G7 strives to couple crisis response and free trade

[Joanne98]

Source: Reuters


ROME (Reuters) - The G7 industrial powers, fearing a rise of protectionism, will do all they can to combat recession and avoid distorting free trade on the way, according to a joint statement being prepared for release after talks on Saturday.

The draft statement, a copy of which was obtained by Reuters as G7 finance ministers met in Rome, sought to allay fears that governments determined to protect jobs and national industries would abandon commitments to fair cross-border competition.

Overnight, the U.S. Congress adopted a $787-billion economic rescue plan that includes tens of billions of dollars for public building projects, with conditions including that they use U.S. steel and other U.S.-made goods.

The draft G7 statement said that stabilizing the economy and financial markets was paramount right now, meaning all had to work together and use all possible policy options to maximum collective effect.



Read more: http://www.reuters.com/article/newsOne/idUSTRE51C2FG20090214

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This is so infuriating. We are the only non-protectionist country on Earth.

[pampango]

1. The only one of the G7 countries that we even have "free trade" with is Canada.

The others are simply members of the WTO and those rules apply to our trade with them.

The provisions in the stimulus bill merely extended the 1982 Buy America Act (iron and steel used in transportation projects give priority to American suppliers) that was already recognized as an exception to NAFTA rules (about equal treatment in government procurement), so it didn't change anything in NAFTA and doesn't affect the WTO anyway.

The G7 countries may be worried about what may come next, but they don't need to worry about the stimulus bill. Heck, they should be happy about it, since it aims to revive our economy which will be good for them.

[Elwood P Dowd]

2. "...fair cross-border competition."

Bullshit. What's fair about our trading partners zapping our exports with a 20-30 percent combined VAT and tariff while we have no VAT and a low (usually less than 3-4 percent) tariff on their products?

[cufford]

3. So what else is new?

Of course they want to protect their so-called "Free Trade" agenda. It's made these people wealthy beyond their dreams, at the expense of the rest of us.

The passage of these policies in the U.S. are, without any doubt, the very reason for our current economic collapse. They effectively eliminated the very base of consumers in this country that made our country the economic powerhouse it once was. In short, big American corporations fired their own customers. Ironic, isn't it.

"Free Trade" killed our industrial base of good paying, working class jobs in this country. Putting millions of middle class people out of work. The domino effect over the past decade is now accelerating at an exponential pace. Because when you close the factory and put a thousand people out of work, the entire town's economy is devastated.

By eliminating the best paying working class jobs we had, in the interest of short term profits, they killed the very consumer market they were making money from.

It's not rocket science, what happened and why were in this mess. Nor is it why they continue to push these traitorous policies on naive and ignorant Americans.

Protection, of course, is a good thing. Only in America could you sell the people on it being just the opposite.

Cufford

[whosinpower]

4. Free trade is a gift for multinationals

It has never really been for the benefit of the consumer, becaue the end game scenario is what we are seeing right now - gutting the middle and lower class opportunity to earn a fair wage, and eroding the very consumer base needed to buy the stuff - whatever is manufactured, created, or made.

Instead of free trade - perhaps a better policy would be fair wages - or equivilant wages from nation to nation. So the IT specialist hired in the India would gain exactly the same wage as the American counterpart.

Barack Obama insinuated as much when he mentioned renegotiating the north american free trade agreement between Canada, the US and Mexico.

The other thing that should be seriously looked at is the need to invest in the stock market, in whatever form to finance our retirement funds - which, in my mind has something to do with the overwhelming urge to increase profit margins to gain further investment dollars.

The whole concept of increasing profit for these multinationals would create more job opportunities is hollow and false. They don't. Tax cuts did not create a single new job in America. The theory sounds nice but it fails under a real time scenario.