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  • Free Trade Fact of the Day

    Writing in the Wall Street Journal, Cato Institute’s Daniel Ikenson examines how nations can still increase free trade despite yesterday’s collapse of the Doha Round WTO talks:

    As Doha negotiations sputtered for seven years, the WTO reports that annual global trade flows have increased 70%, to $14 trillion. UNCTAD reports that annual foreign direct investment flows are up 25%, to $1.5 trillion. And the IMF notes that the global economy has expanded by 30%, to $54.4 trillion. These positive trends should continue if governments unilaterally ramp up their own “trade facilitation” efforts. Trade facilitation is about streamlining the administrative and physical procedures involved in actually moving goods across borders. … While reduced tariffs are important, they will not improve trade flows if bureaucratic customs procedures and shoddy logistics and communications systems are still in place.

    The World Bank’s most recent “Doing Business” survey offers the anecdote of a Yemeni fish exporter, Tarik, whose fortunes are limited by the persistence of bureaucratic export procedures. Tarik can sell fresh tuna to Germany for $5.20 per kilo or frozen tuna to Pakistan for $1.10 per kilo. But since it takes on average 33 days to get official clearance to export from Yemen, he sells only 300 fresh tons to Germany and 1,700 frozen tons to Pakistan, at an opportunity cost of about $7 million per year.

    Posted in International [slideshow_deploy]

    10 Responses to Free Trade Fact of the Day

    1. Darvin Dowdy, Houst says:

      For some, the reduction of barriers to facilitate free trade means doing away with sovereign borders. And most of these same believe that the concept of sovereign borders is antiquated, obsolete, passe'.

      There is nothing wrong, however, w/the concept of trade facilitation. But certain steps in the process can not be skip'd. Matters of national sovereignty can't be bypassed or overlooked. This is what protects our birthright as citizens of a nation. That is so much more important than short term monetary gain. DD

    2. Carol says:

      This is one of those things that Congress is trying to sneak in, without the general public knowing til its too late. Truth about it is, it will put thousands of small businesses out on the street. This country was built on small business and they want to take our freedom away to even do that.

      If Mr. Rangel had to get out and work like the rest of us little people these things wouldn't be happening. He should have to walk every day in our footsteps, without the aid of lobbyists.

      This is a sorry state of affairs when they they so blatantly want to take away the rights of small businesses all across America

    3. Lee McMillan Mesa, says:

      We that work in the cottage industry will be destroyed if the 2008 FDA Globalization Act is passed. It will only benefit the large corporations and not consumers who will be held hostage to the big corps for their needs, either that or there will be a new black market for, in my case, basic soap, created by those not wanting to use what the big boys want us to. If this act is passed we will be driven out of business, as will our suppliers, of whom many work out of their home and go to great lengths to provide the best quality and safe materials for us to use in our products. There will be so many driven out of business, at a great loss, there will many dumped on the unemployment line, welfare rolls. Instead of supporting those who are working to stay out of the system, stay at home to care for their family and still bring in an income they are shooting us down. We pay taxes to our state, county, city as well as income taxes-that will be lost to these agencies.

      Regulations are already on the books that, as a whole, we follow, we want to produce the best, safest product for consumers, we research, test, use then read and research more before we present our products to consumers. If only the big boys did the same.

      We of the cottage industries will be forced to close if this goes through as it stands right now. This bill cannot be allowed to pass, or we will all end up closing our doors.

      It seems that the politicians have forgotten that the small, cottage industry is the backbone of our country.

    4. Dinah Russell, Orlando, FL says:

      A result of the so called Free Trade Act is sneaking it’s way through Congress right now. It’s called the 2008 FDA Globalization Act. The results of this Act will force thousands of Cottage Industries in this country out of business. Small businesses that pay taxes to this country and are run mostly by women, the majority of which are stay at home moms.

      These Cottage businesses produce handcrafted soap and body products and in the decades they have been producing their wares, there have been approximately 70 complaints. The complaints are all minor. They referred to a product causing itching or redness. The outcome of the investigations usually proved that the complainer was allergic to an ingredient in the product and either didn’t know that or didn’t read the ingredient label. No deaths or serious injuries were ever caused by a product from one of these cottage industries. These manufacturers use the products in their homes, so they do their research and are very careful about sanitation.

