Austan Goolsbee interview

Tuesday 14 October, 2008

I was glad to see Austan Goolsbee stepping out front again after hibernating awhile after the NAFTA in Canada snafu.  Greg Burns of the Chicago Tribune interviewed him recently U. of C. economist Austan Goolsbee returns to front lines of Obama campaign Here are my impressions of the interview:

-Given Barack is pro-trade, enforcing environmental & labor standards has costs, which make him “pro-trade with expenses.”  These are certainly laudable goals, but the question is at what cost?  Manufacturing is different in different places, so it’s difficult to have it both ways, free trade with strong enforcement.

-1 of the issues US business decisionmakers have to address is where they want to manufacture products for the American market.  Although we produce high-quality products with lots of technology, we’re often much more expensive than where many of our products are manufactured.  There have been huge investments elsewhere in building up manufacturing capacity, so to reverse that could be very expensive.

-to republican macroeconomic mismanagement, in a simple world, you can divide constituents into a few different camps, consumers, workers, & investors.  The republicans typically look out for the interests of investors, & until recently they have done quite well.  Democrats usually look out for the interests of workers.  There are intersections & tradeoffs between these groups, but differences with approaches to these simple groups can explain a lot.

-emphasizing environment & labor in NAFTA will influence our trade relationship with Mexico, where we differ much more drastically on these issues, than with Canada, where we’re much more in sync on these issues.  Our trade with Mexico has increased dramatically since NAFTA, & slowing that down might do very little to stem the tide of the Chinese product invastion.

-I’d appreciate knowing specifically what the loopholes & giveaways in NAFTA are.  I don’t deny that they exist.  I just wonder where they are, how big they are, who’s benefitting, how much, etc.


One comment

  1. Michael,

    You are doing a great service for people in general and professionals involved in international work with you timely and informative blog. Let me know of any specific events related to Latin America.



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