Is Free Trade a good thing?

[Alberta farmer]

What do you think? Has free trade with Canada been a good thing?
I believe it has been good for Canada and the USA. I do know for Alberta it has been a fairly good deal in that we don't get screwed by eastern Canada so much anymore. At least we can sell our gas/oil at a world price instead of having to give it away to Ontario/Quebec.
Often you hear Americans saying they are getting a bum deal from Canada, in that we sell more to US than we get? Not sure about that argument as we have10% of the population compared to USA? The other thing is a good portion of the companies operating in Canada are American owned(especially the oil companies) so the profits head south anyway.
The USA treated us very badly in regards to lumber and cattle and we have not retaliated in any way. Now president elect Obama is making noises like he is going to get tough. I think Bill Clinton did the same thing...until he got in and then turned out to be a very open free trader? Will President Obama do anything?
Not sure if our own Primeminister Stephen Harper has much of a backbone to stand up to the USA if they try to change the free trade deal? Maybe President Obama should try to make the changes before the tough Canadian Liberal Party has a chance to get back in?

 

[HerefordSire]

If Canada voted in the UN against the Iraq war, then we will get tough with trade. However, if Canada voted for the Iraq war, Canada is in like flint. On the other hand, Germany and France are expected to have hard tariffs.

 

[backhoeboogie]

What do you think? Has free trade with Canada been a good thing?

It is a good thing. We haven't expanded the U.S. since taking in Alaska and Hawaii in '59. Once we were expanding frequently and rapidly. There is proof to the economy benefit during those transactions. Free trade with Canada and Mexico is essentially the same concept, if the playing field is level.

You have to bear in mind that most everyone had free access across our borders until about '45 or so? Now we have canned our country and everyone is crying and whining about illegals.

If we get the playing field leveled, this free trade thing will benefit everyone and there will eventually be less whining.

 

[Jogeephus]

Free trade with Canada and Mexico is essentially the same concept, if the playing field is level.

That's a big IF. It wasn't level in forestry. Free trade gutted a Georgia industry that employed 1 out of every 21 persons. Canada's dumping their surplus in our country cost us thousands of jobs. Mills shut down everywhere. What did Washington do to protect the jobs. Fine Canada a few dollars per MBF for the overage. Congress loved the extra money so nothing was done. Then Canada got smart and started drilling holes in the studs. This was considered manufactured wood products so these were outside of the agreement. They were then able to dump more of it on our market.

I have no ill will toward Canada or Russia for doing this. They simply outsmarted the knitwits in DC. I'd have done the same.

 

[Alberta farmer]

Not real sure about this lumber thing but I think the problem was the Canadian provincial governments charged a lower stumpage fee than US states? In other words took less of a royalty for every tree cut? Maybe the state of Georgia was being a little greedy?
When Weyhauser(USA company) came in and bought up the Canadian industry production really took off. Canada actually won the anti-dumping battle in the NAFTA courts and USA was ordered to pay back the $5 billion in illegal tariffs, but our Primeminister Harper caved(as usual) and agreed to quotas and only a partial payback of the $5 billion. Don't know if that was smart or not? Sort of sent a message that America can do just about whatever they want up here?
Canada did not go along with the Iraq war. The government of the day said if the UN would sanction it they would go, otherwise... NO. That was the previous Liberal government. The present primeminister was the official opposition leader and was all for going into Iraq with Bush and Blair. Thankfully we didn't get sucked into that mess?
The Primeminister at the time(Jean Chretien) got the Americans PO'd by suggesting if they tried treating other countries with a little respect and not try to always screw them, they might have fewer enemies!
Presently Canadian troops are doing a lot of the heavy lifting in Afghanistan along with the Americans and Brits. This was to fulfill our NATO committment. I think the Canadian public is getting sick of fighting a war that looks like a loser.
I used to go down to Montana/Idaho quite often. Do a little shopping, take a little vacation. I found the people very friendly and to tell you the truth no different than people in Alberta...and I felt I had a lot more in common with them than my fellow Canadians in the east! Haven't been down for awhile as I don't like waiting two hours to get back and forth across the border.
In my own opinion we need to get rid of that darned border and just realize in actuality we are one nation! Just my opinion.

 

[Jogeephus]

Not real sure about this lumber thing but I think the problem was the Canadian provincial governments charged a lower stumpage fee than US states? In other words took less of a royalty for every tree cut? Maybe the state of Georgia was being a little greedy?

