|Transcript - January 29, 2004|
Part III: Trade and Jobs
RAY SUAREZ: After the sessions on security, the participants turned their attention to issues of trade and jobs. Again, here's an except of their video briefing.
The 1999 protests in Seattle against the World Trade Organization, the leading body regulating international trade, were just an example of the passion that the issue of trade sparks among supporters and critics. Free trade is, in theory, the ability of individuals and companies to buy and sell goods and services to those in any nation without interference. Companies have to compete globally, then supporters say consumers all over the world will have access to goods and services that are produced as cheaply and as well as possible.
ROBERT LAWRENCE, Economist: By importing, we get things at lower cost than we would have to spend if we had to make them at home.
RAY SUAREZ: Since World War II, U.S. foreign and economic policies promoted global markets as a primary way to encourage economic growth and raise standards of living by boosting and creating jobs in countries around the world. The U.S. has also promoted free trade among the U.S., Canada and Mexico, with treaties like the North American Free Trade Agreement, known as NAFTA.
WOMAN ON STREET: I'm all for free trade, but I hate to see jobs go somewhere else, cheap labor. I don't know what next Mexican labor laws are like.
RAY SUAREZ: Critics say the case for free trade is fine in theory but falls apart in practice. While free trade brings new jobs to poor countries, critics argue that it also encourages the use of cheap, sometimes sweatshop labor amid working conditions that do not meet U.S. environmental or labor standards. But some U.S. workers feel the playing field is being leveled at their expense.
MAN: We went to lunch and our jobs went to China.
RAY SUAREZ: For decades now, U.S. manufacturing jobs have been migrating overseas. More recently, high-skilled, high-paying white collar jobs have also been moving offshore. Current U.S. policy reflects the idea that free trade promotes the rule of law fights corruption and encourages countries to build democracies. But opponents suggest that, while free trade is helpful to big business, it does little to help people in poor nations. The question remains: How do we balance the priorities of the American economy and the global economy, as well?
While much of the security session focused on events in foreign lands, most delegates looked at the economics discussion through the lens of their local concerns. In the rural area of Kearney, Nebraska, for example, the talk was of trade and farm subsidies.
JIM ALBERS, Farmer: You've got to really be aware of it in this day and age. As a farmer, you got to watch the markets and the trade and what country's selling this or what harvest they're in. It's really, really important now as compared to what it used to be a long time ago.
JACQUE HARMS: Have you had to put more thought to into it as the years progressed?
JIM ALBERS: Oh, yeah. You have to project almost like a year in advance what you're going to raise compared to what South America does and things like that. It's not like it used to be. You've got to be aware of what's going on full time now.
TRUDY GREENE, Retired Farmer: Yes, because I have an interest in a farm, and so I have been very interested in NAFTA and the results of it, it doesn't seem like it's panning out as well as some wanted. And I can remember the wrangle they had trying to get it passed and so forth and all the high hopes. So... and of course now that the Mad Cow Disease has hit the United States, that's another concern for those of us that are living in a farm community.
RANDY STUEVEN, Contractor & Farmer: $4 billion just in Japan alone that we lost with the Mad Cow, off of one animal.
TRUDY GREENE: That's right.
RANDY STUEVEN: So yes, the world market and NAFTA and world trade is big.
KURTZ METZGER, Drilling Contractor: I think that are as far as Japan is concerned, if they want to boycott our beef, why don't we look at the vehicles? I think it's a give-and-take kind of thing, you want to scratch my back, I'll scratch yours.
JILL JORGENSON, Painting Contractor: Shouldn't we do the same thing to Canada? Didn't we boycott their beef? So why is it okay for us to... why is it okay for us to have our own set of rules, but then expect another country to follow a different set of rules?
RANDY STUEVEN: There's no better one to do it than the country that's purchasing of it. You put your standards out there what you want to buy. Anyone that wants to grow things to those standards and the price that you're willing to pay, you've got a deal.
JACQUE HARMS: You know, the federal government with its farm program, are subsidies something that need to be eliminated or what do you think should happen with subsidies?
