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PufPuf23

(8,954 posts)
12. Smoot Hartley is a red herring and omits nearly 50 years of a successful history under GATT
Wed Jun 1, 2016, 01:51 AM
Jun 2016

-General Agreements on Tariffs and Trade - that was replaced by the WTO (World Trade Organization) in 1995.

In models, tariffs and trades reduce economic activity; but in practice, adjustments between nations and specific markets while reducing tariffs as a general principle is a more realistic and workable model (and is what occurred under GATT).

The Free Trade model works in theory but not in situ. General welfare and economic productivity are maximized if markets are free (including freedom from monopolies and cartels and labor is fairly compensated) and all parties cooperate in good faith. Also other items such as patents and mutual defense and so on .. are grafted into the legislation and treaties further weakening the theoretical model. So fortunes are made at a cost to labor and the environment and trade deficits and surpluses swing out of control -- what we have now.

Under GATT there was the concept of Most Favored Nation and under the WTO this has been replaced by the associations within various free trade agreements. The free trade model is a neo-liberal rather than Keynesian model.

Under WTO workers in developed and developing but natural resource rich nations have been harmed and there is a short term rush on easily to extract natural resources. The rich (nations or individuals) get rich and the poor poorer and all the wars and rumors of wars and financial shocks and meltdowns lead to even more instability and there are less firewalls between national economies than under GATT; the trans-national corporations rule and have scant alliance to nations. Maybe a unified global system is best and a future certainty but I doubt that we will ever reach such a utopia because it clashes with human nature and is too complex a system to maintain, especially when individuals and organizations are out to game the system.

The Chinese are smart and have built a large trade surplus but are not playing fair. The USA obtains cheap Colombia coal and exports environmental impact and in Colombia an elite only benefits.

Some items may be more expensive domestically but there will also be more income for purchases and paying taxes and income has a multiplier effect of fueling more jobs and income and then demand and more taxes.

One problem is that the concept of full employment is no longer operative. With all the technology and efficiency, there is no reason for everyone to work. But I believe anyway that folks should have a guaranteed income and surety of food, education, medical, and shelter plus reasonable transportation and some discretionary income. The income and wealth is there, just not shared.

I am surprised you brought up Smoot Hartley as that is bull shit and ignores GATT which was instrumental in the long period of post WWII prosperity.

first of all these so called trade agreements have very little to do with trade hollysmom May 2016 #1
ditto Hollys mom larkrake May 2016 #2
So, if Your Concern Is Human Rights Suffering Under Trade, What About Cuba? TomCADem May 2016 #3
Your assumptions are false. JDPriestly Jun 2016 #17
+10000 Armstead Jun 2016 #21
"What do folks think would happen if those agreements were cancelled?" Thank you Recursion May 2016 #4
I think that thousands and thousands of jobs have been moved to Mexico under the JDPriestly Jun 2016 #16
The Free Trade Agreements are complex, full of nuance, and favor trans-national corporations. PufPuf23 May 2016 #5
The Colombia Free Trade legislation supports continued use of coal and PufPuf23 May 2016 #7
What exactly is "Free trade" versus "Fair trade?" EndElectoral May 2016 #8
Free trade and fair trade defined PufPuf23 May 2016 #10
Isn't Bernie Proposing To Impose Tariffs on Goods from Developing Countries? TomCADem Jun 2016 #11
Smoot Hartley is a red herring and omits nearly 50 years of a successful history under GATT PufPuf23 Jun 2016 #12
Good post. Good analysis. JDPriestly Jun 2016 #14
Thank you. Some days wonder if it is worth the effort. alas. eom PufPuf23 Jun 2016 #18
Why does Bernie's Tariff Work as Opposed to Smoot Hawley? TomCADem Jun 2016 #20
I suspect anything you don't agree with, you just dismiss as "jargon" Armstead Jun 2016 #22
Sorry, I don't have a Ph.D, just trying to understand if yo TomCADem Jun 2016 #23
I didn't write it. Armstead Jun 2016 #24
Sanders is proposing something different than Smoot Hawley. PufPuf23 Jun 2016 #29
Personally, I Gravitate Toward Robert Reich's Views On Trade TomCADem Jun 2016 #30
I am in general agreement with Robert Reich. He is a very smart man. PufPuf23 Jun 2016 #31
Tariffs are not the problem. It's all the other provisions hidden in these trade agreements JDPriestly Jun 2016 #15
Where did you get that information? Trump is proposing such tariffs, not Bernie who has proposed to pampango Jun 2016 #28
Note that Plan Colombia - part of neo-con plan for global dominance PufPuf23 May 2016 #9
Bernie is for fair trade. As are most progressives. Eom jillan May 2016 #6
What is 'fair'? Does that mean only trading with countries with wages as high as ours? CrowCityDem Jun 2016 #26
Even that would be problematic. Our trade deficit per capita is higher with Germany than with China. pampango Jun 2016 #27
Trade is OK. But trade disputes should be settled in courts under national control JDPriestly Jun 2016 #13
FDR knew that, to be fair, trading rules had to be enforced neutrally or they would not work. pampango Jun 2016 #19
More right wing Hillspeak AgingAmerican Jun 2016 #25
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