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#2085: Trade and Haiti: Smith Replies to Munger (fwd)

From: Merrill Smith <advocacy@bellatlantic.net>

> From: AMBER L MUNGER <AMBERLY@prodigy.net>
> The
> implications of free trade in Haiti create a further dependancy on
> manufactured goods produced outside of Haiti.  

Actually, the implications of free (or, at least, freer) trade imply
further production of manufactured goods _in_ Haiti. That is the sector
of the Haitian economy that U.S. trade restrictions are blocking.

> To fulfill subsistence needs
> Haiti has, instead of funding Haitian people to produce Haitian crops,
> invested its dollars in cheap products from the US. A perfect example of
> this is "Miami Rice" which has outcompeted many farmers in the Artibonite.

Neither buying foreign rice nor making people pay more for Haitian rice
through trade barriers is properly termed "investment." Both are
purchases of final goods, not capital assets. Perhaps by "funding
Haitian people" you mean spending money on irrigation systems,
equipment, infrastructure, education, etc., to make Haitian rice
competitive. That is investment and it may well be worthwhile. (But
you'd have to compare it with the opportunity costs of _not_ investing
the same money elsewhere to know for sure.)

> In Haiti,  labor is abundant and resources are scarce, thus, the economic
> system of free trade which places human labor as the highest value is out of
> context.

But in Haiti, this _is_ in context. Why wouldn't you want to see the
highest value placed on a country's relatively most abundant factor? The
only way to accomplish this is to remove barriers to Haitian products
that keep them out of markets in which this factor is _less_ abundant.

> Haiti needs to employ its own people to provide it with its
> subsistence needs.  

This is not true of any other country. Why should it be true of Haiti?

> Increased participation in the world market increases
> haiti's dependancy on foriegn products, displaces local workers, and is NOT

Increased Haitian participation in the world markets, were it allowed by
rich countries, e.g., by abolishing trade barriers against least
developed countries (passing CBI enhancement would be a step in that
direction), would place local workers in higher paying jobs, in the U.S.
_and_ Haiti. You may call this "interdependency," if you like, but that
doesn't make it unsustainable (nor does the use of capital letters). 

Sustainability _is_ threatened, however, by protectionism which is on
the rise again, especially in the rich countries. I'm not saying that
you are advocating this but we should all be advocating _resistance_ to

In particular, people should write to Senator Majority Leader Trent Lott
and tell him to drop the U.S. content requirements that are blocking CBI
enhancement! (Write to your own Senators too and tell them to give Lott
the message.)

Merrill Smith
Haiti Advocacy, Inc.
1309 Independence Avenue SE
Washington DC 20003-2302
(202) 544-9084
(202) 547-2952 fax