Monday, July 25, 2005

Defeating CAFTA is important to US Manufacturers

WIRE-Net is a founding member of the NE Ohio Campaign for American Manufacturing (www.neocam.org). Several leading Ohio manufacturers recently joined NEOCAM's Advisory Committee. Here's what one of them wrote in an open letter to Congress about the need for a new debate about US International Trade Policy.

Dave Johnson is President of Summitville Tiles, Inc., and also Chair of the Ohio Manufacturers Association.
July 12, 2005
An Open Letter to Congress:

Is there anybody in Congress that is concerned about the economic consequences of our already astronomical and still growing trade deficit ($618 Billion in 2004) and the continuing loss of U.S. manufacturing jobs? This year, the trade deficit is already running $100 Billion above last year. Next year’s trade deficit will grow higher yet. I believe that a significant source of this serious problem is the nation’s continued commitment to poorly designed “free trade” agreements. The Dominican Republic – Central American Free Trade Agreement (DR-CAFTA) currently being considered is an excellent example. While its proponents argue that it will stimulate the U.S. economy, the reality is that CAFTA is little more than an outsourcing agreement for multinational corporations that will cost additional American factories and jobs. There are a number of reasons this for this:


1. The six countries involved with CAFTA have a combined GDP of $85 Billion…about the size of New Haven, Connecticut! Over 40 percent of the population of these countries live in poverty. These countries simply lack the purchasing power to become net consumers of U.S. goods. Even the most optimistic forecasts predict that DR-CAFTA will only add $1 Billion in U.S. exports, a drop in the bucket of our current trade deficit. Yet, DR-CAFTA would open up the U.S. market to more and more cheap imports, further undercutting American manufacturers.

2. CAFTA would allow for more “turn-around” exports – products shipped south for assembly and then back north for sale in the U.S. The result would be a net loss of U.S. textile and apparel jobs. Already one third of our trade with these countries is in “turn-around” exports.

3. Chapter Nine of CAFTA invalidates “domestic procurement” laws. This means that, at a time when many middle class American jobs are being outsourced, state and federal agencies would be barred from legislating “buy American” guidelines in their purchasing decisions.

4. Passage of CAFTA would greatly influence future U.S. economic policy. If Congress, the Executive Branch, and the multi-national corporate lobbyists are able to pass this trade agreement, the momentum in Washington will swing to those seeking further outsourcing agreements, such as the Free Trade Area of the Americas, the Doha Round, a new Andean Free Trade Agreement, and a host of new bilateral free trade agreements. We need to stop DR-CAFTA and start to re-think American trade policy so that our trade policies benefit all Americans, not just the WallMarts and the multi-national corporations.

In the final analysis, DR-CAFTA is nothing but a further assault on an already imperiled American middle class. If we are to realize our potential as a country, and retain the strong, broad middle class that is America’s singular political and economic achievement, we must fight to keep a vibrant manufacturing base and good jobs here in America. This means that we must resist the perceived short term benefits that cheap foreign goods bring to WalMart shoppers and instead focus on a national trade policy that ensures America’s long term viability as a manufacturing based world power.

Sincerely,

David W. Johnson

CEO ~ Summitville Tiles, Inc.
Chair ~ Ohio Manufacturers Association


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