Monday, August 22, 2005

CAFTA Fight Shows We Can Stop the FTAA

"So-called free trade pacts are no longer a theory
to many Americans, as was the case when Congress
approved NAFTA in 1993. Almost a million Americans
have lost jobs as a result of NAFTA alone."


CAFTA Fight Shows We Can Stop FTAA
By by Tom Gow
The New American, August 22, 2005 Issue

The closeness of the CAFTA vote — despite the political pressures the administration applied — shows that we can defeat the FTAA [Free Trade Area of the Americas.]

In the wee hours of July 28, pro-CAFTA forces squeaked out a razor-thin victory in the House by a vote of 217 to 215 — overcoming their final hurdle. The administration had signed the Central American Free Trade Agreement in May of 2004, but refused to allow Congress to vote on the agreement for more than a year, until sufficient support could be lined up. The fact that the administration dared not submit the agreement to Congress sooner, and then had to engage in an embarrassingly transparent display of arm-twisting and vote-buying to get it passed, is powerful testimony to what the informed opposition against CAFTA had accomplished.

We had high hopes of defeating CAFTA. But we are not discouraged, since the CAFTA battle has helped us enormously to build opposition to a more dangerous threat — the Free Trade Area of the Americas — and to make it more difficult for the global architects who want to impose an EU-style supranational government on the Americas to move forward with the FTAA.

On January 16, 2002, President Bush declared "we're determined to complete [the FTAA] negotiations by January of 2005." Those negotiations are still not completed. Moreover, the FTAA agreement was to have been approved by Congress and put into effect this year. That timetable appears to have been shoved back at least a year.

The momentum in the battle to stop the FTAA may be swinging our way. As the Atlanta Journal Constitution noted, "Free trade supporters cheered the Central American trade pact's passage … but said the narrow victory may provide little momentum for reaching their larger goal: a trade zone spanning the Western Hemisphere."

So-called free trade pacts are no longer a theory to many Americans, as was the case when Congress approved NAFTA in 1993. Almost a million Americans have lost jobs as a result of NAFTA alone. Moreover, the trend toward open borders is becoming increasingly visible. Indeed, the CAFTA battle has bought us valuable time to more fully inform and activate Americans who already recognize these alarming trends.

It was a welcome surprise that CAFTA proponents had to work so hard to assemble their majority. Since much of the opposition to CAFTA was based on partisan politics and narrow economic concerns, we were pleased that the pro-CAFTA forces had so much difficulty.

Many who mistakenly view CAFTA as a "minor trade agreement" were undoubtedly puzzled by the amount of persistence, determination, and back-room dealing the administration and the GOP congressional leadership applied to get CAFTA passed. The sheer volume of political pressure is only puzzling, however, until it is understood that CAFTA is not about exporting more American goods to a handful of small countries with little purchasing power.

CAFTA-FTAA proponents have necessarily kept CAFTA's real significance hidden from public view, even downplaying the fact that CAFTA is a steppingstone to the FTAA. Instead, they deceptively argued that CAFTA was about "free trade." This same deception is being used to build support for the FTAA. The real purpose — to integrate the Western Hemisphere and to eradicate our borders — is being ignored and even denied.

This same strategy of deception was also employed decades earlier to get the unsuspecting peoples of Europe to accept the Common Market and (much more recently) the European Union. Europeans were told that the Common Market was needed to facilitate trade and build prosperity, but the intent all along was to build a regional government as a steppingstone to world government. Of course, to expose the NAFTA-CAFTA-FTAA process, we have the advantage of being able to point to the Common Market-EU process as well as to the fact that FTAA architects approvingly cite the EU as their model.

To stop the FTAA, we must focus our opposition on the conspiratorial agenda to build an EU-style government of the Western Hemisphere, not on partisan politics or even on economic grounds. We must also keep in mind that the NAFTA-CAFTA-FTAA scheme, like the Common Market-EU scheme, is a process. Not everything is revealed in the agreements, and if the FTAA is approved, the envisioned power grab (like the EU) will unfold over time. And so we must expose the forces and long-term goals.