Therein lies the dilema. You see in Georgia, the taxpayer owns the land and the timber not the government. So the government of Canada, Russia and a few other countries chose to take less for their timber to insure that their citizens had jobs and jobs were created with the boom. It was definitely a good deal for countries that did not have to show a profit from their timber growth. In other words, if our government owned all the cattle in our country, the government could sell these cattle for 10 cents on the dollar to our processors and flood your market with beef and then I could be calling you greedy for wanting a fair price for your cattle. But as I said, I don't fault Canada for doing this as these were the rules at the moment. Was it fair to us? Absolutely not but its not your fault its our own. What really bothers me is I don't think anyone truly realizes what long term repurcussions to the environment and our local industries this free trade has done. I'm on the front line so I see it. It will take years for the "leaders" in DC to see what I see and it will take years to correct. In conclusion, I don't think any free market based enterprise can ever successfully compete with one that is propped up by a government.

 

[grannysoo]

Free trade is not free. Our "leaders" in DC write the laws that stick it to us in the end.

I'm all for free trade, but free trade must be free on both ends of the street, not just in the US.

 

[ga. prime]

Not real sure about this lumber thing but I think the problem was the Canadian provincial governments charged a lower stumpage fee than US states? In other words took less of a royalty for every tree cut? Maybe the state of Georgia was being a little greedy?

Therein lies the dilema. You see in Georgia, the taxpayer owns the land and the timber not the government. So the government of Canada, Russia and a few other countries chose to take less for their timber to insure that their citizens had jobs and jobs were created with the boom. It was definitely a good deal for countries that did not have to show a profit from their timber growth. In other words, if our government owned all the cattle in our country, the government could sell these cattle for 10 cents on the dollar to our processors and flood your market with beef and then I could be calling you greedy for wanting a fair price for your cattle. But as I said, I don't fault Canada for doing this as these were the rules at the moment. Was it fair to us? Absolutely not but its not your fault its our own. What really bothers me is I don't think anyone truly realizes what long term repurcussions to the environment and our local industries this free trade has done. I'm on the front line so I see it. It will take years for the "leaders" in DC to see what I see and it will take years to correct. In conclusion, I don't think any free market based enterprise can ever successfully compete with one that is propped up by a government.

Dang, that was good Jo.

 

[Alberta farmer]

Well I didn't know that. Maybe if the provincial governments up here charged the same stumpage fees as the individual landowners charged things would be fairer? Not quite sure how that works in Georgia? Is there sort of a going rate or is it whatever the individual can get? Are the rates all over the place?
There is very little private land up here that is logged and I think if a landowner wants to sell his timber he has to pretty well take what the government rate is.
I guess those sort of differences should be discussed if NAFTA is reopened? I'm pretty sure we all could come up with a solution we all could live with?

 

[Jogeephus]

There is very little private land up here that is logged and I think if a landowner wants to sell his timber he has to pretty well take what the government rate is.
I guess those sort of differences should be discussed if NAFTA is reopened? I'm pretty sure we all could come up with a solution we all could live with?

Like cattle, our timber is sold on the free market system. Price depends on supply and demand. I'm sure we can come up with a solution as I am not against free trade with anyone - especially our good northern neighbor. But if you think about it, Canada hurt itself in the deal by doing what they did. What I mean by this is, in their attempt to make up for sagging lumber sales in Japan, rather than cutting back their supply, they increased their output and shifted the surplus onto us through the loopholes I discussed. This drove the prices down and aggrevated the market. To make things worse, they took a lower stumpage fee for the gov't timber to keep things rolling and expand their industry. So, you were able to make jobs but at what cost? in a sense, Canadians were subsidizing the USA with their wealth from Canadian forests by undercutting your own potential revenue that would then have to be made up somehow - my guess is higher taxes. This, as I see it, was a huge opportunity cost to you as a Canadian. The cost to us was jobs. Thousands of them statewide. Additionally, many of us timber farmers have given up trying to grow timber as there is very little profit in it. For instance, in real dollars, pulpwood prices last year were selliing for $9.70/cord less than in they were in 1985. This decline coincided with the implementation of these free trade agreements.

If you notice from my posts, the economy stuff really doesn't get my dander up cause my throat was cut a few administrations ago and most in the US is just now catching up with me. Unfortunately.

What does get my dander up is what this is going to do to the land. I love the land and believe people should assist nature and manage land to its fullest. To be good Stewards so to speak. Like the ban on horse slaughter in this country, these low prices are going to have a negative effect on things. To me, it seems if you love something you value it. If it has value, then you will manage and invest in it. You can justify your expenses. Unfortunately, here our land taxes have tripled. Death taxes take - in Georgia - 61% of the timber value. County severance tax - another 3%. State tax 6%. But thank God for capital gains treatment - but this will be gone shortly. So what is a man got to show for a life time of planning and work? This is how I see it and it disturbs me. I see the thousands and thousands of acres which are now stripped and growing nothing but brush. I see the large tracts of land getting subdivided and cut into mini-farms. It disturbs me that our "leaders" don't see it this way. They do not see the harm they are causing. All they concentrate on is global warming and how we are going to create all these green industries to fix a problem that NASA says is sun related. This saddens me that people are so nieve or greedy. When all they needed to do was stop the death tax on timber. Treat it like oil or gas. Encourage people to plant trees - not through government programs which cost $3 for every $1 handed out - but through legitimate tax incentives.

