The official blog of the Libertarian Party
August 10, 2005
China teaches U.S. about Free-Market Capitalism
by Matthew Dailey
Last week the Chinese government-owned oil corporation, CNOOC ended its $18.5 billion bid to acquire the California-based energy corporation, Unocal. CNOOC withdrew its bid, not due to an insufficient offer, but to opposition by the U.S. government. In the Senate, politicians expressed concerns the takeover bid by a Chinese company could harm "U.S. jobs, energy production and energy security."
The Chinese government responded back with this statement: "We demand that the U.S. Congress correct its mistaken ways of politicizing economic and trade issues and stop interfering in the normal exchange between enterprises of the two countries." It has come to the point where the Chinese communist government is giving the U.S. a lesson in free-market capitalism.
Congress viewed CNOOC's takeover bid, not as a normal business transaction between two corporate entities, but as a way for the Chinese government to manipulate global oil supply and harm the American economy. Unocal's U.S. oil production contributes only 0.3 percent to U.S. petroleum consumption. In the unlikely situation the Chinese government was to hoard Unocal's oil supplies, it would not even have a measured effect on domestic oil prices. The globalization of energy markets prevents any one country from causing a major disruption to U.S. oil consumption. As Jerry Taylor from the Cato Institute commented: "America's vulnerability to oil supply disruptions is primarily related to how much oil we consume, not where the oil we consume happens to originate."
Congress' desire to spread democracy and free enterprise around the world rings hollow by voicing opposition to a foreign firm's attempt to buy an American business. For many years we have encouraged China to establish a free-market economy. Now the Chinese are starting to embrace capitalism and the economy is growing. The U.S. is afraid China will surpass it as the world's economic superpower. We cannot begin to resort to protectionism when faced with competition from foreign businesses. Congress should return to the free-market ideals that have made this country so successful and refrain from interfering in the affairs of energy companies, no matter if they are foreign or domestic.
Posted by Shane Cory at August 10, 2005 01:39 PM
Reader Comments:
I completly believe in the ideas of a free market. That deal wasn't an expression of a free market. After all American companies aren't allowed free access in China, and what is the benefit of allowing them free access to America?
Thus the one-sidedness of NAFTA and CAFTA, etc.
Well obviously the only solution is CHAFTA, the Chinese American Free Trade Association. We'd better go ahead and send some foreign aid, just in case.
And hey, let's charge them less tariffs than other countries. What? We already do that you say?
First of all it was not a foreign firm trying to buy Unocal, it was a foreign communist government. "State owned" should be the kicker here. Second, I agree with Mat, our companies are not allowed access to most Chinese markets, why should they have unfettered access to ours? The free market is a two way street, if China were to allow us more access to their markets, I'd be more willing to give them access to ours.
China a communist nation telling the US about Free-Market Capitalism. China has no free market at all. The Chinisese goverment imposes collectivism on it's people. That is hypocrisy like the Republicans blaming the Democrats for advocating Big Government, meanwhile the Republicand passed no child left begind, patriot act and the National ID Card. Tell if you know hypocrisy when you see it.
Another swing-and-a-miss on the LP's blog...
It's odd to hear Libertarians repeat a basic economic fallacy.
Even if the Chinese government completely banned US companies from access to China, it STILL wouldn't make economic sense for the US government to thwart Chinese access to the US. Reducing economic barriers always helps domestic consumers, regardless of what controls foreign governments impose on their economies. That's true whether or not a foreign company is owned privately or by the state.
Further, don't Libertarians think that a person has a right to sell his property to whomever he wants (provided the other party wants to buy it, of course)? If a shareholder of a US company wants to sell to a foreign government, democracy or dictatorship, that's his business and no one should stop him (irrational scaremongers in Congress, least of all).
For more information on the UNOCAL topic, go to http://www.cato.org/pub_display.php?pub_id=4062.
The government prevents the sale of a private company, and libertarians support it!
I don't see why we need the government to tell owners of a private company who they can sell their company to.