We also must apply informed pressure on Congress by building solid, informed constituent clout. Clout, not reason, is the primary language of politicians. Unfortunately, too many congressmen are schooled that their primary accountability is to their party leaders, whom they believe can control their careers. These party leaders are in turn under the sway of the Power Elite whose objective is to consolidate power in a world government.

Building and applying the necessary clout to expose and overcome this top-down conspiracy is only possible through organization. By far the best way to build grassroots opposition and stop the FTAA is to become active in a local chapter of The John Birch Society. During the CAFTA battle, JBS chapters were the focal point of inspiring determined action to pressure Congress to vote no. The closeness of the CAFTA battle shows that the battle to defeat the FTAA is winnable.

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Editor's Note: I'd like to thank one of our gentle WCF readers for the submission of this interesting article. A web-based version can also be found here.

17 comments:

y-intercept said...

Very strange article. Looking at the actual demographics of the countries affected by FTAA. The reported demographics does not appear to show that the countries are being destroyed. Yes, there was a recession that followed financial scandals and the bursting of a stock market bubble. The bubble had little to do with NAFTA.

The biggest economic challenges at the moment is the rising price of gas. This is happening largely because the third world is seeing substantial improvement in their economic condition and demand for oil is peaking.

Yes, it is likely that Americans will have to give up their SUVs if world wide demand for oil continues at the present pace. So friggin' what? SUVs are a poor use of energy.

As for the close defeat of CAFTA. The article only mentions the back door politicking of their opponents. The anti-free trade coalitions have more money and have been politicking at a fevered pitch. Very few PACs have vested interest in free trade. Many PACs have vested interest in convoluted bureaucratic processes which give them an advantage.

I suppose the biggest anti free trade claim is that free trade makes the rich get richer and poor poorer. But, if you look at the business world, you would see that it is the big companies that depend on regulation to block competition that struggle the hardest under free trade.

Other than big oil and military (we are in a war), the primary growth happening in the US is happening in small independently owned companies (the one's without the PACs to buy political influence).

The biggest losers in free trade are the Political Action Comittees whose bread and butter is influence on trade agreements. As such I suspect that the amount of money and influence being peddled against free trade is substantially higher than that being spent in favor of free trade.

Anonymous said...

Kevin

That's some pretty informative stuff, but how does it effect the average schmoo on the streets of Emerald City?

Can you 'splain it to us great unwashed?

Anonymous said...

Kevin,
I suggest that you do more studying of CAFTA.
CAFTA is a treaty which binds us to the WTO (World Trade Organization) which provides for fines for us if we do not comply to the rules of the WTO.
NAFTA is an agreement. You have seen the effects of it. It does not have the teeth that CAFTA has.
I repeat...CAFTA is a TREATY.
It is a fallacy to think that CAFTA is all about free trade.
It is about our joining a coalition of nations in the Western Hemisphere such as the European nations have done with the European Union.
It is about our relinquishing our sovereignty in certain areas.
Paragraph 6 of CAFTA provides for rules under Codex which provides that our vitamins and supplements must be governed by WTO rules. Those rules go into effect in Europe the first of 2006.
ONE EFFECT OF OUR JOINING CAFTA IS THAT WE WILL HAVE TO HAVE A DOCTOR'S PRESCRIPTION TO BUY VITAMIN C OR OTHER SUPPLEMENTS. This is not my opinion. This has been publicized by U. S Rep. Ron Paul of Texas in his drive to defeat the passage of CAFTA.
The midnight passage of CAFTA was all about political pressure. The message was "Vote for CAFTA or you will not get any pork in the Transportation Bill".
Rep. Bishop sold his soul by voting for CAFTA to get money for highways in Utah. It had nothing to do with saving us from Communism.
If he had had any integrity he would have told the Republican hierarchy to keep their d--- pork.

RudiZink said...

