The Instigator
JoeOnly
Con (against)
Losing
0 Points
The Contender
Contra
Pro (for)
Winning
14 Points

Free Trade, NAFTA CAFTA

Do you like this debate?NoYes+0
Add this debate to Google Add this debate to Delicious Add this debate to FaceBook Add this debate to Digg  
Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
Contra
Voting Style: Open Point System: 7 Point
Started: 9/5/2012 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 4,595 times Debate No: 25463
Debate Rounds (3)
Comments (5)
Votes (3)

 

JoeOnly

Con

I will be arguing against these free trade agreements, arguing that governments should adopt barriers to imports and other barriers to free trade as the concept is generally understood. My opponent can offer an opening argument if he chooses.
Contra

Pro

I will defend the side of free trade. I await your arguments!
Debate Round No. 1
JoeOnly

Con

JoeOnly forfeited this round.
Contra

Pro


C1: Higher Standards of Living

Ultimately, free trade increases the standards of living on both sides involved.

For the lower income countries, they have a comparative advantage in producing labor intensive, low-skilled, low wage work. In return, we would produce skill intensive, high skill, higher wage work. It is most efficient this way, as both countries are specializing in different areas where they are most efficient at producing goods.

This leads to greater competition, and therefore lower prices. Lower prices equals higher savings. Savings = income. This is why free trade has increased the average American's paycheck by $2,000. [1]

Free trade allows free movement of resources. By allocating resources where they are used most efficiently, it allows greater wealth and thus greater economic growth for all.

--For high skilled nations, they sell skill intensive goods, which increases the wages of the workers and allows for expanded reinvestment and expansion in high skill countries, allowing for broad economic growth.

--For low skill nations, they sell labor intensive goods. This also raises the wages of workers. Many workers can suddenly get jobs at higher wages than they are used to. This surge in consumption leads to higher economic growth and more investment.

Ultimately, on both sides resources are used more efficiently, and goods are allocated naturally to where they have the greatest benenfit. This leads to job growth on both sides of the transaction, and leads to a continuing cycle of job growth and prosperity.

Specific Examples

In 1975, malnourishment among children was greater than 50%. Now, it is about 1/3rd of children. [2] Child mortality rates are also down, life expectancies are up.

I am going to see if my opponent even responds before going further.


Sources:

[1]
C. Fred Bergsten, director of the Institute for International Economics, Foreign Affairs (89)

[2] http://www.slate.com...
Debate Round No. 2
JoeOnly

Con

Free trade has devastated the North American continent economically. For this post, I will keep to discussing the consequences of NAFTA.

The outsourcing of U.S. labor to Mexico, where wages are 1/8 of average American wages, has led to a net loss of at least hundreds of thousands of jobs, according to most analyses. (1) Canada has similarly suffered, losing 200 000 high paid jobs to NAFTA, with a steep decline in manufacturing and real wages.

The influx of highly subsidized U.S. corn into the Mexican economy has displaced at least 2 million Mexican farmers, vastly exceeding jobs created by its trade surplus, while the destruction of labor standards in Mexico's manufacturing sector led to a decline in wages by 13.5% by 2000, according to the IMF.(2)

The Clinton Administration anticipated the destruction of Mexican livelihoods, militarizing the border the same
year that NAFTA was passed. Predictions of a drastic increase in illegal immigration, mostly of displacement farmers, of course, turned out to be accurate. The effect on the American economy was also anticipated. Two years before NAFTA, 40% of business executives told the Wall Street Journal that if NAFTA passed they would shift some production to Mexico, while 25% said they would use the agreement to bargain down U.S. wages.

Thus, the real effects of free trade are stagnation, unemployment and exploitation. Free trade exports middle class jobs in developed countries to poor countries with low wages and minimal labor standards, with states that crack down violently on labor. In turn, developing countries are unable to develop burgeoning industries due to competition with far more developed economies. My opponent's view of free trade is not supported by the facts, probably why he rehashes standard economic theories with no attempt to give evidence.

My opponent points out that average incomes in America have increased. He makes no attempt to link this to free trade. Average incomes have increased, but the growth has been entirely in the wealthiest sectors, with middle class wages stagnating or declining. Small savings in consumption are negligible compared to the loss of hundreds of thousands of decent jobs, and the decline in wages and in the bargaining power of labor.

