A-Justin Canada's International trade.

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Sertorio
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Re: A-Justin Canada's International trade.

Post by Sertorio » Mon Jan 29, 2018 3:11 am

neverfail wrote:
Sun Jan 28, 2018 8:47 pm

Tariff protection meant high costs and often slack quality control standards detrimental to consumers. It was equivalent to a tax on everyone to prop up the fortunes of certain regional and corporate interests. Unfair to the many paying for it.
I am all in favour of international trade but I cannot ignore the fact that more competitive countries benefit a lot from such trade while less competitive countries may find it even harder to develop. You may think that freedom of trade is all that is necessary for a country to become more competitive, but that's absolutely not so. To become competitive and benefit from free trade you must invest as much as it is necessary to modernize your economy, to acquire advanced technology and state of the art equipment, and to train both workers and managers. And that takes a hell of a lot of money which less competitive countries do not possess. It would take decades before less competitive countries become sufficiently competitive to be able to benefit from free trade. That's why a certain measure of protectionism is needed for less competitive countries. And such protectionism does not have to mean crippling high costs and low quality. To make sure that it does not become so, protectionism must be limited in time. Five to ten years should be more than enough for firms to become competitive.

Please notice that countries like Japan and South Korea grew faster thanks to a significant degree of protectionism. Which was tolerated because of the strategic importance of both countries. Without such protectionism their economic "miracle" would have taken a much longer time to materialize.

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Sertorio
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Re: A-Justin Canada's International trade.

Post by Sertorio » Mon Jan 29, 2018 3:14 am

SteveFoerster wrote:
Sun Jan 28, 2018 7:47 pm
Sertorio wrote:
Sun Jan 28, 2018 5:24 am
A proper free trade agreement should allow the weaker parties to apply some temporary protectionist measures in respect of vital sectors of their economy.
So, we can add "free trade" to the list of terms the definition of which you don't know.
I'm afraid it is you who think that free trade includes the right of a strong economy to destroy a weaker one. I'm afraid my concept of "freedom" is different from yours...

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Sertorio
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Re: A-Justin Canada's International trade.

Post by Sertorio » Mon Jan 29, 2018 3:17 am

cassowary wrote:
Sun Jan 28, 2018 8:20 pm

Neverfail and Sertorio,

It is my opinion that small countries have more to gain from free trade than larger countries. That is because our own markets are small and we need the rest of the world to buy our stuff.

So Canada, like Australia, should embrace the TPP. In the case of the US and China, however, it is to their advantage to negotiate bilateral agreements. A small country with say 25 million population (like Australia and Canada) can sign an FTA with the US and gain access to a rich market of 325 million people.

The US will gain access to only 25 million people. So the US has an advantage in trade negotiations. Same for China which has stayed out of the TPP. Had the US remained in the TTP, small countries can get a better deal from the US and Japan because they piggy-backing on a larger population. Small countries get the same terms from Japan as the US does. Small countries also get the same terms from the US as Japan does if Trump had not withdrawn from the TPP.
The problem has nothing to do with size, but with competitiveness. A non-competitive economy cannot benefit from free trade because it will not be able to sell abroad the goods it would need to cover for the increased imports.

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SteveFoerster
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Re: A-Justin Canada's International trade.

Post by SteveFoerster » Mon Jan 29, 2018 7:51 am

Sertorio wrote:
Mon Jan 29, 2018 3:14 am
SteveFoerster wrote:
Sun Jan 28, 2018 7:47 pm
Sertorio wrote:
Sun Jan 28, 2018 5:24 am
A proper free trade agreement should allow the weaker parties to apply some temporary protectionist measures in respect of vital sectors of their economy.
So, we can add "free trade" to the list of terms the definition of which you don't know.
I'm afraid it is you who think that free trade includes the right of a strong economy to destroy a weaker one. I'm afraid my concept of "freedom" is different from yours...
You can have all the misconceptions you want, but the term "free trade" means something specific, and protectionism is decidedly not it. Why not just say that you prefer managed trade to free trade when that's clearly the case?
Writer, technologist, educator, gadfly.
President of New World University: http://newworld.ac

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Milo
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Re: A-Justin Canada's International trade.

Post by Milo » Mon Jan 29, 2018 9:52 am

neverfail wrote:
Sun Jan 28, 2018 8:47 pm
Milo wrote:
Sun Jan 28, 2018 8:09 pm
Many globalization types say that world trade is inevitable, so we should encourage it. That sounds to me like an argument to be protectionist.
Sorry Milo, but based upon experience I beg to differ.