I'll say at the outset that I'm all for free trade between nations, and am a true believer in Adam Smith's "invisible hand" of the marketplace, Kevin. In theory, all economies work best in the long-run, when it's the market that dictates wages and prices, rather than the protectionist politicians. This is something I truly believe.

Having said that, I'm concerned that the series of international "trade" treaties that have been negotiated and ratified by Congress, (including NAFTA & CAFTA,) are hopelessly overbroad in their approach.

My main concern is that the enforcement mechanisms of these treaties, which in many cases require adjudication of issues in international courts, operate as an infringement upon the sovereignty of US institutions -- US courts and legislatures in particular.

International treaties are the "Supreme Law of the Land" under the US Constitution, you'll recall, right along with the US Constitution itself. Treaties "trump" most US law, in other words. See Art VI, Section 2, US Constitution.

These international treaties have been sold to us as simple "trade treaties," but they're really much more than that.

It's one thing to say you're pro-free-market, and quite another to support anything that comes down the pike that's labelled "free trade."

It's my fear that the globalists within our governenment have found a "loophole," that permits the "One World Order" wackos to use our very US Constitution against us.

You complain about "political action committees." What more powerful PACs can you think of, when you put the international corporate and banking interests into your example. Next to these powerful interests, the "anti-free-trade coalitions," (your words) are small-fry.

I'd prefer to remain cautious about this. I'm opposed to it until I'm convinced that the FTAA truly promotes its stated objectives and isn't overbraod.

And don't forget the Law of Unintended Consequences. The world economy is a complicated mechanism. We really don't know what will happen if we drastically up-end the system of trade that's existed between nations for oh-so-many-years.

Thanks for your comment, Kevin. I want to hear more from smart guys like you...

I thought it was an interesting article that I posted; and I'm hoping to hear more from you, and everyone else on this topic.

RudiZink said...

And thanks to you, Dortothy.

Great comment!

Anonymous said...

Dorothy writes:
The midnight passage of CAFTA was all about political pressure. The message was "Vote for CAFTA or you will not get any pork in the Transportation Bill".
Rep. Bishop sold his soul by voting for CAFTA to get money for highways in Utah. It had nothing to do with saving us from Communism.
If he had had any integrity he would have told the Republican hierarchy to keep their d--- pork.


We still didn't get our share.

RudiZink said...

Exactlty right, Brian.

When Rob Bishop sold his soul...

he didn't get much of a price for it. Utah got thoroughly "hosed" on highway funding.

Make no mistake. Rob Bishop abandoned his Utah constituents when he voted "aye" on CAFTA.

And don't expect anything from him but mealy-mouthed excuses, when he does the same on FTAA.

Gotta run off to a political meeting tonight, but I hope the gentle WCF readers will keep this good discussion going.

y-intercept said...

So, I just spent a bunch of time reading various web sites from the John Birch society and Rep. Ron Paul. There appears to be a large number of web sites making circular references to themselves. The idea seems to be that if you say anything long enough and loud enough it will become true.

Most of the reputable sources I've found on the Codex Alimentarius, and the documentation on the Codex Ailmentarius site itself indicated that the purpose of the codex is to set labeling and composition standards. Without a codex, labeling standards would have to be done on a trade agreement by trade agreement basis.

You are completely right about the trend from US standards to international standards. Fifty years ago, the US was in the enviable position where our nationals standards became de facto international standards.

International trade reduces the ability of our nation to continue setting defacto standards. This trend from US standards to international standards is happening regardless of whether or not the US participates in trade agreements.

The John Birch society would love to see the US close borders, pull out of the UN and construct a large condom around the US. The Birch society has interesting opinions but I really have never put them in the category of reliable sources of information.

As for the large number of circular references claiming that the Codex is outlawing vitamin C. There are circular references like this on a variety of topics.

SNOPES lists that emails that CAFTA will lead to bans on vitamins as an urban legend.

RudiZink said...

