How will American Free Trade affect the Americas and Engineering? 4

[GolfMeeting]

How will American Free Trade affect the Americas and Engineering?

What will it do for us engineers?

I have seen where workers from Canada are in Venezuala this week protesting Americas Free Trade Agreement proposal. I don't know anything about it either way, but I am sure it will affect us all.

 

[Jabberwocky]

Theoretically, a Free Market allows all prices and wages to equalize based upon what the market can stand. In practice there are certain "frictional" forces which reduce the efficiency of such a plan.

Really though, if you start to equalize everything, then those with more are seen to suffer while those with less are seen to profit.

Where do you want to draw your control boundary?

 

[Beggar]

The more that barriers (political, transport, information, financial) are removed, the more leveling there will be. It's fundamental economics.

The result: The engineer in China that we currently employ for about $800 per month will see his salary and standard of living rise dramatically (same for other 3rd world engineers). Those of us in the US who are earning 7-10 times more than are they will see ours drop dramatically.

Sure, not everybody; not all at once; not in every industry. But on average, it's unavoidable.



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[Jabberwocky]

Jinx Beggar, you owe me a Coke.

(6 minutes counts as Jinx-time on a forum, right?)

 

[GolfMeeting]

Wouldn't those that control the major companies be the ones with the most to gain?

 

[GregLocock]

Probably. Were you under the impression that USAn politics tended to favour people rather than companies? Who pays the bills?

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[Beggar]

Wouldn't those that control the major companies be the ones with the most to gain?

Of course. The majority shareholders of multinational corporations will benefit.

It will be their representatives (CEOs and Boards of Directors) that will be primarily responsible for such leveling and their companies' profits that are the primary beneficiaries.

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Bring back the HP-15

http://www.hp15c.org

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[RDK]

Free trade will equalize resource usage and standards of living.

It will put the weapon engineers out of business.




Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[arunmrao]

Weapon industry will always ensure that there is a political instability. That is where they thrive. If you closely look at the defence spend and also evaluate the cost of any armoury sold, as an engineer you will be shocked. The margins or price tags are just obscene.

 

[Beggar]

...margins are...obscene.

$500 hammer anyone?
$1500 toilet seat anyonce?

--------------------
Bring back the HP-15

http://www.hp15c.org

--------------------

 

[DaveVikingPE]

"The engineer in China that we currently employ for about $800 per month will see his salary and standard of living rise dramatically (same for other 3rd world engineers). Those of us in the US who are earning 7-10 times more than are they will see ours drop dramatically."

1. Why do you pay the Chinese engineer so little compared with your American engineer? And $96k a year is A LOT of money for your higher-end rank and file engineer to make; it's not like we're bankers or something.

"How will American Free Trade affect the Americas and Engineering?"

2. It will raise the standard of living for people everywhere. More markets mean more choices means more freedom - including the freedom to live beneath your means instead of on the edge. As far as we engineers are concerned, who knows? If you're working for a multi-national corporation, you still may be sent offshore.

 

[LCruiser]

It will raise the standard of living for people everywhere *except* in the developed world. Figure out the average - we've a long way to drop.

 

[DaveVikingPE]

How exactly will "mine" drop? All of a sudden will my trash not get picked up? Will all of a sudden the modern communications infrastructure fall out? Will I and my American engineer ilk be eating gruel and boiled grass?

 

[LCruiser]

Why should they pay a structural engineer in the US when they can pay an equally qualified one in a developing country one quarter the salary for the same work? Your company may not subscribe to that policy, but then they will soon be losing business to the companies actually getting the work.

 

[DaveVikingPE]

So... that means what to me? Owner X is going to pay engineer Y, who lives in China, to inspect his building when he could hire me, who live across the street and can actually see the building?

Plus Owner X needs to learn one of the right Chinese languages, will have a lot of difficulty making meetings work due to the time differences, etc.

Then again, maybe I could form a company... Aha! That's it! It'll be me as the principal, with a bunch of Y-Americans who will serve as contract-lawyer translators. We'll get all the stateside work and outsource it to lower-paid Y-nationals in Y-land.

I will make the site visits. I will write the scopes of work. I will negotiate the contracts and schedules. The actual technical work (like, uh, calculations or drafting) will be done in Y by Y's.

