Perú & economics, phew.
In the past few days I have received a deluge of emails regarding the Perú-US Free Trade Agreement (FTA) that may be coming up for consideration in the US congress. Now, I’m no economist, but even economists can’t seem to make up their mind whether FTAs help or hinder economies. I was in Perú when their congress signed the agreement. The fact that the main opposition to the bill came from Humala’s UPP party didn’t necessarily persuade me to dislike the agreement, nor did the near brawl that several congresspeople-to-be started during discussion on the FTA in their congress. And then there was our visit the the U.S. Embassy where one of the speakers made the reasonable point the economic advancement wasn’t easy or painless, but it helps in the long run.
Fast forward to today. After months of not really thinking about it, the Perú-US FTA may be coming to a vote in U.S. congress. American organizations that I respect (like MCC) oppose the agreement. At first I was confused. 
After all, it didn’t seem all bad when I was down there. But the more I read about NAFTA and other FTAs the more I stared to think that maybe this wasn’t such a good thing for the average Peruvian. My host dad in Caraz worked with cooperatives of local farmers who’s goal was to start exporting their products to more lucrative markets. So my initial reaction was, wow, remove some of those export barriers, they can start shipping to the US. But there’s the opposite reaction too. Other cheap foods coming into the Peruvian market putting different farmers out of business. Another point I discussed with my host dad was that it is often hard for local cooperatives to reach the US market because they often cannot provide the consistent supply and consistent qualities demanded for export. Hmmmm, so if local cooperatives can’t export, but trade is increasing guess where all that increase in profit goes. Likely to the large corporations who already have some business overseas, but who now can really rake in the dough because of lower tariffs 
Trickle down is a nice theory, but I really don’t think it’s that effective.
So, where does that leave me? Well, I think pretty soon I’m gonna send an email off to my host dad in Caraz, see what he has to say about the issue. But unless someone can really give me compelling arguments to the contrary I don’t see how I can tell my representatives to support the Perú-US FTA. And now I will end my political rant… Hopefully this gave you something good to think about. Rambling like this sure helps me think through things 
Oh, and the photo is my host dad, Freddy, and a cuy. One of several potential export to the US. Hear more about cuyes on The World.
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Yup, you can even use smileys if you want. Almost every standard MSN and AIM smiley is available. When in doubt, use the MSN text. One more thing, noses are a must [ aka :-) not :) ] and case is irrelevant.
OOoOoO i like the new winder look… good work Marcos!!
Comment by Beth — 11/30/2006 @ 3:11 pm
whoa that should have been winter look not winder look… ok…
Comment by Beth — 11/30/2006 @ 3:11 pm
Hey Marcos,
It’s interesting that you posted this little article right when my microeconomics class was discussing NAFTA and free trade in general. Here is the perspective my professor gave me. (Hopefully I get this right…)
Okay, so free trade as a whole is a good thing and should be supported. However, the terms of the agreements are what make or break the deal. Like you said, when they seem to favor those people that are already involved in international trade, then it is probably not very beneficial to the larger population. Again, with the crops from the U.S. and other big industry farming nations, the local farmers are hurt. That is to be blamed on all the subsidies U.S. farmers have from the government. So you could say subsidies are bad here in the U.S., but at the same time there is the issue of being self sufficient with major things like food and not being to reliant on other countries (i.e. national security). However, any trade that goes on between countries raises the standard of living and places a country’s productivity to a point beyond what they could produce on their own. So while individuals may suffer from job losses in the short run, everybody benefits from lower prices (except, again, those who domestically produce what is being imported from other countries, i.e. small farmers and crops).
Well, that was kind of a jumbled up rambling of a mess, but, like you, writing it out helps to clarify it for me. Maybe that helps you, maybe it doesn’t, or maybe you already knew all that, but I thought I’d give a response for once. That’s all.
Later,
Curtis
Comment by Curtis — 12/6/2006 @ 11:51 am