Jon said: "Even if the Chinese government completely banned US companies from access to China, it STILL wouldn't make economic sense for the US government to thwart Chinese access to the US. Reducing economic barriers always helps domestic consumers, regardless of what controls foreign governments impose on their economies. That's true whether or not a foreign company is owned privately or by the state."
You beat me to it =)
The fact is France and Germany have state ran banks that we allow to buy into our markets so let's not have double standards here guys. Second the answer to protectionism is not to answer it with more protectionism. There was alot of people that said the samething about Europe when Reagan took office, most of Europe's industries were state ran and Regan introduced alot of trade liberalization at this time. The "fair traders" came out of the wood work then, proved to be wrong. England under Marget Thatcher introduced massive privatization and their economy is now the strongest of all the old european powerhouses. Now we are starting to see more and more pivatization from France and Germany because they can't compete with England with their socialistic system stifling growth. We are now seeing the same thing as India starts to liberalize their markets for the first time their growth of gdp is doing laps around China's. Protectionism is the argument of Republarcrats. India will force China to privatize at a faster rate through competition NOT protectionism from the US Congress.
Just one more supporter of John. I'm just going to paste it one more time because it is immensely important:
Even if the Chinese government completely banned US companies from access to China, it STILL wouldn't make economic sense for the US government to thwart Chinese access to the US.
I suggest reading "The Race to the Top: the Real Story of Globalization" by Tomas Larsson (last name perhaps spelled wrong)
By the way, he's a Swedish guy, so you may need to order the book... check out Amazon or Laissez Faire books. But it's a very fun and interesting - as well as open minded and free of dogma - book.
I think we should keep a link here to Austrin School of Economics. The early arguments sounded like callers on Rush's talk show a couple of weeks ago when libertarian Walter William, head of Economics at George Mason University, filled in for the purple pill poppen host. Every caller started by saying "I'm for free trade but..." and then would go onto argue protectionism. The topic was free trade. It seems like a lack of knowledge here in our own party about Smith's "invisable hand" theory and other basic economic facts that prove that our economic postion is the only one scientifically backed.
Oh man, the invisible hand theory! That takes me way back. I remember learning it in college. I thought it was the coolest theory ever. I mean, what's cooler than an invisible hand?
It bears noting that almost never have we actually had true FREE trade. Trade has always been government managed or taxed or interfered with in some manner.
Hell, even the founding father's thought the best way to get income was through tariff's and excises. But yeah, I think completely %100 free trade is not vital. 98-99% free trade, yes, vital. Right now I'd rate our free trade a %60 or less.
What about the entire embargo on Cuba that's been around for sixty years? Isn't that a bigger outrage? Or is that good...
The zero dues plan and I agree with Tim West 100% on his statement in yesturday's blog post. I can guarantee you about 98% of any new members that come to the LP will be people that were once a Democrat or a Republican. People that come the LP from other third parties like the Reform Party, Green Party or The Constitution Party like me will be in 2% percent range. The main focus of new members will be Ex Democrats and Ex Republicans. any new members that come to the LP at any level will be fine.
Personally, I don't see anything "free" about the Chinese wanting full access to our markets, while they have restricted our own trade.
The market isn't "free" unless it flows freely both ways.
(Captain Obvious to the rescue!)
Captain Obvious-
So you support the state telling people who they can and can't sell their property to? You have failed to argue why the points Jon and I made are inaccurate. No one is arguing that China has an open market, what we are arguing is blocking the sale is a property right violation and that protectionism is always a bad thing for the American ecomomy. Show me one economic model that supports your argument.
Libertarian Reformer, approximately 40% of the voting population are not affiliated with any political party at all. We're much more likely to attract them than someone who is a member of a party. That's basic Political Science 101. Your claim that you can guarantee that 98% of new LP members will be former Democrats or Republicans is rubbish.
Rob says: "The market isn't "free" unless it flows freely both ways."
That is correct. However, the argument that has been made is that 50% free trade (flowing one way) is better than 0% free trade. It matters not which nation has access and which one does not, they will both benefit.
I still hold on to the belief that the people who OWN the company would be better qualified than politicians to decide which bid to accept.
