Search This Blog


CAFTA votes more political gain than loss for Louisiana lawmakers

The Dominican Republic-Central America-United States Free Trade Agreement (better known as CAFTA) has now passed both houses of Congress. Divisions within the state mirrored the close (Senate) and closer (House) vote on the measure.

There is little question that CAFTA will benefit the country as a whole, but the fact is it does remove protections from, in particular, sugar farmers. This was the main impetus behind the nays of three state Republicans when it came to the vote.

It’s no accident that the two Republicans (Reps. Bobby Jindal and Charles Boustany) who voted against it have somewhat sizable sugar interests in their districts. Nor is it unexpected that Sen. David Vitter would cast a vote against it, given the narrow margin with which he won (even if in the primary) his seat – sugar interest votes do count.

At the same time, it is unfortunate that these Republicans had to abandon their principles concerning minimal intervention of government into the economy in order to vote on behalf of the individual interests of a portion of their constituencies. In reality, little in the way of sugar production will be lost and, frankly, if some Louisiana sugar producers go out of business as a result of this agreement, then this means their talents and resources would be better served by going into other lines of business.

Nonetheless, from a political standpoint, the interests of all sitting federal legislators were served by their actions on these votes. Jindal and Boustany will lose hardly any votes for their vote – even if on the losing side, their free trade impulses won – and Democrat Rep. Charlie Melancon, the most vulnerable Democrat in the entire House next year (because Pres. Bush outdistanced him by 8 percent within the district, more than any other successful House Democrat, in 2004) only solidified his credentials to a good portion of his constituents.

Vitter’s vote against it last month (joining Sen. Mary Landrieu) statewide will win him more votes than it loses him, but one must question his zeal in complaining about the defeat. More behavior like that would lead objective observers to question whether he really is as reliably conservative economically as he always has seemed to be, keeping in mind that protectionism, championed by some who call themselves conservative, is not really a conservative position.


Anonymous said...

Reading about who benefits from what is referred to as "free trade" never gets mentioned. International trade agreements benefit international banks and corporations, water ports and Wal-Mart.

If some wish to debate in favor of "free trade" please read what's available on the book shelf about Mexican farmers and workers. I am reading that most small Mexican farmers are now out of business because of trade deals for corn that were bought shipped into Mexico at a price cheaper than American Farmers crop price and storage cost.

Workers working in factories along the border with the US lose their jobs as soon as the wages paid exceed the cost in another poor country.

There is no plan to educate displaced workers in our country because nobody has a clue as what to teach these people.

On the political side of the issue politicans that stay in office vote with special interest who pay the campaign bills. Representing the people's interest in trade deals is nonsense.

How many purchases have you made in the last year that was such a bargain that it was worth so many Americans losing their jobs?

How does any trade agreement directly help long term any third world worker?

It's all about making more money. If you can have a product made with 50 cent per hour wages and sell it in American at the same price with labor at 12 dollars per hours that is what makes "free trade" desirable. The idea that "free trade" is to the economic good depends on who you talk to.

Jimmy Couvillion

Anonymous said...

Dr. Sadow,

Let me disagree with you only on why Jindal voted the way he did. The First District is not a major sugar producing district (its mostly suburban Jefferson and St. Tammany; and Tangiphoa and Washington Parish doesn't grow sugar cane, although there may be some sugar cane farms in St. Charles Parish). Jindal is eying Mary Landrieu's Senate seat in 2008 and he's protecting himself from Landrieu's attack against him as being against sugar farmers.

Jeff Sadow said...

On Kevin's comment: You're probably more on the mark -- Jindal no doubt also has either Landrieu's Senate seat or the governor's mansion in mind as part of this vote.

On Jimmy's comment: You should really read the Heritage Organization report linked in the posting, it does address the points you are making. The economic fact of the matter is, when arbitrary trade barriers distort capital flows so that less efficient production is subsidized, we lose in two ways. First, the arbitrary transfer of wealth from taxpayers to the people getting subsidized. Second, the fact that those getting the subsidies could be using their resources in a more efficient fashion, which eventually benefits society as a whole. Just because you lose a "sugar" job does not mean another doesn't get created elsewhere as a result of terminating wasteful subsidies -- in fact, chances are it's a better job, or more of them, because now resources are being used in a more efficient manner. This benefits everybody -- from corporate CEOs to the minimum wage earner.

You may also wish to read this link at the bottom, written by one of my colleagues who makes a good, succint argument for free trade by reviewing CAFTA and its opponents' arguments, especially the logic of distorting trade flows by making reference to invisible lines (borders of whatever kind):