Latinamerican trade surplus with US tops 100 billion

[bemildred]

With oil exporters Venezuela and Mexico leading, Latin America and the Caribbean posted a 100.8 billion US dollars trade surplus with the United States in 2005, up 32.2% percent from the previous year, reported Friday the U.S. Department of Commerce.

Latin America and the Caribbean accounted for 17.5% of all goods and services imported by the United States, up slightly from its 17% share of 2004. But the region accounted for a significantly lower percentage of U.S. exports, 13.2%, compared to 21% in 2005.

Venezuela's trade surplus with the United States rose to 27.6 billion last year, compared with 20.2 billion in 2004. Mexico jumped to a 50.1 billion surplus in 2005 from 45 billion the previous year. Brazil's trade surplus in 2005 was up almost 2 billion to 9.1 billion, and Argentina posted 472 million US dollars surplus compared with 357 million in 2004.

MercoPress

[NMDemDist2]

1. yeah, NAFTA and CAFTA really helped out us US workers huh?

:sarcasm:

[VirginiaDem]

2. That was fast!

The West is either damned if we do or damned if we don't: underdevelopment is blamed on capitalism and the north and the inability to get fair trade terms; when countries start to develop (see India, China, your post), capitalism is blamed for hurting the US economy.

This surplus is good news for the hundreds of millions of Latin Americans who will benefit from this rare trade surplus. The fact that it may be cyclical because it's due to oil is worrisome. I would assume that the benefits are accordingly not spread evenly among nations. So maybe it's just good news for the Venezuelans, Mexicans, Ecuadorians, and other oil producing nations.

[NMDemDist2]

4. may I suggest you do some research on the WTO? something is wrong

if poor south Korean farmers and Steel Workers from the USA are both protesting......

[VirginiaDem]

6. Who mentioned the WTO?

Which, by the way, I have done research on. In fact, it's part of my dissertation. Having said that, you didn't address the meat of my objection--that the anti-trade crowd has a habit of only focusing on the bad news. Of course, we have to point out the bad news but it's just not cricket to instinctively ignore the positive effects of a Latin American surplus on Latin Americans.

[Solon]

8. We aren't anti-trade, only anti-"free" trade...

There is a difference there that distinguishes between what Neo-Liberals want and the people want in their various nations. Why people think that if you are against the unfair sanctions placed upon nations for the benefit of foriegn corporations("Free" Trade) means you are an isolationist, I don't know.

Besides which, countries that have bi-lateral "free" trade agreements between them and the US, or are under NAFTA haven't been fairing so well. We have had huge increases in migrant workers from Mexico lately, could that have anything to do with the disappearing of local economies since NAFTA was ratified? Venezuela is slightly different, their government is using the oil they export to the United States to invest into schools, agriculture(that has to be rebuilt) and other social programs that improve the lives of the people living there. Many other nations in Latin America also have recently elected governments based on anti-free trade planks in the hope that Bolivia's and Argentina's disasters are not repeated.

[VirginiaDem]

11. Í have to be careful and consistent with my terms.

I'll admit that. Anti-free trade (with or without scare quotes) is good enough. I would consider myself a free trader but not a neoliberal, if that makes any sense. Neoliberal Washington Consensus folks stressed things that shouldn't have been stressed--privatization, decreased public spending to keep inflation low, etc. I'm all for maintaining public spending and subsidies designed to help the poor (as opposed to subsidies designed to protect domestic goods). While I have problems with Chavez his program to spend oil revenues on the poor I support.

I'm for free trade in that in the long-run everybody benefits from trade so dropping barriers is a good idea. In the short run, both nations benefit from trade economically; however, those involved in relatively scarce sectors are harmed. The US is relatively labor scarce (and relatively capital and land abundant) so labor is harmed by free trade. But consumers benefit enormously and labor is better off in the long run as economies adjust.

There are new growth industries that US workers will move into--biotech, clean energy, etc. If only this administration would support research and investment in these sectors rather than playing to their fundie brethren.

[Solon]

12. Lowering tariffs and such is one thing, interfering with soveriegnity...

However, is a whole other thing. Perhaps the most insidious thing I can think of that is objectionable about free trade is "Chapter 11" of the NAFTA treaty. Its the "Investor's Rights" section of the treaty, and has been used, basically it says that if any law or regulation of a signatory of NAFTA interferes with a companies PROJECTED profit margin, then they can be sued for damages, even if those damages don't exist yet. Mexico has already had to pay out millions of dollars due to health and environmental regulations and laws that force companies to clean up after themselves, this cost the companies money, so they sued and won for damages.

