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To: John Cuthbertson who wrote (2853)	10/21/1997 2:12:00 PM
From: Sam Citron	Respond to of 10921

John, Read "Bhagwati on Trade" column in current Economist: "Fast Track to Nowhere". Talks about this administration's misguided support for preferential trade agreements (PTAs). Bhagwati is an influential free trader and thinks the proliferation of these balkanized protected trade zones may be dangerous, since it is black magic determining where anything is "made" any more. The assembly line worker has less influence than she had 20 years ago. Competition pushes developed countries up the value added chain as we slough off lower skill jobs to LDCs. Need more education to stay competitive. SC

To: John Cuthbertson who wrote (2853)	10/21/1997 2:21:00 PM
From: Cary Salsberg	Read Replies (5) \| Respond to of 10921

John, RE: "My point was that among the public at large there is the impression that freer foreign trade has lowered the standard of living for US workers in general (not restricted to manufacturing, either). I think you might agree that this is not true, that in fact increased and freer international trade has in fact helped raise the US standard of living in general." The economy is in one of the longer upswings of this century and the market is booming, but most reports of real income show it unchanged for twenty years! I attribute this fact to the globalization of the economy and the pressure put on domestic wage rates by foreign labor competition. Free trade facilitates the use of foreign labor, so I do not believe it has "helped raise the US standard of living in general." At some future date, when US wage rates fall to the level of foreign wage rates, free trade will then raise the US standard of living. Unfortunately, I believe the real cost of free trade is that the US democratic system falls far short of its potential because the government is wrested from the "people" by the monied interests. Cary

To: John Cuthbertson who wrote (2853)	10/21/1997 6:42:00 PM
From: LLCF	Read Replies (1) \| Respond to of 10921

Although I certainly agree that in the long run free trade is good for everyone....and not only that...only fair! After all why should a U.S. worker get paid "X" while a Mexican worker will do the same work for "X*.8" or less??? That is not fair. That said...I disagree with your assertion: < But in industries where the US has a comparative advantage, like telecom equipment, microprocessors or Caterpillar tractors, it certainly has NOT.> Your NOT meaning that U.S. workers in these industries have not been hurt by foreign trade. The compartive advantage principle IMO has to do with a natural advantage of one country over another and therefore "naturally" being able to produce a product more competitively than another country....therefore the blue collar "manufacturing" work force I refered to is hurt by free trade because the US does NOT have a comparative advantage in labor (Mexico does)...our telecom equipment and micorprocessor INDUSTRIES do great because of our educational comparaitve advantage over other countries...which may somewhat subsidize the line worker (ie. maybe a line worker at INTC makes more than a GM worker by some amount...I dont know). BUT THE US IS AT A COMPARATIVE DISADVANTAGE IN (blue collar? Unskilled?) LABOR......therefore free trade hurts those people. As for CAT....I don't know where you get your info....here in Chicago land CAT workers on a "real" basis have taken pay cuts for the last 20 years like the rest of manufacturlands workers...your just plain wrong there. <The answer, as you probably know, is: sometimes.> Yea...like in 2 generations blue collar workers offspring will be better off because they didnt become "cobblers"..... Hey, I'm a free trader....but lets face it the statement directly above this one is how it works.....theres no free lunch for those being displaced that the time. DAK