Don't make the mistake of lumping the so-called "paleo-conservatives" with the John Birch Society, Kevin.

There are two distinct branches of Republican ideology today: the "neoconservatives," and the so-called "paleoconservatives."

Whereas the paleos belive in frugal government, non-international intervention and jealous protection of individual natural rights, the "Neos" are just the opposite.

My perception is that their numbers are just about equal between the two factions in Utah.

I can tell you accurately from personal knowledge that the Weber County Republican Party is split nearly even between the two factions. In Utah County, I'd give the paleos the nod. The same thing can be said for Utah "cow counties.

Ron Paul is hardly a John Bircher; and I think it's a mistake to dismiss his message because he's linked to John Birch Society websites. What Ron Paul is doing is keeping the torch lit for the paleos. That's all.

And this "circular reference" thing is pure BS. It's natural that like-minded folks would link to people and places with similar philosophies.

Anonymous said...

I have been meaning to write about this particular impact of trade agreements on one part of the American economy for some time, and since it is once again in the national news, and this thread is conveniently here, here goes.

What NAFTA Did To The Film Industry

What happened first was that producers in LA realized that, with the lower Canadian dollar, megabucks could be saved by shooting film and TV in Canada. It was cheaper at first to shoot in Canada and fly home to LA every weekend, than it was to stay and shoot in LA.

Everyone who worked in the film industry in the US took a hit from this. Utah, for example, would at times have three or four film and TV projects going on at once. With NAFTA, this dried up.

Know what America's solution is to this??? Many states are now offering tax incentives to film projects who use those states as a location. Utah is one of those states.

This is from KTLA, and is accompanied by a huge feel-good article about how the whole US is now Hollywood's back lot:

Comparing the incentives
Calculations prepared for a recent conference of film and television producers speculated about the potential money that could be saved in states with aggressive incentives. Here are the data for a hypothetical production that would cost $19.24 million to produce in Los Angeles:

Total State Total

production costs incentives adjusted costs

Utah $19,077,649 $500,000 $18,577,649

Illinois 19,394,120 884,008 18,510,112

Louisiana 19,077,649 1,041,997 18,035,652

New Mexico 19,099,212 1,301,000 17,798,212

Florida 19,386,400 2,000,000 17,386,400


Other quotes from this article include:

Universal Pictures filmed only about 30% of its new thriller "Skeleton Key" in Louisiana, but nevertheless earned about $3.4 million in state tax credits on the film's $43-million budget.

Louisiana last year paid out $67 million in tax credits to movie and TV productions, and has dispensed about $40 million already in 2005. The state estimates that 2004 productions generated $39.4 million in production-related payroll to state residents and a total of $125.9 million into the economy....

..."They never gave us a chance," Katherine Oliver, commissioner of the New York City Mayor's Office of Film, Theatre and Broadcasting, said of the Giuliani movie. She also said the Ashley and Mary-Kate Olsen movie "New York Minute" left the state for Canada in "a New York minute. People wouldn't even consider New York because there wasn't a tax credit."


Now, believe it or not, Hollywood, California itself is faced with having to give tax incentives in order to get people to stay home.

Closer to home here in Utah, the made for TV movie about Elizabeth Smart's kidnapping was shot in Halifax, Canada in 2003. Despite the knowledge of how much money film puts into the Utah economy, and the fact that the actual Utah locations could have been used, it went there.

And furthermore, Jon Voight right now is beginning to shoot a film which is tagged on this site as:

a love story set against the 19th century massacre of a wagon train of settlers in Utah at the hands of a renegade Mormon group...

in Calgary.

Those are two that, in my opinion, Utah should have had. After all, they are Set in Utah, and we have top notch people here. But they went to Canada, because of the lower costs.

Nowhere in this article did I see NAFTA, the cause of all this, mentioned. Instead, it reads like an oh, what fun---Hollywood all over America! piece, and the state tax incentives for film seem almost like an exciting competition. Read it for the facts and figures though--much research went into it and the numbers are there.

