The expiration of the worldwide quota system that regulated the flow of textiles between the global south and north, now six months old, has created massive job losses across the Americas, Africa and parts of South and Southeast Asia. The quotas restricted the number of textiles and garments each of about 150 countries could import to the United States and… return to article
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Reader Comments (4)Page 1 of 1 pagesThe end of the multifiber aggreement of the early 1970s certainly precipitated the proverbial race to the bottom feared by labor movements all over the world and the communities they support. At stake is jobs and wage levels. Since 1979 between 5 and 6 milliion manufacturing jobs have been lost in the US due to trade aggreements like NAFTA, FTAA, and now CAFTA which is only the more updated version of a host of bilateral free trade initiatives dating back to the Reagan Administration such as the Caribbean Basin Initiative and the General System of Preferences renegotiations giving the Caribbean and Latin America greater access to US markets for primary commodities like coffee, sugar, and other agricultural products which are purchased by large, monopsonistic processers and marketers very cheaply who inflate the final market price, or from sectors of the local economy long dominated by a few US transnational corporations. Even then the issue wasn’t free trade and getting the third world more permanent market share in the US and a steady flow of foreign exchange, but privelaging US direct foreign investment! It is the same thing today with WTO structured agreements that globalize local economies and cost jobs and incomes in both the first and third world while only enriching the TNCs who invest in the low wage areas. The problem with the textile industry is the severe cost competition between factories for the brands and the international buyers who don’t really engage in price competition in the same market. There is high end and low end and many designers sell clothing articals for very high prices that cost pennies to manufacture! The quota system which once guaranteed a certain export market to many countries and their investors is now obsolete for a new global system that is increasingly concentrating things like clothing manufacturing in fewer and fewer countries. An increasing amount of clothing manufacturing is in China where TNCs will now benefit from the collapse of the old MFA. Those whose finished clothing investment is in Latin America hope to gain from the new CAFTA agreement which contains none of the labor standards protection provisions of the old trade agreements. Globalization has changed world trade basing it on restructured, more concentrated investment patterns which are reflected in new trade aggreements (and the cancelling of old ones) that advantage the largest TNCs. The big lobbyists for such new aggreements are the Business Roundtable, the National Association of Manufacturers, and other organizations that represent America’s largest direct foreign investors.
Posted by cabdriverinchicago on Jul 28, 2005 at 1:28 PM Cabdriver,
I don’t foresee a fair labor solution to globalization in my lifetime. However, I expect that, eventually, organized labor will catch up to globalized entreprenurism.
Posted by Lefty on Jul 28, 2005 at 7:34 PM How about an approach Free Trade that optimizes the welfare of working people?
James Kroeger explains the only approach to Trade Policy that would optimize the welfare of Americans who work for a living in <a href="http://www.taxwisdom.org/trade_policy_jobs.htm:<On Job Losses & Trade Policy</a<.</p<
trengthen its currency</i> in the foreign exchange market in order to improve its citizens’ purchasing power in the global marketplace. When that happens, foreign goods & services become cheaper while the prices of domestically produced products remain the same. But there are more benefits to be enjoyed than simply an increase in global purchasing power. Currency appreciation provides a country with the same essential benefit that productive efficiency improvements provide. Human resources are freed up that can then be used to produce other things of value. The problem with free trade is not that it eliminates jobs; firm investments in machinery do the same thing. Economists understand that this is a net benefit to society if those who are thrown out of work are re-employed in other productive activities. The problem is that elected officials do not seize the opportunity that unemployment gives them to increase the production of Public Wealth.”
“Those who worry about the unemployment caused by free trade do so simply because most members of the world’s legislative bodies do not realize the great opportunity a stronger currency gives them (to produce more Public Wealth). If Congress were to commit itself to the goal of creating and maintaining a sustained labor shortage---an economic environment where there are more jobs available than there are people to fill them—most objections to free trade would be completely silenced. In such a labor market, workers would enjoy the best of all possible economic worlds. Jobs would still be lost, but it wouldn’t matter. New jobs would be easy to find. Market forces would put upward pressure on wages & benefits, obviating the need for government band-aid remedies like minimum wage legislation. An optimal level of national wealth would be produced, benefiting everyone---in real terms---both rich & poor.”
This approach makes a lot more sense to me than all the other ideas I’ve heard since it would give us both the low prices of cheap imports AND an ideal jobs environment. Why aren’t Democrats advocating this kind of solution to the problem?
Posted by Linette on Aug 1, 2005 at 10:40 AM Linette,
There’s something missing in that quote. A leap of logic perhaps. It just doesn’t add up for me.
Posted by Lefty on Aug 4, 2005 at 9:28 PM Page 1 of 1 pages -
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