SKOWHEGAN, Maine — The Maine Citizen Trade Policy Commission met in the Skowhegan Community Center on Wednesday evening to talk about how the Trans-Pacific Partnership trade agreement could affect Maine businesses.
Commission chairwoman state Rep. Joyce Maker, R-Calais, asked for input from the business owners in the audience, but no one spoke.
In fact, only a few seats were filled in the room, with most of them occupied by politicians.
“It’s too bad there wasn’t a lot of people testifying,” said Rep. Sharon Treat, D-Hallowell, after the meeting. “We have had other hearings where there was a lot of public attention to it.”
As a member of the Intergovernmental Policy Advisory Committee, Treat showed the commission a presentation on what the Trans-Pacific Partnership trade agreement could mean for Maine.
The Trans-Pacific Partnership is a free trade agreement being negotiated among North America, South America, Asia and Australia.
Maine exported shipments of merchandise totaling $3.2 billion in 2010, according to the Office of the United States Trade Representative. Most of the exports were computer and electronic products, paper products and fish and other marine products.
Treat said the TPP can open doors for Maine businesses, but she said she has reason to worry if it is passed.
“The tariff issue has been a big one [for businesses to talk about] because it affects so many jobs here in Maine,” said Treat.
Last month, U.S. Trade Representative Ron Kirk visited a New Balance factory in Norridgewock to see how shoes were made in Maine. New Balance employs about 800 people among three factories in the state, including Skowhegan and Norway.
Tariffs on shoes imported into the United States from other countries help keep prices competitive, said Treat. Cheap prices on products from some foreign countries often come from the result of child labor, low wages and long hours, she said.
“That’s what we’re paying for when we buy shoes,” said Treat. “Every time they manufacture shoes in another country with those kinds of conditions, yeah, we’re getting a cheaper shoe, but it’s at the cost of that.”
An agreement such as the Trans-Pacific Partnership also could create trouble in regard to state laws, she said.
“A lot of times these trade agreements can be used by companies in other countries to challenge our rules and regulations, whether it’s environmental protection, youth smoking regulations and things like that,” Treat said.
She said companies can work outside the court system and use a trade agreement to go to arbitration panels to sue states or municipalities for laws that harm their business.
“It’s a sovereignty issue,” said Treat. “They could sue under a trade agreement and essentially overturn those regulations duly enacted by Congress or state legislature.”
Treat encouraged people to get involved by reading information regarding the Trans-Pacific Partnership agreement and to contact state representatives to Congress and the president. The Maine Citizen Trade Policy Commission regularly writes letters to other countries and to legislators.
A tariff is a tax. It is imposed by the importing country’s government. It is paid to the importing country’s treasury when the goods enter the port. Therefore it can be claimed to be a tax on foreigners, not domestic citizens.
However, the reality is that the cost of the tariff is added to the price of the goods when they are sold to the domestic buyer. It amounts to a hidden tax on the domestic consumers who buy the tariffed goods.
The higher price of the imported goods makes them less competitive with competing domestic products. This turns the free market mechanism on its head. The end result is not better products at a lower prices, only higher prices. It takes a government to accomplish that feat.
Oh yes, about those jobs. There is no direct link to any domestic job. The struggling factory gets none of that tax. The “profit” enabled by the protected higher price it can charge its customers flows to the owners of the factory, not its laborers.
Tariffs raise prices by undisclosed billions, paid by unsuspecting consumers, to support the federal government’s spending, including foreign aid, foreign wars, welfare, and bailing out rich bankers.
So, let’s have a 100% tariff on all imports! If a little is good, then a lot would be …
Aren’t these Trade Agreements intended to reduce tariffs? I’d say the export of manufacturing and service sector jobs (heck, most of our economy) is the bigger bugaboo.
They are not needed to either reduce or eliminate tariffs. All that is required is for the importing country to stop assessing tariffs. It is that simple.
If the exporting country wishes to tax their own citizens using tariffs on their imports, that’s their business.
If the exporting country’s government wants to actually subsidize their domestic producers’ exports that’s even better because that means they will be subsidizing the consumers of the importing country (us) as well.
The problem is, when you eliminate tariffs, the workers of two different economies are asked to go head to head. American workers can not possibly compete with Chinese workers who earn $100 a month without our standard of living heading for the toilet. Just like it is now. The Germans have the healthiest economy on the planet at the moment. There are two reasons for this. One is that they export like there is no tomorrow, and the other is that they buy German. Call it protectionism if you like, but we had better get a little of it back here or we are screwed. Our trade deficit with communist China alone is expected to top $400 billion this year.
How do you figure that a government taxing its citizens makes them more competitive?
All it does is make us poorer as a nation because all those jobs “saved” come at an high price to everyone else who must pay higher prices.
Which came first, the chicken or the egg? If you do not have a job, it doesn’t make any difference how cheap things are, you still can’t afford them. In the last 20 years we have sent our decent paying middle class jobs off shore and replaced them with low wage service sector jobs. This benefits the top 1% and no one else.
We have a difference of opinion on the matter of tariff, and probably taxation in general, but it stems from the difference in our individual perspectives.
You take the “in the fray” view that something, anything, must be done to help the downtrodden.
And the only entity apparently capable is government.
I look at the same situation from a more distant perspective. I set aside, temporarily, interest in the plight of individuals and focus on the cause of the systematic failures that we see all around us. The “shipping of jobs overseas” is not a cause of our economic troubles, it is only a symptom.
A better understanding of our economic plight follows from seeing the problem as that of an erosion of productivity. There are many ways to reduce productivity. Moving manufacturing to areas where the costs are less is not among them. That has the benefit of increasing productivity. (Productivity increase means lowering the costs of production per unit. Lowering production costs is the means to higher profit, lower priced products or both.)
Persisting to produce a product or service in the face of insufficient profit is the recipe for bankruptcy, either for individuals, corporations and governments. Production without profit is evidence that scarce resources are being wasted.
The government is able to prolong production in an unprofitable sector for a very long time, but only at the cost creating waste (removing the profit) in others. It takes a government to do that.
Consumer spending drives our economy. What happens when the consumer doesn’t have a job? What happens when the consumer doesn’t make enough to support the economy? I believe the solution is for us all to show a little more patriotism at the cash register. Like I mentioned, cheaper products are still out of reach if you do not have a job. Anyone who thinks exporting our jobs for the sake of cheaper prices is going to help our economy is sadly mistaken.
“Tariffs on shoes imported into the United States from other countries help keep prices competitive”
BS! All the tariff does is make the rest of us pay higher prices for shoes to PROTECT a mere 800 souls at the NB plants.
Why should well over a million people in Maine pay higher prices for their shoes via the taxation of a tariff to protect the jobs of a mere 800 people?
This is the ugly side of politics that people like Ms. Treat should simply be run out of office for, as she places you and YOUR family lower on her scale of importance simply because she wants the votes of 800 people at NB. It’s pathetic and hard working Americans who value every dollar they earn should tell Ms. Treat where she can put her tariff.
And btw, do you honestly think Ms. Treat purchases ALL of her shoes and clothing from American made manufacturers?
Yeah, I doubt it….and she probably drives an imported car to boot.
You can purchase a pair of sneakers at ChinaMart for $10. How much cheaper do you think they should be? lol. Can’t be much of a tariff.
Boo Hoo BDN, your endorsement of Kevin Raye didn’t work out so well now did it? So now apparently you will censor my comments. Whatever…….sophomoric at best, but better than your reasoning for endorsing Raye….if there is one.