      Now FDA wants a $2,000 fee from these small businesses to stay in business. Some states wanting to increase their budgets are already adopting the rules and excessive fees the FDA wants enforce laws that are already on the books. The catch is that if this Act passes it will lead to the FDA being allowed to classify herbs as “Legend” or “Historical” Drugs. Thus they can tag on an additional $10,000 fee to the small business. Most don’t even earn enough profit to pay the $2,000 the FDA wants, never mind the added state fees and the FDA drug fee.

      Any product with an herb in it, the FDA will then have the authority to label it a Drug.

      Large Cosmetic Companies can afford these outrageous fees, but the small cottage business cannot, which is exactly what the big companies want. They are starting to lose too much business to these tiny handcrafted businesses, and they want their profits back.

      Congress is trying to slip this slimmy Act through while everyone is watching Obama dance with the media and no one is paying attention.

      It’s wrong. This Act duplicates laws already on the books, but adds the fee zinger that will eliminate the small soap or cosmetic maker for the large companies that support FDA.

      Free Trade is NOT free when it puts you or your neighbor out of work!

      We need to start watching for the additional “Acts” and regulations that Congress tries to sneak through under the pretense of promoting “Free Trade.” The Cosmetic and Drug Companies have two of the riches lobbying groups in the country and they are supporting and pushing for the “2008 FDA Globalization Act.” We as citizens need to stop it!

      DR

    5. Kim Godlewski, Dalla says:

      I also own one of these small "cottage" businesses that make and sell handcrafted bath and body products. I agree completely with all that has been said about it so far by my collegues in this industry, like Dinah Russell above. I only make about $2000-3000 in a year becuase I'm still a very small business and have scaled it to fit my lifestyle and the fact that I'm a stay at home mom. I spend more time researching what the ingredients i'm going to use than anything else in the process of making the products. I can not afford any of the fees that are proposed and WILL go out of business. This saddens me because I've been cultivating my business for four years as my family grew and I had more time. I've spent all that time slowly adding on products I felt were well researched and formulated whether I make them from scratch or use a starter base I purchase from a reputable vendor. I take no chances in the quality. I've also built up a clientelle that requests I "never stopping making" so i'll feel very sad to let them know the government forced me to and only the "big guys" would supply their needs from then forth. I hope someone will help us and sign our petition against this act as it's written now as well as rally in other ways to prove to the FDA it's not the right solution. Thank you.

    6. Shirly Pardee, Porta says:

      I too own one of these small “cottage” businesses that make handcrafted bath and body products. I have been making my products for almost 6 years now and finally got to the point that I felt I could offer them to the public. I and my family members and friends have tested each one of my products for 3-6 months minimum before I say “ok” this one is good. If the Globalization Act of 2008 passes, I will, essentially, be put out of business before I really even start. I do not make enough profit to pay the $2000 fee that would enable me to sell and the other fees if I use herbs in my products, which I do will be impossible to afford. The fees that are proposed will put me out of business. Like some others, I only make a small amount per year because I am still a very small company. I do not necessarily want to be a “big company” but I would like to be able to make a good income one day with my products. This horrendous Act would end that dream for me. Our nation was built on small businesses and our government and the big companies want to take that away from us. If this passes, everyone in our country will be forced to use detergents that they call soap on our skin and clothing. They will create a monopoly on the market and the people of our great nation will no longer have any choices whatsoever in the products we use. I have built a small clientele that will not use any soap and lotion but what they buy from me and do not WANT to go back to using what the big companies make anymore. This Act is WRONG for our country and WRONG for our people! Americans are blessed with the right of freedom of choice; this Act would take that away from us by not allowing us to CHOOSE what we put on our skin. What makes our government think that they have the right to take away one of our freedoms? There are already laws in place to govern the production of cosmetics. We in the small “cottage” businesses as a whole do everything possible to produce safe products to sell. We study, research and study and research even more before we put something out there to sell to the public. We study and learn how to label properly so that we stay within the already established guidelines set forth by the FDA. I urge all Americans to sign our petition against this act as it is written and write, call and email their state representatives and tell them that this Act as it is written now is WRONG and that it needs to be stopped now. We do not want our freedoms taken away from us and that is what is happening.

    7. John Anderson/Nw Flo says:

      After reading 'all the above' it is becoming more obvious to me, a meager history major, that congress neither fears nor respects the American people!

