Trade for trade sake?

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In response to the pending and current international trade situations (CNOOK, POTASH, etc) I made the observation "Canadians sell off the raw natural resources only to buy them back again as processed, value-added goods... creating the economic multipler known as jobs in other countries." and called for an end to this behavior

It was recently presented by a commenter that "if the Chinese have cheaper labour let them manufacture the consumer goods so people here can focus on other goods or services. Then they can trade to the benefit of both parties. It's a pretty good deal."

That attitude might be all well and good if there were to be sufficient demand for those "other goods and services" to replace all the jobs lost to 'cheaper' Chinese manufacturing processes for those consumer goods...

But, since most of the "labor" involved in goods production is pretty ubiquitous wouldn't the same 'cheaper labor" eventually apply to those same "other goods and services" Then would this eventuality - spiralling of jobs transferring to areas of lowest labor cost - create an effective global race to the bottom of wages, and living standards, in order to maintain a minimum level of employment?

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  • Bill Kays
    Bill Kays
    January 25, 2015 - 16:00

    Excellent article. John Getson is correct. Our unemployed are not allowed to work for less than minimum wage. If I am unemployed in Toronto and can't find work at minimum wage, I might jump at the chance to earn a few dollars, so perhaps the tide has changed. Bring back some basic manufacturing. Perhaps our minimum wage needs to be abolished so that our labor force can compete with China and other places. A minimum wage should be set to zero and let the free market system take over and take off. Deregulate and repeal crippling legislations and policies. Our trade and "free trade" policies have done nothing for the poor in this country. Wait for the Secret Trans Pacific Partnership to rear its' ugly head soon and all the trappings therein.

  • i agree
    November 24, 2012 - 22:54

    The UK lost most of its primary producers (mines, manufacturing, etc) and became a net importer and an economy of goods & services providers because its currency was strong and it "made sense" financially - what a mess over there now!