My opponent's only other citation is a global decline in malnutrition. Again, he makes no attempt to link this to free trade policies. In fact, studies consistently show negative correlations between trade liberalization and food security. (3) This is due to the mass displacement of farmers due to foreign market penetration, and the divestment of agricultural resources by foreign subsidiaries to exports of cash crops while the population starves.

(1) http://epi.3cdn.net...
(2)www.fpif.org/articles/nafta_is_starving_mexico
(3) http://www.twnside.org.sg...
Contra

Pro


I will focus on rebuttals and conclusions this round.


Rebuttals and Conclusions


In the free market, resources are allocated to where they are the most efficient and generate the highest returns.


Free trade relies on the law of comparative advantage, and open markets. Competition between producers creates lower prices and greater efficiency. When one nation produces goods more efficiently than another, this leads to greater savings for consumers. Greater savings equals future consumption and investment. Both of these are critical for economic growth.


Free trade by lowering prices through competition increases the income of everybody, and is especially important for the poor. They will have greater savings and thus greater incomes, stimulating the economies and job creation of lower income communities.


The United States generally has much higher human capital than Mexico. This naturally means that Mexico will have lower costs of living, and thus lower production costs. If Americans purchase goods from Mexico, American consumers get higher incomes and savings. Americans who have higher human capital, will sell skill intensive goods to Mexico, as they are more efficiently produced in America. We will sell skill intensive goods to Mexico, and Mexicans will sell labor intensive goods to us. Both sides will get greater economic efficiency, and jobs will be created where they have the highest return. This equals higher job creation and wages for both sides. It is a mutual benefit.


Economists estimated that the effect "on overall employment was positive" due to NAFTA. [1] Why is this? We have lost jobs in areas like auto manufacturing, which have went to Mexico. In return, American consumers have gotten cheaper automobiles from Mexico, and greater incomes. These incomes, and vast new markets available in Mexico, we have had huge job creation in areas like Silicon Valley. It is specialized labor allocated where it has the highest return, which is ultimately best for society. And Con is only focusing on job losses, not new prosperity.


As I've said, free trade has led to higher savings for American consumers, which is the same as higher incomes. The amount of additional income due to free trade is again, $2000. [2] Economic growth is extremely important to lower income nations. Free trade helps them out as well.


Consider sweatshops. There are simply not enough of them. Since workers have personal sovereignty and are free to choose where they work, they will only take the sweatshop job if it's the best employment option available.


Destroying sweatshops does not make workers any better off. It makes them worse off. Consider the case in Vietnam, where Nike makes shoes. Workers are paid $600 a year. This is a low sum, but is is also twice the income of the average Vietnamese worker. [3] Sweatshops thus increase the wages of low income workers. Since Vietnam has a comparative advantage compared to say the US in producing Nike shoes, Vietnam will produce shoes and we will buy them, Vietnam will buy coca-cola products that we make.


What is the result? With vast markets for both sides, Vietnam will have sell huge amounts of Nike shoes, going far lengths in improving employment, consumption, increase wages through higher demand of workers, and will also increase reinvestment by businesses. Ultimately, it will cause more market transactions to occur and Vietnam's economy to prosper and grow faster. This type of basis of using sweatshops in low income countries played an important role in the development of Asian economies such as South Korea and Taiwan. [3]


Other Rebuttals


"the real effects of free trade are stagnation, unemployment and exploitation. Free trade exports middle class jobs in developed countries to poor countries with low wages and minimal labor standards, with states that crack down violently on labor. In turn, developing countries are unable to develop burgeoning industries due to competition with far more developed economies."


My opponent's case contradicts itself. Earlier, he said that "the outsourcing of U.S. labor to Mexico [harmed US employment]. Now he says it harms the low income country.


Neither assumptions are correct.


Free trade does one simple thing -- it increases the amount of market transactions. In free markets, mutual benefit is needed. People are free to choose to engage in any transactions with others (i.e. property rights and consumer sovereignty). People will only engage in transactions if they become better off. Thus, any transaction will make both sides better off. An example, say I buy some bread. I benefit by finding the most affordable bread, and get the product. The producer benefits from having greater revenues.


Limiting trade thus limits market transactions. By limiting the amount of transactions in the market, you thus cause less gain and more pain, as fewer transactions can take place that will help people. Point here, limiting trade limits economic growth.