If the US unilaterally eliminated all trade barriers tomorrow (regardless of what other countries do) we would see a massive surge in economic growth as prices came down and individuals had more liquidity with which to invest, save or spend.
Trade as a weapon is a very poor one because every time you punish another country, you also punish the American people.
Look at Canada and the SLA (Softwood Lumber Agreement) Bush refused initially to support its re-authorization and, in fact, imposed protectionist level import duties on Canadian lumber. The result, the American timber industry aplauded their new status as a protected industry, but American firms that produce finished wood products and imputs into finished wood products suffered greatly and so did home buyers. It is estimated that the tariffs increased the price of a new home by about six hundred bucks. That doesn't sound like much, but it squeezed about 200,000 marginally credited potential homeowners out of the market.
Not CHAFTA,
Sino-American "Free Trade" Enhancement Agreement
SAFTEA :-)
I'm just curious as to how high our tariffs on foreign goods should be. 0-5%? 5-10%?
Jim Allison and others:
"The argument that has been made is that 50% free trade (flowing one way) is better than 0% free trade. It matters not which nation has access and which one does not, they will both benefit."
I've heard this argument and it is applicable in some cases but not all. I believe in free markets just like the rest of you. They are the simplest and most effective way to bring prosperity to all. I also don't like the idea of our government telling people who they can or can't sell their property to. However, there are other issues here besides free trade.
Oil is the lifeblood of our economy and our entire country. Any disruptions to oil supply no matter how minor can have a drastic effect on every single sector of American industry. From the steel makers of Pittsburgh to a kid selling lemonade on the street corner, oil plays a huge part in their respective businesses. A major disruption to the oil supply could have disastrous consequences for all of us.
We are already forced to play nice with countries like Saudi Arabia because they control so much of the world's oil supply. Because they control this vast oil supply, they also have control over our economy. Of course in the free market, everyone has a kind of indirect influence over everyone else. Countries can alter their production levels to either harm or help others. The oil embargo against our country in the late 70s is a prime example OPEC using their oil monopoly as leverage against us.
The US government not wanting China to buy Unocal is our government's effort to minimize any more hostile external control of our economy. If it were any other industry besides oil, I don't think you would have heard a peep from Washington. However, when it comes to the lifeblood of our country, they want to minimize foreign influence. And even though it goes against every free market bone in my body, I see the rationale behind what they're doing.
Seems even a few libertarians need to update their outdated notions of China. Hint: Mao suits are out of fashion now.
Free market means free market. China's market is becoming freer by the day. Why should the US take a "great leap backward" in our engagement with China by throwing a hissy fit over a private transaction relating to less than one-third of one percent of our oil instead of standing for free market principles? Has our statist government in Washington gotten so far from it's roots to forget what a free market is?
How about let's leave the principled hypocrisy to our neo-con brothers?
Speaking of neocons, I heard of the new Rolling Stones song "Sweet Neocon." What's your opinion on this song? Personally, I think it would be funny if they did the song "Sweet Neocon" to the beat of "Start Me Up". How about it?
Adam-
You touch on a big difference between the big price increase in the 70's which was supply driven and the price increase today which is demand driven. The fact is American oil refineries have actually decreased refinery by 2%. The reason is that the price increase has not decreased demand. Now compare the .3% oil that was involved in the oil deal and the 2% voluntary decrease in refinery and try to say with a straight face that this has anything to do with national security.
From what I know about the People's Republic of China, I feel that it is best described as resembling Nazi style corporatism. Eventhough the state may not own all buisnesses, it still controlls them. I don't know about you, but I for one sure wouldn't want fascists controling american industry any more than Communists. By the way, the american government agrees that oil is to valuable an industry to fall into foreign hands, because they didn't object when the Chicoms tried to buy Maytag. As one Republican congressman said,"we don't go to war over refrigerators.