Probably economic development all over the US is looking at state tax dollars to try to figure out how to entice those film dollars. The attitude seems to be that this is now what states have to do and they will do it. The fact that a trade agreement, NAFTA, caused this state of affairs is seldom or never mentioned, almost to the point of making one wonder if people even remember that there was once a time when states didn't have to do this.

y-intercept said...

I think the problems with the film industry has more to do with artificial costs created by various screen guilds that control the industy. Going abroad to film happens regardless of free trade pacts. You might recall the large number of Spaghetti Westerns in the 70s.

Dorothy Said: "I repeat...CAFTA is a TREATY."

You need to log into Wikipedia and update their misinformation. The Wiki says CAFTA is not a treaty.

BTW, I do agree that this tendency toward international standards committee is troublesome. We end up with these massive bodies like ISO, W3C, etc., putting together industrial requirements. There really isn't any big legal force to restrain them.

Regardless of whether or not we have treaties, the FDA must work to "harmonize" its labeling requirements with those of the international community. Failure to do so would hamper the ability of American industries to compete abroad. Harmonizing with a international Codex sounds freightening, but it really is a necessity.

To make harmonizing sound even more nefarious. The reasons for "harmonizing" are economic. It is easy to say this in ways that make it sound that the FDA is selling American health for industrial profits.

Anonymous said...

kevin said:

think the problems with the film industry has more to do with artificial costs created by various screen guilds that control the industy. Going abroad to film happens regardless of free trade pacts. You might recall the large number of Spaghetti Westerns in the 70s.

I agree with you that there have always been location shoots out of this country. I would in addition mention that inflated costs are also due to the huge salaries and perks demanded by above line management. However, the situation we now find ourselves in is that individual states, which depended on the film industry to fuel their economy, are now in the position having to offer tax incentives, comprised of citizen tax dollars, to lure film in.

And that last didn't happen before NAFTA.

Anonymous said...

As for the film industry, one has to consider the unions. Right to work states lure many productions and Canada is even cheaper. SAG standard rates apply but in places like mentioned, you won't find any Teamsters.

Anonymous said...

Dian

Various states have been using tax incentives to lure film makers for many many years!

Canada has been doing the same for all that time.

None of it started with this NAFTA and CAFTA stuff.

Anonymous said...

Ozboy, this is from the July 2005 Association of Film Commissioners International document for Incentives in the United States. I only copied the ones that had dates on them--I know there are more that passed Incentive bills recently, Utah being one of them. The AFCI website has this document as a PDF, and it has links on it to all the participating states should you wish to take a further look at this.

AFCI

Alabama
The Alabama legislature passed a bill on December 1, 2001 that provides sales, use, and
lodging tax exemptions to qualifying producers of feature films, movies-of-the-week, music
videos, and commercials.

California
The Film California First program was launched on January 1, 2001. The program directly
reimburses production companies certain costs associated when filming on public property.

Florida
Financial Incentive: Effective July 1, 2004, subject to specific appropriation, there is created
within the Office of Film & Entertainment (OFE) an entertainment industry financial incentive
program.

Georgia
The state of Georgia announced a new sales tax incentive program in January, 2002 which
rebates sales taxes on a wide array of materials and services for production companies

Hawaii
There are two different sets of tax incentives that may be applied to television and film
production in Hawaii. One is an investment tax credit (Act 221, Session Laws of Hawaii 2001),
geared toward high technology that is applicable to a television and film production company
wanting to establish a presence in Hawaii. The other, the Motion Picture and Film Production
Income Tax Credit, is a refundable tax credit for television and film production taking place in
Hawaii.

Maryland
Maryland recently enacted the "Film Production Activity - Sales and Use Tax Exemption" which
provides for exemptions on property and services used in connection with filming activity.

New Mexico
In March 2002, the State passed a tax credit for 15% of direct production expenditures made
in New Mexico that are subject to taxation by the State.