So the future of American engineers is that the best we can do is become disbursing agents (or "project managers"). That or move to Y-land, live like a king (because I have a savings), and do technical work.

Well, we shall see...

 

[CarolinaPE]

Dave makes some good points. I have worked in several areas of mechanical engineering and see some areas where the work could be sent overseas/outsourced and others where it does not make much sense. For instance, my first job as a forensic engineer would be tough to outsource. What are they going to do, fly an engineer from Y (to use Dave's country of reference) to testify in a US court (while speaking clear english to a jury) as to the cause of an accident? Much less gather the data from the accident scene and document the vehicles (in the US). My second job was a product design engineer. In my opinion, this job could be sent overseas with less difficulty (and is why I left the field). While working for this company some work was sent to India with mixed results, it was not the "panacea" everyone made it out to be (but it was still being used at the time I left the company). My current position as a building systems engineer would also be tougher to send overseas. What are they going to do, have a "Y" engineer sent overseas to look above ceilings of existing buildings for routing ductwork? Who is going to respond to requests for information or communicate with the (US) contractor about questions during site visits? Not to mention circumstances like needing that information ASAP, having to call the local fire marshall or building official, and I only have to drive across town to the construction site to give my direction to the contractor. Some of the cad work and calculations could be sent overseas but that work has to be done under responsible charge by the PE. If an error is made the PE will have to own up to it. Does the PE then expect some retribution from the overseas firm they outsourced the work to? That gets pretty dicey. Our work is pretty heavy in renovation so new building designs may not have this barrier. Back to the original question though. How will the free trade affect Americas and engineering. I think some areas will be affecting in mechanical and I believe and this may put pressure on other areas that are not even related due to more engineers vying for less available positions.

 

[LCruiser]

There's a dichotomy about designers inspecting their own work. It's being held more and more as a conflict of interest, and contractors will put contingencies on their bids as well. When it comes to court, if you're inspecting your design you're at a disadvantage. Nonetheless, there is beyond doubt an advantage to local firms doing the inspection.

Plus, there's nothing to say the Engineer from country "Y" can't be sent over here on whatever the equivalent - or rather replacement - of per diem is.

 

[CarolinaPE]

Cruiser, since we are not in the same business I am not sure where "per diem" fits into our business. Never heard it mentioned. My point was that construction (particularly renovation) is more "dynamic" than product design. While costs of sending an engineer over here to answer some questions that come up during construction may save a few dollars (and I am not even sure of that), I still do not see how this makes much sense. Particularly when questions come up unexpectedly and need immediate answers due to a tight schedule. I see some of your posts above that indicate outsourcing is as easy as 1-2-3. My experience has shown that it can be done but not that straightforward.

 

[moltenmetal]

We already have free trade of both goods AND services between Canada and the United States, and by and large it's working great. Lots of American engineering firms do business in Canada and vice versa. Lots of firms have offices in both countries to better serve the local markets. But that's free trade amongst countries with similar socioeconomic conditions. Free trade between the US and China would be an entirely different matter!

The trouble with free trade with the United States is that although the US is one of the most ethical trading nations in the world, it's also a nation with an enormously powerful business lobby system which can interfere with the political process to the point where the US won't live up to its international agreements. Getting the US to actually accept a clear LOSS in the free trade process is rather difficult, as Canada has discovered in regard to softwood lumber. The US continues to charge an illegal duty against Canadian softwood lumber despite numerous rulings against this tarrif from both NAFTA and WTO. US consumers of softwood lumber continue to suffer, and tens of thousands of Canadian jobs are lost, mills shut down etc. Any free trade agreement without a binding dispute resolution mechanism is basically worthless, and that's what we've got- and it's all the Americans will EVER agree to.

The Americans are also fond of capitalizing on health or safety scares to use for trade protectionism (perhaps they're learning from Japan where this behaviour is rampant). Canada's beef industry and its potato industry have both suffered from this politically-motivated lobby activity.

All those things said, Canada maintains a huge current accounts surplus with the US, and both countries continue to benefit enormously from the elimination of tarrif barriers.

 

[RDK]

The US is one of the most ethical trading nations in the world?????????


An ethical nation would have accepted the loss in the tribunals and paid the penalty and reduced the tariffs to comply with NAFTA, an agreement that the US freely and voluntarily entered into.



Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com