The demand for oil is absolutely exploding in China and is steadily increasing in the U.S. On the other side, supplies have most likely peaked and within a few years will slowly begin to decrease. The result will be a steady increase in oil prices as as the demand curve increases and the supply curve starts to fall away at an increasing rate, oil prices will just start surging away into the sky. To say this has anything at all to do with foreign policy is laughable. This would have happened with or without 9/11 or Iraq or anything else. Enjoy the cheap gas, it is only going up from here. Of course, eventually, prices will hit a point of unsustainability and the economy will collapse, hard to say how far in the future that will occur.
Adam - A couple of problems with your analysis.
First off - Oil is cheaper today (in constant dollars) then it has been since the 1950's. The low price, which had been falling (more or less) for 50 years, indicates that there is no shortage of oil. Its a myth.
Here is a chart to illustrate that point:
http://oregonstate.edu/Dept/pol_sci/fac/sahr/gasol.htm
Second - We get most of our imported oil from those hotbeds of instability Canada and Mexico. We could easily give up Saudi oil tomorrow without even approaching the kind of prices that they pay in most of Europe. We don't get any oil from Iran and our total take from OPEC countries is relatively small.
Total Imports of Petroleum (Thousand Barrels per Day)
Country YTD 2005
CANADA........2,078
MEXICO........1,578
S. ARABIA.....1,615
VENEZ...........1,590
NIGERIA.......1,071
ANGOLA..........505
IRAQ.................516
RUSSIA............419
U.K................356
ALGERIA.........414
ECUADOR.......324
VIRGIN
ISLANDS.........302
NORWAY........217
KUWAIT.........198
GABON............161
Also, OPEC is far less effective due to free-riding (when the cartel pushes prices up, OPEC countries cheat, sell excess reserves into the market and drive prices right back down) then they were in the 70's when OPEC countries were more unified as a bloc (for various reasons including Arab Pan-Nationalism, the Yom Kippur War, etc.)
What I am saying is that we are well buffered against oil shocks. $2.50/gallon may seem like a lot, but it actually costs less per mile driven then at any time in history. No one planned it that way, but that's how the market has shaken out.
As far as the Unocal deal goes, it was pure politics. Interests groups on the right and left would have killed the administration over this deal, but it would have been about protecting special interests, not protecting the oil supply.
We have not even started to drill where we know that their is huge deposit of oil. The last inventory count that was reported to the NYSE was very large. The reason that the oil companies have not started to refine this into the light sweet crude that we use is that they are maximizing profits. We have seen a good growth the last few years despite the risen oil prices. They will start refinening this inventory the second the economy starts to buck. First thing you are taught is that you charge what the market is willing to pay. The demand has not shrunk even at 64 dollars a barrel.Oil companies have already position themselves to increase the inventory if the economy starts to slow. We have seen large purchases of drilling equipment by these oil companies to replenish the inventory when they deciede to start to refine it. Just a little bit of homework or just ask your broker they will tell you everything I said was true.
Another thing to look at is that Land and Fiber Company out of Canada claims they can refine hemp oil at 71 dollars a barrel. The big reason that this has not been legalized is that it was never been competitive with petroleum oil. Last year we were at 45 dollars a barrel. So the worst case scenario, hemp oil becomes legal and we have a new fuel source. But before that happens the oil company will simply up refinary (which I mentioned before has actually decreased 2%) and up drilling to keep inventory levels up and that will cause a drop in price. No gloom and doom. This is just being used as an excuse for protectionism and interventionism.
Amen matt, you really know what you're talking about.
Basically, China restricting the U.S. is not reason for the U.S. restricting China. It is true that the market is not truly free without being free both ways, but being free one way is better than not being free at all. Sorry if this has been posted already, I'm just stating my belief.
Hey, speaking of the tables turning in regards to us and China, check out this shirt I made:
www.cafepress.com/youngpatriot
I hesitate to post a link for a shirt I'm selling here, I'm not out for free advertisement. It's just I think it's funny/relevant and I first heard about cafepress.com on the LP website and started playing around with it and it's great fun. Just thought I'd share my experience.
Matt, Jayhorn, Free2smooze:
You all make very good points and seem to be very well versed in this area.