New York
Legislation establishing the Empire State Film Production Credit was signed into law on August
20, 2004 by Governor George Pataki.

North Carolina
Motion picture production companies are entitled to a cap of 1% on sales and use tax
purchases or rentals of items used in the making of films. In the summer of 2000, the State
created the "Film Industry Development Account" to provide rebates to producers on
expenditures for qualified in-state goods and services.

Oklahoma
JUNE 2005 UPDATE: 4 NEW OKLAHOMA INCENTIVES:
REBATE FUNDED: The Oklahoma Film Enhancement Rebate Program now offers qualified
productions a cash back rebate of up to fifteen percent (15%) of documented expenditures
made in Oklahoma directly attributable to film, television or commercial production.

Pennsylvania
In July 2004 PA passed HB147, the Film Production Tax Credit.

Wyoming
The Wyoming Film Office has asked Wyoming businesses to offer production companies filming
in Wyoming a 10% discount on production related services.


By "recently," I mean since the year 2000. It looks like a trend to me, and I think the cause of this trend was NAFTA.

Anonymous said...

Dian

Just because these states you listed passed these particular pieces of legislation at these times does not mean that those states, and lots of others, didn't have other laws and programs in place to lure film production before NAFTA.

The concept of "runaway" production (a hollywood term) has been around since the late 1940's when US income tax laws made it profitible for producers to film outside of the country - if they stayed out for at least 18 months. Easy to do if you have a slate of two or three films.

Canada has been luring productions since the 1960's with government participation and favorable tax treatment.

This NAFTA and CAFTA biz may have re-invigorated these concepts and even widened them, but they are nothing new.

Touched by an Angel wasn't here for ten years because they liked the weather! The Utah film commision has been luring productions here with lots of different incentives for thirty years or so.

Anonymous said...

Here is the way I see it.

Utah used to have a lot of film production because of the scenery, the non-union crews, a good talent pool, the Taft-Hartley Act, and the all around cheaper labor here. We are also about 90 minutes away from LA by air.

Before NAFTA, Utah was a good deal. Cheaper than LA, but close enough to get back and forth and fly film in and out. Post NAFTA, Canada was suddenly a better deal than Utah.

In 1999, the Screen Actors Guild and the Directors Guild of America funded the Monitor report about runaway production. You can read highlights of it here. Part of this DGA article about the Monitor Report, written in1999 said:

"The Screen Actors Guild and the Directors Guild of America today jointly issued a report showing that the total economic impact as a result of U.S. economic runaway film and television production was $10.3 billion in 1998, up more than fivefold since the beginning of the decade. Economic runaway is defined as U.S.-developed feature films, movies for television, TV shows or series which are filmed in another country for economic reasons.

The report, conducted by the prestigious international consulting firm, Monitor Company, also estimated that so-called runaway production has cost U.S. entertainment industry workers more than 60,000 full-time equivalent positions in the last three years alone. The report also confirmed that the vast majority of out-of-country production has gone to Canada, which has aggressively courted film and television producers with an array of NAFTA-exempted production incentives, including substantial tax rebates."


It goes on to estimate other job losses and revenue loss from hotels, catering, etc. in the US.

It winds up by saying that strategies are being aggressively pursued to stop this outflow of production from the US, and I view these tax incentives offered by the states as one of those strategies.

Perhaps tax incentives were offered prior to NAFTA as you say, but I would think not on the present scale. I do not think competition before NAFTA was as stiff as it is now.

To be scrupulously fair about this, Canada in 2004 attacked the Monitor Report, stating that in its opinion, more dollars are flowing out of Canada than in. You can read about that here in Hollywood Reporter and here in Backstage News.

Just a few days ago, California economic development reported that 60% of all "California" productions were shot elsewhere, and they too are using tax incentives. Article here: CalTrade Report.

If , as you say, incentives were offered before NAFTA, the intent was probably to boost film production. Now, the intent seems more to be a staving off of a total loss of what has become a vital part of many states' economies. There's a big difference there.

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