Now the FTAA has a similar measure, but one that is even stronger. Many of these nations already have unfair restrictions on sovereignty placed on them due to IMF and WTO rules for loans and such. No labor laws, no environmental laws, privatizing rainwater and other utilities, etc.

Also, I don't think that moving US manufacturing to nations where kids work 12-20 hours a day for 3 cents an hour is a good thing myself. Thats the "competition" so to speak and while the US could develop new industries to replace the ones of old, there are two problems with that. The first is that such industries take time to grow, and the second is that if they are too specialized, as in biotech, then there is no way that the amount of jobs gained will equal the amount lost. We need the blue collars workers to sustain the economy, we cannot in any practical way replace them with white collar or specialized workers only, we would see unemployment rates reaching 30% or higher in that case.

Free trade as practiced today has not done anything to benefit the people of the world that are affected by it beyond the CEOs and bribed politicians. Our labor force cannot compete with nations that have authoritarian regimes that can ORDER workers to work as slaves or die, unless we want to change our nation to be like them. So we lose jobs to China, not because of fair competition but because they have an unfair advantage of working within a system that allows them to ignore the plight of workers and the people at large with impunity. They kill unionists, they kill those who object to this proto-capitalist system, and we lose our jobs to them because of it.

This can be reformed in one of two ways, one of those ways is to return to the ways of protectionism and tariffs to rebuild our manufacturing base, and also to allow other nations to develop LOCAL economies rather than accepting foreign companies in to fill a void, but removing all capital from that economy at the same time. The second way is for us to scrap the WTO and the IMF, in addition to treaties like NAFTA and forming a new organization for economic treaties. This would be one that would agree to international standards for safety regulations of workers, localized minimum wages, legalizing Unionization, taking hands off approaches to local laws, Anti-Monopolization standards(restrictions on how many Wal-Marts in a 100 miles, as an example), I could go on, but you get the idea.

ON EDIT: By the way, there is a practical reason why I put free in quotes when talking about "free" trade, and the reason is simple, it isn't really free. All it does is free capital to pass through borders without restrictions, but trade itself is more than just goods, its people too. You cannot have true free trade unless people can look for jobs where ever those jobs are located, without restriction.

[VirginiaDem]

16. I mostly disagree

First the agreements--truly free trade would require the free movement of labor. But outsourcing is, from a practical standpoint, an example of labor movement being free to move. Sure, the Indians are stuck in India but because their work can be done at the speed of light, they are able to do jobs on other continents. Also, I agree with you about protecting health and environment.

Your idea of scrapping the WTO and IMF and creating new organizations is intriguing. I'll think about it.

I think you're completely wrong on wages and the general race-to-the-bottom argument you're giving. Indians do not make 3 cents an hour. They make significantly less than Americans do, of course, but in no way is it so low. Because they have specific skills (namely native English and good educations) that make them specialized. As for Chinese, it has been estimated that literally hundreds of millions of Chinese have been pulled out of abject poverty by liberalization. The Chinese are demonstrably economically better off for it. Of course, in the process they've all but ruined their environment, a point I'm sure you would agree with.

So my modified def'n of free trade would include stronger environmental protections. But there is no reason we can't drop barriers that have nothing to do with the environment--these constitute the vast majority of barriers.

[Solon]

18. Are labor and minimum wage laws also barriers?

What about safety regulations, child labor, what else, as a barrier to free trade, should be sacrificed? Also, I didn't claim that Indians are the ones making 3 cents an hour, that was a rhetorical example. And Yes, I agree, free trade for China has been a boon for a few million that are politically connected and work as managers. But what about those that work for 20 dollars a day on the factory floor? The ones that, if they are women, are told that if they get pregnant that they MUST have an abortion, even if its a first child? How about those that are required to live in certain areas of Shanghai, on factory property, and if they choose not to they are still charged rent for the unused property?

[brentspeak]

9. Well, you're fortunate that your job

isn't the kind of job that can be outsourced. (It sounds like you got a Phd in econ or poli sci). But what about the other 90% of the American work force whose livelihoods are up in the air?