The reason demand for oil has not decreased even as the price skyrockets is because the demand for oil is almost completely inelastic. Until we have a viable, economic alternative energy source, businesses will always pay whatever it takes to get oil or gas and then simply pass that extra cost down to each of us.
I personally have no problem with this because it is simple economics, and the market isn't always friendly to the consumer. I know that gas prices are still relatively very cheap when compared to inflation and the price of other goods. Free2smooze points this out very well in his link.
Jason Stumpner makes a good point that some of you fail to realize though. China is still a long way off from being a free country. In China, if you search "democracy" on Google, a government censor comes up and threatens you. Also, Tiananmen Square was only 16 years ago. I'll agree that China is making plenty of free market reforms, and perhaps they are on the right track to becoming a free nation. But as they are now they are hardly a country that I want having control over any of our oil supply even if it is only 1/3 of one percent.
CAFE SHIRT idea is interesting, I have another shirt idea like YOUNG LIBERTARIANS, THE NEW GENERATION.
I may not be an expert in economics, but I think two reasons why oil prices are so high are:
1) Oil is such a large necessity.
2) And that there are no other legally available substitutes to it.
Therefore, the oil prices continue to rise.
Correct me if I'm wrong.
TO ROB EICHENLAUB have you been getting my email, I sent you some articles and haven't heard back. BTW I click on your name which put me directly to your web site. VERY NICE. Now that is a nice web page.
Tommy and Adam-
Adam I know in the last year or so oil seems to be a very inelastic product but the fact is we have seen pull back in the economy bring about price droups in the past. Before the $20 a barrel increase we saw alot of sideway movement on the oil price. Your fear is based on propaganda, right now we have no supply problem. Letting China buy .3% of oil that is currently in the hands of an American company will not hurt the supply side. I know we hear alot of bull about 100 dollars a barrel don't believe it. You have to remember alot of analyst that are pushing this crap have bought oil at 60+ dollar a barrel and only make money if they can push it higher. They never point out the main reason the oil prices have risen like they have. Fear. Not facts. Oil companies will not increase supplies because that would cause the price to come down when the demand has not lessen. But to get to Tommy's point, you are right that right now we have no substitute for sweet crude, although natural gas is putting a huge dent in their home heating market. The price per barrel is starting to enter the point of making certain alternative fuels like hemp oil more attractive to investors, this alone acts like a price ceiling, oil companies know that at a certain price they will let new players in the game. They won't do this. It makes more sense for them to take a little less profit at 65 dollars a barrel then to let a competitor in. I don't think it will go much higher then 75 dollars a barrel and it won't stay there long. Don't let the government scare you into suppoting programs that you know in your heart are wrong, they simply are not based in facts but irrational fear.
Matt,
Very good points. You are right that the specter of $100 barrel oil does scare me. As Free2smooze points out, Oil prices have been due for a major correction for a long time. I just hope that correction comes at a pace that our economy can absorb and that it doesn't come too fast. I hope you are right about the prices leveling off too.
I'll agree with you that speculation in the market is a huge reason oil prices are climbing so fast. Oil prices today are not where the supply line and the demand line meet.
We would solve so many problems if we could just find a viable alternative to oil. Hybrid cars are a start. You'd think that in this day in age, where we are sending robots to mars and having people live in space, we could find a better way to get around here on the ground of our own planet.
Besides crude oil, hemp oil, hydro-electric power, solar energy, wind energy, and nuclear power, what other sources of energy can we tap into?
Also, how soon will the private sector get involved in exploring these forms of energy?
I would like a ticket to move to the next planet that is habitable.
"Also, how soon will the private sector get involved in exploring these forms of energy?"
I'm guessing they're waiting for either a subsidy (carrot) or a regulation (stick). As I understand it, the principal reason we have the two or so hybrid models we have now is due to one or both of the above reasons. Maybe the gas prices will finally get Detroit off it's ass and started on alt fuel vehicles.
Hey, there's at least four hybrid models (including the new Ford Escape Hybrid, which is a hot commodity). As for that Detroit comment, I'm going to let it slide. Besides, it's the japanese manufacturers that are actually making the hybrids, and would be more likely to make other alt fuel vehicles. Until then, why don't you buy a Honda Insight, which gets an average of 60mpg (some customers report getting over 70mpg) or a Civic Hybrid. Also, there's the Toyota Prius, which has the second best mpg on the market.
