A Tale of Two Treaties

cross posted at Right Michigan

During this presidential campaign, Barack Obama has made many public statements concerning the North American Free Trade Agreement (NAFTA); if key portions of the treaty are not renegotiated, says The Obama, he will bravely take his lead-free painted toys and go home.

Even if you conveniently omit that uncomfortable little slice of the discussion where Obama might have been doing some toothless political posturing with his NAFTA comments (and believe me, liberals would,) there still remains a generally consistent pattern of economic demagoguery from the Messiah that spouts a desire to protect the American worker while offhandedly forgetting about the American consumer.

This is, understandably, an easy mistake to make, having been made by both progressive and conservative protectionists alike, especially those willing to dispense with a whole boatload of basic economic truths. It is also a very easy sell to make to one of the Democrat's most monolithic and emotional special interest groups, organized labor. This is particularly true in certain rust belt states such as Michigan where union membership, though waning and smelling slightly of cabbage, still has significant political clout.

Echoing the sentiments of Barack Obama is US Rep. Bart Stupak of Michigan's 1st Congressional District. Bart was in congress when NAFTA was originally passed under the administration of one William Jefferson Clinton, though Stupak steadfastly opposed the measure and continues to yammer on about his opposition to this day. One thing that can be said about Bart, he is more than willing to not admit a mistake even when faced with ample evidence that he was wrong in the first place, territory that, I suppose, becomes easier to travel with familiarity.

While it is the strangest sort of irony that Misters Obama and Stupak have said they are willing to fight for American jobs by denouncing a measure that has helped to create them (NAFTA), it is no less ironic that these lawyers have said they are willing to fight for American jobs by supporting a treaty destined to kill them (Kyoto Protocol.) It is, in effect, the world of Bizarro Economics 101, but at least they have consistency on their side.

We all pretty much know what NAFTA is, but what is Kyoto?

The Kyoto Protocol is an agreement that came about after lengthy multi-stage negotiations of the United Nations Framework Convention on Climate Change (UNFCCC). The spoken purpose of the protocol, which was finalized in Kyoto in 1997, is to combat the global emission of six greenhouse gases through restrictions agreed to by signatory countries. The treaty came into force to its signatories on February 16, 2005.

While this is the loudly spoken purpose of the protocol, a second, usually only whispered effect of the agreement will be the means in which the framework of Kyoto will allow the United Nations to redistribute the wealth of developed and liberty loving countries to restrictive third world governments run by tin pot dictators and repressive socialists around the globe. This despite the fact that no amount of cash infusion will ever be sufficient enough to alter the failed economic policies that allowed these countries, often resource laden, to rot on the political vine to begin with.

The Kyoto Protocol categorizes countries into two different groups, developed countries (Annex 1) and under developed countries (Non Annex 1) or, as we like to call them in northern Michigan, countries that are run a lot like Detroit. One hundred and thirty seven Non Annex 1 countries have signed and ratified the agreement. Thirty six developed countries and the EU have also climbed on board. (Several other countries have agreed to participate without being signatories.)

Kyoto has as its cornerstone varying requirements of Annex 1 and Non Annex 1 signatories. While Non Annex 1 countries are simply given the obligation to monitor how much greenhouse gas they spew into the atmosphere, Annex 1 countries are forced to shoulder the enormous financial burden of assisting developing countries with pollution reduction technology projects while also reducing their emissions of specified greenhouse gases. Since governments themselves generate no wealth, all payments to undeveloped countries by Annex 1 countries will ultimately be financed by consumers in the form of more expensive domestic goods, higher heating and cooling bills, and a boatload of both nationally and internationally leveed taxes. A real comfort to many skeptics is that the program will be transparently administered by the United Nations, so there will be absolutely no risk of abuse or cronyism. Really, Kojo Annan already has his car, what additional risk could there be?

How would this treaty affect America, a country conspicuous for having signed the agreement but not having ratified it?

Saddling American industry with another layer of bureaucratically mandated costs, while competing foreign goods are produced with little or no countering regulation, will make the American goods relatively more expensive to produce. This cost increase will either have to be passed on to the consumer in the form of higher prices, or the producing company will be forced to seek lower cost production methods such as manufacturing them in Non Annex 1 countries. The factory they vacate in America will be one where production was much more environmentally friendly and safer than the typical third world factory where little concern is placed on any environmental issue, be it water, soil, a worker's blood, or carbon in the air. The net result? Fewer American jobs and more global pollution--just the sort of common sense solution this country needs! With any luck the newly abandoned factory can become a storage facility that emits zero carbon.

Stunningly, these are exactly the the points of contention that The Obama and The Stupak have dubiously aimed at NAFTA, jobs fleeing beyond our borders to factories where there is little concern for the environment or worker safety.

In another moment of twisted irony, the American worker will, as a consumer of the goods produced at the factory in which he works (as long as he can afford them that is,) be directly subsidizing third world factories to produce goods that compete with the ones he makes during the week. At least in today's America a worker can buy a product that he helped manufacture himself without having to chip in some extra coin to help his factory's foreign competitors keep production costs low. Hey, Ford employee, how do you like the idea of helping out Tata Motors and its suppliers when you buy that F-150?

If Barack Obama reaches the White House, he has pledged to support the Kyoto Protocol while hinting at a dismantling of NAFTA. If Bart Stupak is reelected, Obama can count on his buddy to help him in the House of Representatives.

If you like what NAFTA has been incorrectly accused of doing to Detroit's big three, you are going to love what the Kyoto Protocol promises to deliver to the entire United States, this with the blessing and support of Barack Obama and Bart Stupak.

In Bizarro Economics 101, this is called change.