Boeing, etc and Int Trade

[Bill Greenwood]

There is a lot of talk now about international trade agreements. I dont know or understand much about them. Does anyone have a SIMPLE explanation?
Are they generally good for some companies like Boeing, GE (engines) which have huge foreign customers? Are they good or bad for U S consumers or some segment of the work force?
Please, Id like to know the background and the unbaiased facts, lets not make it about any candidate.
In fact it is confusing enough that some advocates or candidates who are normally allies have opposite stances on a agreement.
Thanks and again , please keep it factual and unbiased if anyone knows about this idea.

[rwanttaja]

There is a lot of talk now about international trade agreements. I dont know or understand much about them. Does anyone have a SIMPLE explanation?
Are they generally good for some companies like Boeing, GE (engines) which have huge foreign customers? Are they good or bad for U S consumers or some segment of the work force?
Please, Id like to know the background and the unbaiased facts, lets not make it about any candidate.
In fact it is confusing enough that some advocates or candidates who are normally allies have opposite stances on a agreement.
Thanks and again , please keep it factual and unbiased if anyone knows about this idea.

It's hard to answer a political question without delving into politics. Also, "International Trade Agreements" is a rather broad term. It's like asking, "Can someone explain the Federal Aviation Regulations?"

All countries want to promote export of their goods, and nurture their own industries. However, these factors are scrambled by other factors, when the government of Country A wants a certain political favor from Country B, and offers a trade concession of some sort to "sweeten the pot." So a treaty might be signed, to reduce the import duties Country A imposes on framistats produced by Country B, in exchange for cheaper iron ore from Country B...whether or not that iron is actually used to build framistats. Doesn't have to have anything to do with production either. Could be just a straight political favor, such as supporting Country B in a border dispute.

This isn't necessarily limited to between countries, either...sometimes companies themselves work directly with the countries.

Here's an example. A while back, I was peripherally involved in a major new satellite communications system. The company we were developing the satellites for needed reservation of its operating frequencies around the world, which is handled by the UN's International Telecommunications Union (ITU).

We had three bids for building the solar arrays, and accepted the one that cost about twice as much as the other two bidders. But it was a major Government-owned company in Country B, and the company developing the SATCOM system needed that Government's support to win approval at the ITU.

Ron Wanttaja

[dclaxon]

Does anyone have a SIMPLE explanation?

I don't think there is such a thing as a simple explanation of international trade agreements. Or anything else the guv'mint is involved in, either.

Dave

[FlyingRon]

Sure. Almost everything done in international trade is done on the basis of reciprocity. If we raise a tariff on an imported good, the foreign country similarly raises tariffs on our goods. It generally has been found that lowering the barriers to trade benefits the economy's on both sides. ( In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. )

The President can't enter directly into these agreements. The Constitution requires agreements with foreign governments (called TREATIES) to be approved by the Senate. Therefore we need things like GATT and some of the things like NAFTA and the TPA to be negotiated by State and approved by the Senate.

[Dana]

Free trade agreements are good for companies who sell products overseas (and their workers). They're good for companies (like Walmart) whose business model is to buy cheap foreign products. They're bad for companies (and their workers) competing with overseas companies that can produce products cheaper. They're real bad for workers formerly employed by companies that move production overseas.

In a perfect world, it wouldn't matter. But we're competing with overseas companies with vastly lower labor costs, that aren't burdened by US environmental regulations, OSHA, workman's comp, unions...

I would like to see tariffs large enough to offset the difference in regulatory and labor costs, but not enough to prop up truly inefficient industries.

[FlyingRon]

Sorry, Dana, but I do not agree. This would be true if the US wasn't exporting things to other countries, unless you have a way out of line trade balance, lowering the barriers helps both sides.

[Kyle Boatright]

Why is this on the EAA's discussion forum? There have been several similar threads recently that are potentially interesting. But they belong elsewhere.

[Mark17]

Why is this on the EAA's discussion forum? There have been several similar threads recently that are potentially interesting. But they belong elsewhere.

It's really important to understand the ramifications of any international trade agreement not only as Americans but as pilots as well. Any decision our government makes with regard to international trade specifically has a direct impact on us as pilots so it's important to understand the pros and cons. International Trade Agreements are directly corralated to the price of goods and services as well as supply and demand which in turn directly impacts both our economy and our jobs. All of this comes right back to flying and impacts everyone on this forum. Just look at Oshkosh attendance numbers of late and compare that to just a few years ago before Jack took over. There was questioning at the time if Airventure could be saved. None of that would of ever happened if the economy hadn't fallen apart to the tune of the greatest economic disaster since the Great Depression. It's all directly corralated and it truly matters. Talking about it and learning about it is extremely important. It doesn't have to be political but moreover, it should be a positive and educational robust discussion. If Bill wants to know what other forum members know about the topic, it's a great place to start. As pilots, we as a group are pretty intelligent. Why not ask other members who might have some intelligent insight and background?

[Dana]

Sorry, Dana, but I do not agree. This would be true if the US wasn't exporting things to other countries, unless you have a way out of line trade balance, lowering the barriers helps both sides.

Tell that to all the unemployed people who have lost their jobs due to cheaper imports, or when their own company has moved production to somewhere cheaper overseas. Our trade balance is way out of line.

[martymayes]

Why is this on the EAA's discussion forum?

Because EAA related topics don't seem to generate much interest and participation?