Go to www.fueleconomy.gov for more info.
By the way, I've seen more and more of those god-awful ugly H2's around here. Way too many. If people were as concerned about the gas prices as they say they are, more people would buy hybrids, or at least other cars that have better gas mileages.
FOR FREEDOM--
Sorry about the wait on your emails. I receive over 100+ per week, and spend most of my time in my mailbox just answering questions and sending out proposals. It's hard to keep up with the personal emails.
I'll write you tonight.
Thanks for the compliments!
Jim says--"I still hold on to the belief that the people who OWN the company would be better qualified than politicians to decide which bid to accept."
You know, this is a good point I hadn't considered. It's a tricky situation, but in the end it's probably better to leave it up to the market to fix itself. I do like to see the business owners having the final say in these matters, not the government. I think someone here stated a point intelligently enough without macho-flashing, that I changed my mind for once!
See, it does happen from time to time.
I, of course, agree that the owners should decide whom they sell to, not the government.
More generally, what bothers me with the way America practices free trade is that it is designed to work for corporations, but not for private people. With NAFTA, a company can import goods freely from Mexico. Try walking across the border into San Diego with groceries and other items you shopped in Mexico and see what US Customs says. Europe has enabled cross border shopping with a strong benefit to the consumer. For, example Swedes now buy over 50% of their alcohol legally in other countries and this is putting pressure on the government monopoly to lower prices. Swedish supermarket prices are in freefall (compare this to Norwegian supermarket prices, where Norway has not embraced freer trade, and remember that 20 years ago Swedish prices were more expensive than Norwegian prices). My point is that the Libertarian Party should also be vocal with free trade regimes in making their rules part of US Customs rules so that they work for private people as well as big corporations.
Why do so many people that I have heard on other mediums have such a hostility to free trade or even low-tariff trade?
Because, tariffs "protect" the american businesses and workers. A free trade or low-tariff economy would invite people to buy from other countries what they could buy from businesses here, therefore "destroying" our businesses here. Sure, there's no logic in it, but that's what they believe. Nevermind that without free trade, we have so many businesses outsourcing anyways, which hurts american workers even more than buying a Toyota.
I agree with David, regarding free trade with Mexico. Under our current system, mexican guest workers come and work in this country, making at least five times in dollars what they would be making in pesos in there own country. And then they take our money back to Mexico where they have more purchasing power. If americans were allowed to also purchase things in Mexico, it would not only benefit the mexican shopkeepers, but it would also benefit the american workers by lowering the demand for cheap labour from guest workers.
Actually as I understand it both the CAFTA and NAFTA treaties equalize or remove taffies. Tariffs serve as a barriers to free movement of products across borders. These treaties should allow prices to find support based on supply and demand.
Not to criticize but this but that is not free trade. We have free trade between California and Nevada, New York and Maine. Free trade does not require reams of paper in the form of a treaty but it is just better than the past agreements.
Treaty opponents have taken a protectionist position because they very clearly understand competition from lower cost suppliers threatens their livehood. Because those competitors are in a foreign country their argument gets some traction with those that are affected and those that are not well informed and others that just oppose the which ever party is in power. Because they are correct doesn't mean free trade is not best for everyone concerned
Seems to be inevitable and will so intermix economic interests nations will be bound together more closely.
Nameless poster - I'm sorry but how can these two agreements be called free-trade agreements when they each contain thousands of pages of trade regulations?
All - I have heard about this book called "The Size Of Nations" and they say that in spite of greater economic globalization, there are more independent countries now than before. In fact, there were about 75 independent nations in 1945. Today, we have 193 independent nations. If this trend continues, then that number will reach approximately 310.
Someone seems to missing the point that China is a slave state. There are no free enterprises nor a free market in this nation, so any relations with any business there is a de facto relation with a foriegn government. Most Libertarians should know how we feel about, and trust governments.