My opponent also has his math wrong. Economists almost universally agree that free trade is beneficial. [4]


The Smoot Hawley tariff caused US exports to decrease by 66% and unemployment to more than double in the US from about 7% to over 16%. [5]


Furthermore, free trade causes in addition to prosperity for both sides, peace. Both sides will be interdepedent, which will dis-incentivize them in going to war, as this would reduce their national resources.


Conclusion


My opponent has not met his BoP. I have proved that free trade has increased the wealth of Americans, and also through the invisible hand of the market allocates resources where they will generate the highest returns. In other words, efficiency matters, and with free trade, markets are open so that resources flow to their best use and have a comparative advantage. Mexico will produce low skill products, so they will get higher incomes, and the US will produce high skill products, so that we get higher incomes as well. We are both more efficient and have a comparative advantage in these areas.


Free trade expands markets, which leads to more economic transactions. Capitalism, which is all about private property and voluntary transactions, has removed more people out of poverty and produced more prosperity than any other system in human history. We can thus tell that market transactions are good, and only will occur if both sides benefit. Free trade allow greater market transactions to occur, which causes greater prosperity.


By letting resources flow to where they have a comparative advantage, are used efficiently, and by raising the incomes, wealth, peace, and prosperity of all nations involved in free trade, and because empirical evidence is strongly in favor of free trade, we can tell that it should be protected and enhanced.


Vote PRO


[1] "Naked Economics", By Charles Wheelan. (137)


[2]  C. Fred Bergsten, director of the Institute for International Economics, Foreign Affairs (89)

[3]  "Naked Economics", By Charles Wheelan.  (25)

[4]  http://en.wikipedia.org...

[5]  http://en.wikipedia.org...


Debate Round No. 3
5 comments have been posted on this debate. Showing 1 through 5 records.
Posted by JoeOnly 4 years ago
JoeOnly
You asked a Ron Paul supporter, with right-wing economic views. Everyone who voted here had right-wing economic views, according to their profiles. Then again, I'm new to this site so maybe that's just how it works. Im not accusing you of bad conduct per se. The only thing that offends me is that your avatar is from a movie about the degradation of corporate work. Then again, you're incredibly young so I just hope you can wake up before the spirit of youth is behind you and you realize your country is turning into the third world.
Posted by Contra 4 years ago
Contra
What? I asked a progressive liberal to vote. That was it. But I thank the others for taking the time to read this debate.
Posted by JoeOnly 4 years ago
JoeOnly
Asking right wingers to vote for you... I didn't know that's how this site worked. Although I guess you have more of a Citizen's United view on voting.
Posted by Contra 4 years ago
Contra
JoeOnly:

I put it in the "unvoted PM", and nobody had voted for it. Attach this link to your signature in the forums, or make a topic in a forum, and others will likely vote on it. Just because you ask someone to vote on your debate =/= they will vote on it (I've learned through personal experience).
Posted by JoeOnly 4 years ago
JoeOnly
telling people to vote for you... didn't know we did that here
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by RoyLatham 4 years ago
RoyLatham
JoeOnlyContraTied
Agreed with before the debate:-Vote Checkmark-0 points
Agreed with after the debate:-Vote Checkmark-0 points
Who had better conduct:-Vote Checkmark-1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:04 
Reasons for voting decision: Forfeiting the R2 was fatal to con's case, aside from the conduct violation, his only arguments were made in R3 -- where new arguments are not permitted and should be ignored. Putting the debate technicalities aside, Pro had the better case. Pro argued conventional economic theory against Con's bold, but largely unsupported, claims. con would have had to mount considerably more evidence to meet his burden of proof.
Vote Placed by KuriouserNKuriouser 4 years ago
KuriouserNKuriouser
JoeOnlyContraTied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:--Vote Checkmark0 points
Who had better conduct:-Vote Checkmark-1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:04 
Reasons for voting decision: Pro claimed that the costs of free trade claimed by Con were actually a natural redistribution of production that ultimately makes the system more efficient. He showed that Con's claims of loss were contradictory and gave references to show that NAFTA ultimately ended in benefit to both sides. Con's case was also weaker due to its limited scope from forfeit.
Vote Placed by Deathbeforedishonour 4 years ago
Deathbeforedishonour
JoeOnlyContraTied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:--Vote Checkmark0 points
Who had better conduct:-Vote Checkmark-1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:-Vote Checkmark-3 points
Used the most reliable sources:-Vote Checkmark-2 points
Total points awarded:06 
Reasons for voting decision: Pro had better arguments, and Con FF.