JIM ALBERS: Well, what used to break my back to get a tractor for $18,000. Now it's $118,000. It doesn't make any sense right now, but without the subsidies, you're just cutting your own throat.
RANDY STUEVEN: One thing positive about subsidies is it keeps Americans in cheap food. Without the subsidies, we would have to charge more, we would be facing more bankruptcies, we'd have much, much larger farms. You wouldn't have the quality of product that we have. With the smaller farms, you do maintain a high standard of quality.
KAREN RATHKE, Executive Director, United Way, Nebraska: But subsidizing idle ground is a hard sell when there are third world countries starving to death. So I think a farmer would rather farm the ground and be proud of the crop he produces if he had some place to send it, even if the government was still paying for it. They would like to... I mean of course your profit margin is a little different when you are not producing a crop and you are. But you know, have we explored all those venues when...
RANDY STUEVEN: Well, should all the people that are getting subsidies get subsidies? To me, I think the farm program is terrible. I'm part of it, I'm a farmer, too. But I think it's terrible. The subsidies and these moneys are going places they shouldn't go.
KHODI KAVIANI, Moderator (Seattle, Washington): How has free trade impacted your community and all the people in it, yourself included?
KATRINA JARMAN, Sign Language Interpreter: I don't know of anyone who's got a job. I only know of people who have lost their jobs -- primarily in the manufacturing sector because here we're so service-based. What is it we're selling to the rest of the world?
RACHEL ALBER: We just got a job doing Disneyland in Hong Kong, and making signs for Disneyland in Hong Kong, right? And so I'm, like, how did we get that, you know? And it's because we have really good quality, what we do.
JAMES WATSON: I bought a hand truck at COSCO; it cost less than $20, was made in China. The hand truck I bought before that cost more than $60, it was made here. The one I bought that came from China was superb and I've been able to do a lot of good work in the community with this hand truck.
KATHY KEENE: One of the things that my father taught me was you go to your little local business,, like, it's part of your community. You don't go to all the big box stores. For every time you go into a Wal-mart, you're taking money out of Bartel's, which is a local company, or you're taking money out of your neighbor who's trying to make a living.
MARY ROGAN, Retired Teacher: When is enough, enough? I mean we just look at Kodak and what's happened to our own people here -- the numbers of people who have been let go. I just question how long we can continue down this road before, like, cities like ours don't have strong economic bases. I mean I've talked with people now who, you know, in order to get a comparable job, they're already told there's nothing comparable to what you do in the Northeast.
JIM LIEBMANN, Product Manager: I think in Kodak's case, the issue is more turnover of technology, the switchover to digital technology. That's what's hurting Kodak much more than it is the foreign competition. Fuji, if you look at their major film competitors, it's Fuji. They have a big plant here in the U.S. They do have lower costs because it's a newer plant, they have fewer employees and they're younger, they don't have pension and medical costs quite the way Kodak does. But it's mostly the transition to digital, that's what's killing Kodak.
VANESSA SCHUMANN, Poet: But again, it's the outsourcing of positions, too. And that's not specifically Kodak, but everywhere. And whether it's a question of the company fight whether they're fighting just the general cost of living, they're not making enough money for what they have to do. Whatever the case is, we are consistently, constantly outsourcing these jobs overseas.
JIM LIEBMANN: Yes, we are.
VANESSA SCHUMANN: And it's killing us.
SPOKESMAN: It doesn't sound like anybody likes this free trade thing. It doesn't sound like it's working.
RAY FIORINI, IT Project Manager: Well, we can't compete with foreign manufacturers. Perfect example, the all-American company IBM who in the southern tier in Endicott, New York, they were a manufacturing basis - they're gone; they're gone. They made an announcement -- well, they didn't make the announcement, it was done through investigative reporting, they were sending out thirteen, fourteen thousand jobs to India, you know -- IT jobs, service jobs, customer service jobs, things like that. Them, Dell, Compaq, you know, I mean these are a lot of jobs that are being taken away from us.