      What we see happening is equal to what King George was applying to the colonists. What would President George DO? General Washington would preserve the rights and ambitions of the American People and change the course of this discourse.

      I dont know how, do I do know what, I what government to work for the people not to direct the people. How do you get government out of our lives?

      The answer will not come from our election process, it will not come from the people that get $70 Million to campaign for a senate seat in California that pays less that $200K a year! that in itself should be a special interest item to the government! But they all are guilty.

      People we must come together to right this travisty before it too late.

    8. Jennifer Mauger - Sa says:

      I decided to start my own bath & body business, only to discover that the 2008 FDA Globalization Act may put a stop to my dream before it gets started. I have spent months and months researching the products I want to make – using ingredients for the most part that are produced in the U.S. and bought from U.S. companies. Most of the suppliers are smaller and would also be hurt, if not put out of business, by the 2008 FDA Globalization Act.

      As a business owner I would carry my insurance, label my products so that buyers and potential buyers would be aware of the ingredients in case of allergies, and continue to research and perfect my goods, but because I don't have thousands upon thousands of dollars to pay the fees the FDA would require I might as well not get started.

      And heaven forbid if I wanted to make a bar of soap that is good for the skin, good for the environment, contains no chemicals (unlike most commercially produced so called soaps)and has lavender in it. If the government (and the drug manufacturer's) have their way lavender and many more natural growing herbs would be considered a drug. Tell me what the reasoning is behind this, other than the fact that before we had drugs these commonly grown plants and flowers were used to treat ailments, speed healing of cuts, etc. So because the drug companies are charging excessive amounts for their treatments and folks that are concerned about putting more chemicals in their bodies to treat themselves have gone back to nature, now the drug companies want a piece of that pie too!

      This country is supposed to be about freedoms. Facts and figures show that the large corporations have more problems with their products, knowingly put chemicals in them, and in some cases put ingredients in that are known to cause cancer. The handmade soap industry is about using ingredients that are more natural to the skin and body, less harmful to the environment. Who will support all of these people when they have to shut down their businesses because they can't afford the fees, or because the ingredients they want to use, that can be grown in any yard, that they are now considered drugs and additional fees and certifications are needed.

      Where is the logic in this proposal? Who benefits? The large corporations for sure. Who suffers? The small businesses, the Mom & Pop shops, the businesses that are family owned and operated, the stay at home Moms that can't work outside of the home, the consumer that has skin issues that can't use the products with the chemicals in them, the suppliers that are there for all of these small businesses.

      State and local governments will lose out on fees as well with the small businesses having to shut down. Insurance companies will lose revenue. No more business license fees, no more state sales tax fees, no more business insurance needed for those companies that shut down. And of course if the business shuts down, don't need that store front anymore, so there will be more available store fronts to rent/lease. Not to mention the local farms markets that will suffer, because it's not just the soap makers that will be affected – herbs that are grown for sale at farmer's markets will be drugs, so no more selling to the public.

      Has anyone thought of just how many businesses this will affect? It's not just the business owner, it's the supplier's of the oils, the fragrances, the packaging, the insurance brokers, the men and women that work out of their small workshops making and selling the molds we use, the small farm that grows those beautiful flowers that look so good in the bar of soap. How many businesses will this cause to go under? All because the big corporations are pushing for legislation that puts the small business under? And why are those so afraid of the small business? Surely it isn't really because they want to insure the product is "safer". Numbers show that isn't a problem. They want that bit of business back that was taken away from them. But they need to ask why the have lost this business to begin with – because they don't produce the same product as the soap handcrafter – the consumer wants that bar of homemade soap that feels better on their skin. The United States is about freedoms, and free enterprise. It shouldn't be about the big corporations being able to buy legislation to put the small

    9. Melanie, Bradford,Il says:

      The FDA Globalization Act 2008, is being pushed as needed to "protect the public", while in truth, it will take away the freedoms of consumer's choices and force hundreds of thousands of small businesses to close due to over regulations and fees.

      As a consumer, I need protection from cloned meats in the market, GMO foods in the food chain, prescription drugs, and NOT being forced to immunize my children.

      As a business owner, I DO NOT need to be forced to pay more fees, and play in a playing field that is totally uneven.

    10. Dianne Jackson Ms says:

      We are turning into a communist country. Sad but true.

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