Sunday, January 29, 2017

Trade treaties

All trade treaties try to exclude some countries. Some trade treaties include other clauses such as protection of intelligence properties, worker conditions, carbon emission... that do not make sense to some developing countries.

NAFTA excludes all countries except US, Mexico and Canada. I believe US has a deficit with Mexico and Canada should gain when the pipe line is built. EU has the favorable trade treaties between the members. TPP tries to exclude China. TTP will be replaced by similar treaties for the Asian region including China and Australia.Free trade is good when all participants play the game fairly such as product dumping and other barriers as implemented by China.

China will be next for Trump and it is more complicated than Mexico. The trade war will force China to take counter actions that will not be good for the US. I believe we will lose more than we will gain.We really have to give up some labor-extensive products. A $50 wage will never compete with $2 wage which in turn cannot compete with a 20 cent wage.

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