13, 2007

Trade Agreements Unfair To US

Everyone said that when the first trade agreement was passed that American jobs would not be hurt or lost.

More than 3 million manufacturing jobs -- one out of every six -- have been lost during the NAFTA-World Trade Organization era. While American workers' productivity has soared, real median wages remain flat at 1970s levels as the NAFTA-WTO globalization model subjects U.S. workers to a global labor arbitrage where the clearing price is the misery of $1-per-day wages.

Meanwhile, our current trade model has resulted in a nearly $800 billion trade deficit which, at 6 percent of our national income, threatens U.S. and world economic stability.


And it's not just jobs that have been lost, the trade deficit grows everyday.

Two-thirds of the country's $88 billion trade deficit with Japan in 2006 was auto-related, in large part because of the 2.4 million vehicles imported. Imports could reach a nearly 20-year-high this year, based in part on stronger demand for Japanese vehicles here, according to estimates by U.S. automakers and lawmakers.

Two-thirds of the trade deficit with Japan is automotive related.

Now I know your going to say, well maybe the Japanese just don't want American vehicles.

We won't know if that is true because american automotive manufacturers are extremely limited on the number they are allowed to sell in Japan, this is done to protect the Japanese automotive manufacturers.

Japan imports more vehicles in the US than it sells in the US.

Japanese auto exports to the United States rose 13.7 percent during the first six months of 2007, .....while sales of U.S.-built vehicles from Japanese manufacturers rose only 2 percent.

Why is that, because the Yen is undervalued and allows a huge cost advantage to import vehicles into the US rather than build them here. It also allows a cost advantage in that the Japanese imported vehicles can be priced down thousands of dollars making them cheaper to buy then the american vehicles.

A weak yen makes Japanese exports to the United States less expensive and U.S. imports to Japan more expensive. Domestic automakers say it amounts to a $4,000 to $10,000 subsidy on Japanese vehicles sold here.

So while Japan is importing hundreds of thousands of cheap vehicles in the US, the US is limited greatly in the amount of vehicles it can sell in Japan.

Congress must stop making trade agreements and enforce the ones in effect so that free trade is exactly that and not one sided.

Posted by Quality Weenie at July 13, 2007 12:14 PM | TrackBack

I hate NAFTA.

Posted by: Ogre at July 16, 2007 10:40 AM