S_Baker said:
I am not an economists, but I do know this much the US cannot remain the engine for the world economy period. The Japanes have to open their economy plain and simple as well as other asian nations. The trade imbalance is not healthy.
As for other posters talking about processing beef and other products in canada, go ahead. I say move up the chain, but remember it cuts both ways....the CDN dollar remains artificailly low especially compared to the "crappy" US currency, let see how many jobs are in canada at a 140 CDN per US dollar, not many I would think.
Say, I was wondering, was not NAFTA suppose to get rid of the tarrifs between the countries? So why is it that CDN INTERNET buyers have to pay taxes/duty on items they purchased outside the country?
The US discourages other nations from opening their domestic economies in 3 key ways;
1) Repatriation of profits - Large US based corporations make money in a host nation, employ a few people, and either export raw materials or import finished ones. All of the means of production stays elsewhere, and the profits are invested elsewhere too. This creates economic growth without economic development, and is a very bad thing for the nation in question, because when the market for the commodity they are selling fluctuates, their economy does too. As for the importation of finished goods? They are purchased with foreign exchange, and as such their prices can fluctuate wildly.
In the case of Japan, the Japanese want very little of what the US makes. Japanese cars, electronics, high tech and pharmaceuticals are all FAR superior to anything the US sells. Why would they open their quality domestic markets to an influx of substandard US goods, which will be protected with duties and tariffs, leading to the demise of their domestic industries.
2) Non Compliance with trade law - The US has a long history of making trade agreements that seem beneficial to all involved, then not holding up their end of the deal. Softwood lumber is only one example of this. Basically, the US promises to open up domestic rice markets in exchange for, say, oil from Venezuala. The Venezualans sell their oil to the US, and also try to export their rice there, the US slaps an entry tax on the rice, and subsidises California rice farmers, killing the Venezualan rice industry despite their deal. So now all Venezuala sells is oil, and when the US seeks other suppliers, the price of that drops too.
Softwood lumber is the same deal. The US signed NAFTA with full knowledge of low Canadian stumpage fees, and the low price of Canadian energy. So the US signed NAFTA, taxed Canadian softwood lumber, and tried to negotiate it's way out of a trade deal that they proposed and ratified in the first place. As a result, the Canadian Softwood lumber industry is in serious decline, even as softwood south of the border remains at astronomical prices due to a housing boom in the gulf states after a terrible hurricane season.
3) US interference in internal affairs - The activities of the US military and intelligence agencies are well documented, especially in Latin America, and the US opposition to Huga Chavez is only a recent example of this. States which allow too much market penetration by US corporations bring activity by the US government as well, who often seeks to protect the interests of industry (big oil in particular) at all costs. The US military escorting KBR contractors in Iraq is only one example of this. US energy/foreign/military policy are inextricably intertwined, with the necessity of "freeing" oppressed people who happen to be sitting upon large petroleum reserves.
The US is it's own worst enemy when it comes to trade law. If they would only follow their own rules, and honor their obligations, there would be alot better chance of the much heralded prospect of "free trade"