[VirginiaDem]

10. Fair enough.

We have to look at both sides. That's my point. Yes, jobs lost to outsourcing must be addressed. At the very least we should do what Clinton tried to and what most economists support--create retraining programs/investment in high tech areas (like stem cell research, for example), and safety net programs for those who have lost their jobs. The other side of the issue is that when India gets thousands of our outsourced jobs it has a beneficial effect on at the very least the Indians who receive the jobs. There's a growing middle class in India, particularly in the areas that specialize in high tech like Bangalore (although to what extent it has grown is under dispute); this is good news.

[Solon]

13. The question is, however, why couldn't the Indians themselves...

work for themselves? As you said, they have a growing middle class, probably the only example of free trade having a positive effect on people outside of the executives. Usually with education comes a growing middle class, and to be honest, I don't see how you can actually call that a benefit of free trade alone. Indians could just as easily start up many other businesses that don't rely on foriegn investment(actually I don't doubt that they do) and then grow local economies based on them. I doubt most Americans would have a problem with having to call tech support in India if it was because the software I have was made by an Indian company.

[VirginiaDem]

15. But that is not what has happened.

India has developed their own capabilities but they have benefited enormously from free trade. I would bet it's a combination of both domestic initiative and capability and trade.

India's recent success would never, ever have happened without foreign investment, trade, etc.

[Solon]

17. Foriegn investment and "free" trade are not the same thing...

Let's say I wanted to start a company, I have the initiative, drive, and education(or common sense) to start it, but not the money. So, I go out an advertise for investors, go to venture capitalist firms, etc. Some investors would be domestic, others foriegn, we start a factory together, for a new company, make tidy profits, and there you go, business growth. That can happen, by and large, outside of the framework of Neo-Liberal policies, it has happened outside of them for a century or more before hand as well. Now, in regards to India specifically, they had a few things going for them before they liberalized thier nation's trade policies to allow foriegn investment. Those are, no, HUGE ourstanding debt at the time, a stable democratic government, and an increasingly educated populace. Now, unfortunately, most nations in the world do not have any of these three things, and therefore little "bargaining power" when it comes to what the Multi-Nationals want. Yet, even then, things like Bhopal happen, due to negligence of local government and the greed of corporations.

So, what happens in other nations instead? The formula is simple. Usually a nation is in desparate need for something, food, arms, water, whatever it is, but they can't afford it, so they go to the IMF for a loan. The IMF will give it to them only if they meet certain conditions. Usually these conditions include Utility Privatization, Education Privatization, setting up "Free Trade Zones", relaxing enviromental, health, labor and safety regulations and laws. This usually includes them opening up to foriegn investment, usually tax free, but in specific ways. One, as I mention are the "Free Trade Zones" these are usually fenced off areas in a community, a business park for factories of American, Canadian, or European businesses that are also Tax free zones as well. Sometimes these nations, not having a ready made labor force for these businesses, will force farmers off land they own, seizing the land, and then forcing them and their families, by default if not by gun, into these factories to work. Many times these factories have armed guards, not to prevent theft but for intimidation purposes. In many cases, workers who do not obey the rules, even outside the factories, are beaten, some killed, and it is hard for intimidated workers to speak out about the conditions in the factories.

Not to mention the pay, which is usually below substinence levels, when before farmers and their families, while working hard, could still eat 3 times a day, now are reduced to a not as nutritiential meal only once a day. Usually such communities become even more depressed than they were before, there are no revenues coming into the community, all products of the labor of the workers are marked for export out of that nation, and there are no taxes for the local government to collect.

[Joanne98]

3. Do we have a surplus with ANYONE?

[jsamuel]

7. Halliburton

[Up2Late]

5. "...Makin' good progress...!" oh wait, wrong talking point...ahhh...

"...were gonna Smoke'em out...!?!" no, that's wrong too... "Ahh, Freedom is on the march?" :banghead: :argh:

[Bigmack]

14. Wait a minute! Are they counting....

ALL the goods coming into the US?

Are they counting the value of all the illegal substances flowing into the HUGH market in the US?

....the Peruvian Marching Powder, the Black Tar, and the Left-Handed Tobacco?

I bet if those products are counted, the Latin American trade surplus is REALLY up there!

[teryang]

19. Do they count the money latin and carribean subsidaries of US

...companies like Apple book deliberately overseas so they won't have to pay US taxes?