November 08, 2024
Letter

What free trade means

If the Bangor Daily News has readers who believe that “free trade” legislation is good for the American economy, I suggest they take a look at March 5’s Wall Street Journal. A front-page article tells the tale of a manufacturing plant in Mexico that in 2001 started losing production orders to competitors in China.

That Mexican plant now has more employees than ever. It has adopted a new manufacturing strategy. Instead of producing “commodity” goods that can be produced in China for less than they can be in Mexico (because Mexican labor is too expensive), it is retraining its employees and retooling the plant so that it can produce more “advanced” products.

The article goes on to explain that globalization is a “double- edged threat” to blue-collar workers, because as low-skill jobs migrate to China manufacturing plants around the world are forced to compete with manufacturing in the developed world.

The average wage in this Mexican factory is around $3 an hour. This wage is a significant advantage that helps the plant compete for manufacturing orders in the American market. In Idaho, the competitiveness of this Mexican factory caused the closing of a manufacturing plant resulting in the laying off of 500 workers. The plant was two years old.

I wonder what happens when the “commodity” manufacturing plants in China decide to retool so that they can also upgrade the types of products that they can produce? Does free trade mean that U.S. workers will have to compete with the lowest-wage workers in the world? What does this competition do to their standard of living, and what does a fall in their standard of living do to the rest of us?

In November we will elect a president and a new Congress. We need answers to what free trade means and what it is doing to America. Waiting four more years before addressing this issue will be too late.

George Burgoyne

Bangor


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