The Chinese continue to occupy other nations. They have stated aggressive intentions against this nation with a particular threat of nuclear attack.
While I am totally in favor of a free market I am still opposed to doing business with a country that has threatened our country with nuclear annihilation and continues to enslave it's citizens and the citizens of nations accquired by conquest.
It is beyond my comprehension that any business would wish to engage in commerce with such an entity.
That being said I have no problem with our government withdrawing support or cancelling contracts with any company that chose to do business with totalitarian statists.
There is a point where wishful thinking must be balanced with sense and historical perspective. The actions of totalitarian regimes must always be viewed with skepticism and it is always most wise to ere on the side caution. The cost of error could measured in millions of lives.
It is fine for this party to support freemarket enterprise. But it is foolish for LP leadership to suggest that any US corporation do business with the Chinese in the odd hope that this will lead to some capitalist conversion.
The Chinese are currently going through a dramatic expnsion of their military might, with no imminent threat, and they are engaging in military execises with the Russians (remember them?)
One of the great failings of this party is the gross neglect of foriegn relations. It is a fine notion to think that our values will be passed by the osmosis of free enterprise to tyrants. But history suggests that such a notions is most silly.
The leadership of this party to pay close attention to the entire scope of libertarian principle before speaking out against government policy.
Let us speak when we can make sense.
Tommy;
Sorry about the nameless post. Lazy I suppose but I can't do anything about it now! Or so says Willy Nelson.
CAFTA NAFTA - When people want to market things it is named how they think best to sell it.
While these treaties are not pure free trade they are agreements and more free than the present. Therefore better than no agreements and a start by removing tariff barriers between the economies.
People migrate toward opportunity to live out their lives in a way they wish. You know, the old pursuit of happiness thing! Religious freedom, political stability and economic opportunity are high on the list. My support for free trade is not for humanitarian reasones but rather as a way to equalize economic differences to create a more stable world.
To all -
What do you think of the European nations integrating their economies into a single market? Also, I was wondering what are your opinions on the establishment of the European Rapid Reaction Forces? Are these good ideas? If so, explain why. If not, explain why not.
Tommy:
What do you think of the European nations integrating their economies into a single market?
"There seems to be little doubt that the U.S. has the largest and most robust economy in history as a result of open trading between the states. If Europe can distance its self from socialism (the zero sum game of wealth redistribution), and move toward a free trade economic model, they should expect generous creation of new wealth. Question is, will those countries set aside short term self-interest for the longer term benefit of a combined market. History suggests otherwise. If yes they would quickly create a near economic peer to the US along with the associated competition for goods and markets in the global economy. As a strong supporter of global free trade I would predict the entire world would benefit as a result of the competition and integration of markets."
Also, I was wondering what are your opinions on the establishment of the European Rapid Reaction Forces? Are these good ideas? If so, explain why. If not, explain why not.
"Then Europe would have a military, able to perform independently. If the French or German military want to rapidly deploy anywhere now, we have to give them a ride because as they lack the heavy lift capability. If we are on the same page good and bad if not, but our military people would not have all the really heavy work. The conflict region is the middle east, and the source of human migration into Europe. Cultural pressures will influence their foreign policy in time. If asked to weight the positive against the negatives I would vote in favor. While one cannot forecast the future with much accuracy, in the near term I don't see Europeans as ither too adventurous or our future adversaries."
These are thoughtful questions from an informed individual! Tommy
Stockman -
I appreciate your take on these questions and the praise. Thank you.
Stockman -
Once again, I say thank you for answering the questions clearly.
Just out of curiosity, would it be safe to say that all of the European countries would be involved in the E.U. Rapid Reaction Forces? Or would this exclude Great Britain (a nation that can already defend itself) and Turkey (a nation that few would consider to be European)?
I also forgot: Will Switzerland be involved or will they stay out?
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I completly believe in the ideas of a free market. That deal wasn't an expression of a free market. After all American companies aren't allowed free access in China, and what is the benefit of allowing them free access to America?
Posted by: Mat at August 10, 2005 02:31 PM