I am convinced that some countries are always bound to do better out of international free trade than others: but tariff protectionism is self-defeating for everyone.

I live in a country where within living memory we had a blanket regime of tariff protection for our manufacturing industries that was among the World's highest. The fact that our living standards did not descend to third world levels was, I am now convinced with then wisdom of hindsight, due the fact that we retained several very cost-effective food and raw materials export industries that earned the hard currency needed to pay for our essential imports.

In effect, these few were subsidising the others.

Tariff protection meant high costs and often slack quality control standards detrimental to consumers. It was equivalent to a tax on everyone to prop up the fortunes of certain regional and corporate interests. Unfair to the many paying for it.

Thanks of approx. two decades of dismantling the old tariff barriers and state subsidies we now have one of the World's most open economies; have enjoyed decades of growth and the global ranking of our average real incomes and living standards have soared.

The one cloud in this otherwise clear blue sky is that the number of low skilled jobs in the workplace have shrunk considerably whilst those in the professional and higher technical categories have multiplied. So now we have a stubborn pool of structural unemployment the likes of which we did not have back in the 1950's and the 1960's before the oil shock of the 1970's hit us, making continued tariff protection untenable.

There is no turning the clock back. Even if they were to restore tariff protection we would still have structural unemployment.

Milo; don't swallow the myth that tariff protection is the answer. It works about as well as a lead life jacket for a drowning man.
There's more than one way to do it. International Law provides many opportunities.

For example, the French have stopped anyone using the name "champagne", except for grapes actually from the champagne region of France, thus keeping the price up. In my view, that sort of protectionism should be pursued aggressively.

https://en.m.wikipedia.org/wiki/Champag ... _Champagne

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Re: A-Justin Canada's International trade.

Post by neverfail » Mon Jan 29, 2018 11:19 am

Sertorio wrote:
Mon Jan 29, 2018 3:11 am
neverfail wrote:
Sun Jan 28, 2018 8:47 pm

Tariff protection meant high costs and often slack quality control standards detrimental to consumers. It was equivalent to a tax on everyone to prop up the fortunes of certain regional and corporate interests. Unfair to the many paying for it.
I am all in favour of international trade but I cannot ignore the fact that more competitive countries benefit a lot from such trade while less competitive countries may find it even harder to develop. You may think that freedom of trade is all that is necessary for a country to become more competitive, but that's absolutely not so. To become competitive and benefit from free trade you must invest as much as it is necessary to modernize your economy, to acquire advanced technology and state of the art equipment, and to train both workers and managers. And that takes a hell of a lot of money which less competitive countries do not possess. It would take decades before less competitive countries become sufficiently competitive to be able to benefit from free trade. That's why a certain measure of protectionism is needed for less competitive countries. And such protectionism does not have to mean crippling high costs and low quality. To make sure that it does not become so, protectionism must be limited in time. Five to ten years should be more than enough for firms to become competitive.

Please notice that countries like Japan and South Korea grew faster thanks to a significant degree of protectionism. Which was tolerated because of the strategic importance of both countries. Without such protectionism their economic "miracle" would have taken a much longer time to materialize.
You make quite a valid point here Sertorio.

The thing that it wrong with protectionism is that it becomes political. You just cannot rely on governments to stick to the script and abolish the tariff protection after a finite period of time. Vested interests that benefit from tariff protection become addicted and form lobby groups to ensure that it continues indefinitely. That describes what went wrong here in Australia - until a newly elected government in the 1980's summoned up the political will to begin dismantling it.

Somehow or other in both Japan and South Korea they did not step into the same trap.

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Re: A-Justin Canada's International trade.

Post by neverfail » Mon Jan 29, 2018 11:21 am

Milo wrote:
Mon Jan 29, 2018 9:52 am


There's more than one way to do it. International Law provides many opportunities.

For example, the French have stopped anyone using the name "champagne", except for grapes actually from the champagne region of France, thus keeping the price up. In my view, that sort of protectionism should be pursued aggressively.

https://en.m.wikipedia.org/wiki/Champag ... _Champagne
The French could claim that they were merely protecting their "intellectual property rights".

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Milo
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Re: A-Justin Canada's International trade.

Post by Milo » Mon Jan 29, 2018 12:03 pm

neverfail wrote:
Mon Jan 29, 2018 11:21 am
Milo wrote:
Mon Jan 29, 2018 9:52 am


There's more than one way to do it. International Law provides many opportunities.