MAN IN GROUP: But the problem is that it's being driven by the costs and the people who are buying the IT services are looking to get those services cheaper. And they can get them elsewhere, sometimes at one tenth the cost. And I don't know that there's really any answer to that. It's kind of like holding back the tide, I think. But it's going to have the effect that people won't have the jobs with the same pay scale, therefore, they won't be able to buy the goods from the rest of the world, and our own other local people, the people who sell services to us, whether it's housing or the people who work in the local grocery stores, all of them are going to be suffering because our pay scales are heading down.
RAY FIORINI: Do you think, though, that a lot of these corporations that are doing it for profit bases are giving us the opportunity to say we'll lower our wages. I want a job, I want to be able to support my family. And right now I'm not getting that opportunity because these jobs, not only are they not saying, "we'll give that you opportunity, you know, do you want to work for a lower pay scale?" They're just saying, "we're gone and we're not asking you. This is not... we're answering to our stockholders, we're not answering to you." Now, if they want to give them tax breaks, stipulate they need to create the jobs here and not in a foreign country. But there's got to be some consequences for sending them out.
WOMAN: Is that a question that you're asking or the group is asking?
MAN: I want to formulate it, I guess
Asking the Experts
WOMAN: Our question is: How do we encourage companies to keep our jobs here in the U.S.? And whether we can offer our companies incentives to kind of push that forward, to keep our jobs here in the United States?
DAVID REID, PhD, Rochester Institute of Technology: If we want to keep jobs here, we're going to have to have different kinds of jobs. And those different kinds of jobs, to keep them here, we have to participate to the full. We have to stay ahead on the imagination curve, and we have to be ahead on the innovation curve. We need to stay ahead on the working hard and working smart curve. And we need to generally get up to speed per se because with open borders, that is the nature of the challenge ahead.
MAN: If we eliminated tariffs and subsidies, how would it affect the standard of living of the Americans?
KAREN ADAMS, PhD: Well, some things would be more... a number of things would be less expensive. For example, sugar is subject to a quota in the United States, only a certain amount of sugar can be imported into the United States every year as a way of protecting domestic sugar producers. And the cost of that is estimated to be something like $7 per American citizen per year and for the cost of administering the quota, and then whatever the price differential is on top of that. As an example of a tariff, a homegrown one here is crawfish. Some of you may be familiar with the fact that there is a 200 percent tariff on the importation of crawfish into the United States, so that means that, you know, the crawfish is-- what? -- Twice as expensive imported as it is domestically. So this favors domestic producers.
MODERATOR: Okay, group number 8, Chris O'Neill, your question. Chris?
CHRIS O'NEILL: Should we have time limits on subsidies?
MODERATOR: Very specific. Bob, how about you?
ROBERT MANN: Well, I think that goes to the heart of, know, should we have subsidies at all? You know, and I think that's the debate that we need to have in this country and what so much of our trade... the debate over our trade policy is all about is how are we subsidized and when we do subsidize, are we making ourselves less competitive? In some ways, and I know this is politically not a very popular thing and maybe not the right thing, if you cut off the cameras for a minute, I might be able to talk a little more freely, but...
MODERATOR: That's why it's a hard question.
ROBERT MANN: ...Sometimes I wonder if these subsidies do communicate that we don't have confidence in our ability to compete with others in the world because I know that Louisiana, I know this country can compete with the rest of the world. We do it -- industries that are not subsidized are doing very well, thank you.
MADHU BERIWAL: I would just like to add that there are some times when you want to have a subsidy, okay? So when would you have it? From a businessperson's perspective, you're starting in a new market, there's a it is there's a market that you'd like to penetrate, you'd like to get there, you finance that and maybe sell at a loss in that market for a little while until you gain some stature in the market, you gain some confidence you have some products to sell, your product's a little bit mature and this is done every day by businesses where you buy into a market initially and then you figure out how to make money in that market. So if you have an emerging industry that is beginning to compete where some entrenched suppliers for that sort of goods and services overall, you might provide a subsidy, but let the people know that I'm working in that industry, this is a short-term thing. But it seems that once a subsidy is put in place, it becomes virtually impossible to remove it.
JIM RICHARDSON, PHD, Louisiana State University: You better be sure you like that subsidy because once it's there, it's going to be to be there a long time because there are political interests and they know how to lobby for it.
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/ Lehrer Productions.
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