Sorry for the long post. Don't mean to be whining cause I've accepted the fact that there is nothing I can do about it. Besides, AlGore was smart enough to see that CO2 don't have a brain and can't get into a plant or a tree without someone like me filling out some paperwork. God forbid the day, but I guess you are talking to one of those new green collar employees Hillary and Al were so pleased about. I guess before long, you folks will be paying me to store your pollution cause without me and my paperwork - CO2 would never find its way in a tree. Seems I'm going to make lots of money at this. It will be a big change of pace. I mean from working my tail off in the hot sun and actually producing something useful to sitting in an air conditioned office creating carbon sequestering plans and producing nothing. Oh well. If it goes this way it goes this way but I do dread the day. It seems though if ya'll are going to have to pay me to store your carbon its only right that you will have to pay me for the oxygen I'm going to be creating. I think the price on this should be twice as much. I'll run this by Al and see what he thinks. If he ever says it was his idea - ya'll will know differently. ;-)

 

[Oldtimer]

Some interesting comments about trade and NAFTA came up yesterday in the Congressional hearing on the $25 Billion bailout/loan the Big 3 auto makers want....Besides the comments about each one of the Executives flying from Detroit to D.C. in each ones private corporate jet costing $20,000+ rather than a $500 roundtrip commercial ticket -- it was brought up that some of the auto companies while closing plants or cutting back on workers in the US were making two complete cars in Mexico and another in Canada- and in some cases were expanding these workforces...

As one Congressman asked the auto execs- How much of this $25 Billion you need is Canadian and Mexican taxpayers going to pay :???:
Do you think American workers and taxpayers should bail out jobs in Mexico and Canada :???:

Another Congressman brought up the fact that the automakers were taking $Millions to expand their investments in China-- which the Big 3 Execs answered by saying that they were trying to expand their market in China and China requires you invest in and build in their country in order to market there.....
Which led the Congressman to respond that could it be possible that the inequities in these one sided Free trade agreements thats causing the economic turmoil the industry and the country are in :???: And should we be looking more toward FAIR trade agreements with these countries- and protecting our US products and workers that are having to fund all these bailouts/loans :???:

 

[hillsdown]

I was going to comment especially on the soft wood lumber issue and how you can compare it to the oilfield in Alberta and the fact that American companies have come in and are basically stealing the oil, but will not as the whole thing p@sses me off. I think there is a good reason why these threads are locked , I can see this one going south real fast.

 

[john250]

The largest export market for US beef is Mexico. I would like to know more about how "exports" are figured. I like people who buy from me. If they would like that beef gift wrapped, I'll volunteer some time.

If US companies build cars in Mexico, and tractors, and such, that might explain why Mexico can buy beef.
Jobs in Mexico means less pressure on the border.

Hillsdown, we don't control the oil companies. They are little nations of their own.

The shocking stuff Jogeephus posted about timber is the sort of thing that happens every time govt gets involved in business. It is hardly ever good.

I'm sitting on a calf crop worth less than two years ago. I'm writing my Congressman. And crunching some numbers.

 

[Jogeephus]

Hillsdown, I don't know about the oil in Canada or how the companies are stealing it but no one has been pointing any fingers or saying anything negative toward anyone. The question was whether or not free trade is a good thing and I'm just giving the facts as they have effected me and my state. I agree with John about the government's need to stay out of stuff like this. Just as your country was hit with a quarantine over the BSE incident a few years ago - I think this was wrong. I think it could have been handled differently but it wound up becoming more of a political thing than a health issue. When things go this way, we as producers are the ones who are hurt.

In military strategy it is taught that free trade is good as it will stabilize the world by creating jobs and opportunities for people in other countries. This may be true - I don't know - but I doubt it. But I will put laws of nature ahead of this type theory any day. One law I firmly believe in is the law of equilibrium. If you open your borders to free trade without any protection for your citizens then in time everyone will be living in the same conditions. As I see it, we (I'm including Canada in we) are presently at the top and have no place to go but down. This concerns me as I like the way things are now. I like my air conditioning and my heat. I don't care to live in a mud hut or a shack. But if we continue to let other countries undermine our prosperity then I think our standard of living will inevitably go down.

So to answer the question, NO I don't think free trade is a good thing. A country, just like a family, needs to take care of its own before it starts worrying about its neighbors.