For example, the French have stopped anyone using the name "champagne", except for grapes actually from the champagne region of France, thus keeping the price up. In my view, that sort of protectionism should be pursued aggressively.

https://en.m.wikipedia.org/wiki/Champag ... _Champagne
The French could claim that they were merely protecting their "intellectual property rights".
Exactly, the best protectionism is a policy of mercantilist, plausible denial.

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Sertorio
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Re: A-Justin Canada's International trade.

Post by Sertorio » Mon Jan 29, 2018 5:05 pm

neverfail wrote:
Mon Jan 29, 2018 11:19 am
Sertorio wrote:
Mon Jan 29, 2018 3:11 am
neverfail wrote:
Sun Jan 28, 2018 8:47 pm

Tariff protection meant high costs and often slack quality control standards detrimental to consumers. It was equivalent to a tax on everyone to prop up the fortunes of certain regional and corporate interests. Unfair to the many paying for it.
I am all in favour of international trade but I cannot ignore the fact that more competitive countries benefit a lot from such trade while less competitive countries may find it even harder to develop. You may think that freedom of trade is all that is necessary for a country to become more competitive, but that's absolutely not so. To become competitive and benefit from free trade you must invest as much as it is necessary to modernize your economy, to acquire advanced technology and state of the art equipment, and to train both workers and managers. And that takes a hell of a lot of money which less competitive countries do not possess. It would take decades before less competitive countries become sufficiently competitive to be able to benefit from free trade. That's why a certain measure of protectionism is needed for less competitive countries. And such protectionism does not have to mean crippling high costs and low quality. To make sure that it does not become so, protectionism must be limited in time. Five to ten years should be more than enough for firms to become competitive.

Please notice that countries like Japan and South Korea grew faster thanks to a significant degree of protectionism. Which was tolerated because of the strategic importance of both countries. Without such protectionism their economic "miracle" would have taken a much longer time to materialize.
You make quite a valid point here Sertorio.

The thing that it wrong with protectionism is that it becomes political. You just cannot rely on governments to stick to the script and abolish the tariff protection after a finite period of time. Vested interests that benefit from tariff protection become addicted and form lobby groups to ensure that it continues indefinitely. That describes what went wrong here in Australia - until a newly elected government in the 1980's summoned up the political will to begin dismantling it.

Somehow or other in both Japan and South Korea they did not step into the same trap.
If protectionism and its limits are set down in an international trade treaty it will be easier to impose its end after the agreed five to ten years period. The trouble is that countries benefitting more from free trade are not willing to accept a limited protection for the less competitive economies. Not understanding that instead of furthering trade they may be making it more difficult to achieve. That's one of the things which is wrong with the European Union and its fundamentalist approach to free trade.

neverfail
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Re: A-Justin Canada's International trade.

Post by neverfail » Mon Jan 29, 2018 5:10 pm

Milo wrote:
Mon Jan 29, 2018 12:03 pm
neverfail wrote:
Mon Jan 29, 2018 11:21 am
Milo wrote:
Mon Jan 29, 2018 9:52 am


There's more than one way to do it. International Law provides many opportunities.

For example, the French have stopped anyone using the name "champagne", except for grapes actually from the champagne region of France, thus keeping the price up. In my view, that sort of protectionism should be pursued aggressively.

https://en.m.wikipedia.org/wiki/Champag ... _Champagne
The French could claim that they were merely protecting their "intellectual property rights".
Exactly, the best protectionism is a policy of mercantilist, plausible denial.
I will share this anecdote:

I am unclear about the exact year, but sometime around 30 to 35 years ago the French wine makers took our Australian ones to an international court and obtained a ruling forbidding our winemakers from using the names of their wine types. Not only in the case of champagne either. I distinctly recall that when I was a young man there was a popular table red called a claret. The firms that made this were now forbidden to use it on their labels.

Without meaning to the French probably did our wine industry a favour. It challenged our winemakers to stop sheltering behind the borrowed prestige of the French names and innovate new ones for marketing purposes. They usually resorted to employing the grape variety name to identify the type of wine in the bottle. So what had previously marketed as claret was/is now sold as Cabernet Sauvignon.

Our wine industry has never looked back since.

https://en.wikipedia.org/wiki/Australian_wine

P.S. I was surprised to discover that, upon reading the content of this link, such a high proportion of our wine is exported abroad.

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