Yoshie Furuhashi wrote: > > Protecting a severely uncompetitive industry must cost money.
If you mean it costs the government money - not in the short run anyway. On the contrary, it provides a few hundred million dollars in tariff income, plus income taxes and the like. The standard trade analysis says it costs consumers money (assuming retailers will reduce prices when tariffs are cut), but ignores workers' loss of income if their jobs go and they can't find other work at similar pay. In the long run, IF there were more productive industry that could replace it, then there is an opportunity cost in maintaining TCF, but that is the crucial "if" which we are debating when we debate trade theory, isn't it? > Can't > you abolish tariffs on textile, clothing, and footwear and spend the > saving on education, income maintenance, & job creation for displaced > workers? If the saving is not enough, you can cut foreign aid also. There are large amounts spent on education, income maintenance, and job creation for displaced workers (there could always be more of course), but it doesn't create sufficient permanent jobs, even less does it create well paying ones in the right regions. That's why I suggest that to be serious about removing protection from TCF, there has to be a conscious industrial development policy to suitably replace those industries. On the other hand, there is no assurance that sufficient industry will survive without protection to provide enough jobs, so somehow decisions have to be made on what mix of industry should be maintained (and how to maintain it) to create full employment. Bill > > >This is a very relevant question for New Zealand. Our textile, clothing and > >footwear (TCF) industry has been reduced from 40,000 to 20,000 workers over a > >decade, largely as a result of tariff cuts. Many of the remainder > >are at risk of > >being sacrificed to a FTA currently being negotiated with Hong Kong. This is > >jobs issue, but more than that: most of those employed are women, Maori and > >Pacific Islanders, and people in small provincial towns, for whom there is > >little hope of other employment (leave alone relatively skilled employment) > >if/when the TCF manufacturers close down. > > > >On the other hand the unions representing those workers - among them one the > >best organising unions in the country - recognise the significance of TCF to > >developing countries, and maintain strong relationships with > >representatives of > >workers in many of those countries. So their advocacy of continued tariff > >protection is not one-eyed. (Incidentally, TCF tariffs are for practical > >purposes about the only remaining tariffs New Zealand has.) > > > >What would a progressive strategy be? > > Protecting a severely uncompetitive industry must cost money. Can't > you abolish tariffs on textile, clothing, and footwear and spend the > saving on education, income maintenance, & job creation for displaced > workers? If the saving is not enough, you can cut foreign aid also. > -- > Yoshie > > * Calendar of Anti-War Events in Columbus: > <http://www.osu.edu/students/sif/calendar.html> > * Anti-War Activist Resources: <http://www.osu.edu/students/sif/activist.html> > * Student International Forum: <http://www.osu.edu/students/sif/> > * Committee for Justice in Palestine: <http://www.osu.edu/students/CJP/>
