General Agreement on Trade and Tarrifs

The General Agreement on Trade and Tariffs (GATT) is an international agreement that allows corporations to become international, transferring money and technology to any member country in the world to produce goods. This sounds good at first. If a company can import and export freely, won’t consumers benefit by being able to buy products from around the world? If products can be produced by low-wage labor and with lower taxes and tariffs, will consumers be able to buy cheaper products? Think again about Wilton, Maine. If people are unemployed or end up in lower payin

g jobs, they will not benefit from this treaty. The rest of the taxpayers will have to foot the cost of government retraining programs and unemployment benefits. According to Sir James Goldsmith, an economist, testifying before the Senate Commerce Committee,

How does all this work? GATT is an agreement that was meant to encourage international trade, over time. The agreement will change the way US companies produce and sell products and services at home and internationally. Tariff cuts are what make GATT so effective in increasing international trade. If you don’t have to pay tariffs to export your products to another country, you have just greatly expanded the market for your goods. It will be easier for United States companies to invest and build plants in foreign countries. This will be especially beneficial to companies who produce goods, because the labor is so cheap and readily available in third world countries. The unemployment and overpopulation in these third world countries is so bad that it would be almost impossible for workers unions to be formed. With the labor being so cheap, many American companies are having their products manufactured in poorer countries. This wasn’t possible before, because of tariffs, but with the new agreement, tariffs have been greatly reduced.

economic costs they bring with them (Goldsmith 4).”

In Goldsmiths notes he quotes David Ricardo, a British economist in the early nineteenth century, was one of the first to write about free trade. Ricardo believed that, “each nation should specialize in those activities in which it excels, so that it can have the greatest advantage relative to other countries.” Ricardo’s ideal situation would have been that each nation narrow its focus of industry on what they are really good at producing, and get rid of the things that they are not so good at. The nations would then export their surpluses and import products that they no longer manufacture. If international trade followed Ricardo’s model, he believed that, “efficiency and productivity would increase, and prosperity would be enhanced” (Goldsmith 1). However, James Mills, another early

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