30-11-2003 15:00									#1
	Raise tariffs on America Get a bigger avatar today!

I don't rant much, but here goes.

Why is it when the US initiates tariffs against Japan or China, these countries respond by raising tariffs for goods sold to America?

Or in the Canadian example. The Americans currently stiff us with a 28% tariff on all softwood lumber, in order to prop up their obsolete mills and lumber industry. Why don't we start raising prices on all of our electricity, and our oil that go the US?

The Americans have taken cheap and easy Canadian power and oil, IIRC, we are the largest supplier of oil to the United States, yet you never hear about Canada's contribution down south. We are like the wife that always waits while America toys with their mistresses.

	30-11-2003 15:28									#2
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Because it wouldn't be in Canada's interest?

	30-11-2003 17:18									#3
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There should be international agreement on increasing tarriffs on the US, or alternatively, unless they reverse the protectionist situation, for international embargoes to be placed on their products.

	30-11-2003 17:32									#4
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Well we have the WTO.

Unfortunately the most powerful economy in the world needn't always obey their rules.

And BK its the first tenet of International Trade........Bodds is correct, you don't impose tariffs on American goods in response because the burden falls mainly on your citizens, just as the burden of America's burgeoning protectionism falls on theirs.

	30-11-2003 18:44									#5
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quote: Originally posted by Park Avenue Because it wouldn't be in Canada's interest?

No, because it wouldn't be in the USA's interest.

	30-11-2003 18:58									#6
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Isn't Canada supposed to be in the North American Free Trade Area?

See? It is illegal for you to raise tariffs on the US !

	30-11-2003 19:05									#7
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NAFTA is a joke. I always was in favour of Canada joining the EU.

	30-11-2003 19:17									#8
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good point Kenobi...

America is the land of hypocrisy... we claim to be for capitalism and free markets, yet subsidize inefficient and wasteful private industries. Look at the newest Medicare bill that passed. Conservative estimates put the cost at $400 billion... with over $225 billion in direct subsidies for pharmaceutical and insurance companies. It's all pork. Our government is corrupt. Corporate lobbyist pay millions to get these pork legislations through. It's sad that the effects of America's corruption are felt worldwide...

I can only hope that one day the American people wake up and realize that both parties are ****ing us.

As Hitler said, "How lucky for those in power that people don't think."

	30-11-2003 19:24									#9
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quote: Originally posted by Ben Kenobi I don't rant much, but here goes. Why is it when the US initiates tariffs against Japan or China, these countries respond by raising tariffs for goods sold to America? Or in the Canadian example. The Americans currently stiff us with a 28% tariff on all softwood lumber, in order to prop up their obsolete mills and lumber industry. Why don't we start raising prices on all of our electricity, and our oil that go the US? The Americans have taken cheap and easy Canadian power and oil, IIRC, we are the largest supplier of oil to the United States, yet you never hear about Canada's contribution down south. We are like the wife that always waits while America toys with their mistresses.

It's actually the case that a nations benefits economically by with less restrictions on trade no matter what ohter countries are doing.

	30-11-2003 19:39									#10
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quote: Originally posted by Shi Huangdi It's actually the case that a nations benefits economically by with less restrictions on trade no matter what ohter countries are doing.

Wrong.
Open Market and restricted markets can both prove efficient or inefficient policies, depending on the context. For example, South Korea (and any other developed East Asian country) can thank its development on internal markets that have been closed for decades, while other countries had theirs open.
Had South Korea been an Open Market from the beginning, it wouldn't have seen powerful industries emerging. OTOH, South America relied on closed markets for too long, and ended up with obsolete factories, even though they were quite modern when they were first built under protection. That's why most South American economies are still shaky, despite starting their development sooner than East Asia.

	30-11-2003 19:56									#11
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quote: Originally posted by Spiffor Wrong.

Actually Shi is correct.

What is more virtually all development success stories since 1960 (including South Korea) have resulted from export led growth and an increase in trade as a proportion of GDP.

	30-11-2003 20:05									#12
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Shi defended the idea of keeping one's own market open, however close the other markets were.

South Korea disproves that such is the One Best Way.

	30-11-2003 20:16									#13
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Shi is correct, because the case for free trade in the domestic country does not depend on the actions of others.

What is more South Korea is the textbook example of a poor country that prospered on the back of export led growth. This was not because formerly closed markets helped it 'create strong industries'..........it has been shown time and time again that protected industries perform very badly, and that policies promoting domestic champions are usually flawed. It was precisely when South Korea abandoned such policies that it developed quickly.

I can provide references if you'd like to learn more.

	30-11-2003 20:17									#14
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quote: Originally posted by DrSpike I can provide references if you'd like to learn more.

I'm sure curious. I thought of SK as the archetype of "educative protectionism"

	30-11-2003 20:35									#15
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Sure thing........a great entry level reference to International Trade is International Economics: Theory and policy by Obstfeld and Krugman. That's the text I use.

More specifically about Korea, loads of work has been done on the factors underlying their rapid development and the development of other Asian economies over the same period. Most pieces I have are academic papers, but I recall a great largely descriptive World Bank piece that discusses the effect of industrial policy in the 'tiger' economies that might interest you.

I'll try and dig it out Monday.

	30-11-2003 20:51									#16
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I think Canada should impose tarrifs too, but primarily for our benefit, not theirs. It helps create balancing political constituencies in the US that are being hurt in addition to the constituencies that are being helped by sheltering. But choose the tarrifs well.

Overall, the US isn't very protectionist, even though a comparatively small percentage of our economy is traded with other countries. Our trade deficit proves that point. Perhaps the US is using this opportunity to raise the cost of government subsidies in other countries in select industries, with the hope that they will be scrapped after the details are shown.

Last edited by DanS on 30-11-2003 at 20:57

	30-11-2003 21:53									#17
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quote: Originally posted by DrSpike What is more South Korea is the textbook example of a poor country that prospered on the back of export led growth.

If other countries keep their markets closed, there will be no export-led growth.

	30-11-2003 22:04									#18
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quote: Originally posted by Provost Harrison There should be international agreement on increasing tarriffs on the US, or alternatively, unless they reverse the protectionist situation, for international embargoes to be placed on their products.

A Euro is complaining about protectionism?!

Why don't you go check some of the extreme protectionist measures the EU has put in place. How high is the tarrif on foreign made autos in the EU? Geee, it looks like you still cap the total number of cars which can be imported as well. Your fat cat farmers are getting well over twice the subsidies ours are getting and you bastards flat out lied to us about removing the subsidies. The EU said that if America removed its subsidies then the EU would as well; the US killed off its subsidies for four years and then the bastard Euros increased their farm subsidies. Then when the US got tired of waiting for the EU to make good on its promise and reimposed farm subsidies at less then half it's previous level we had to listen to hypocritical Euros bellow about how "unfair" the US was.

Also look at the EU's steel regime. The government mandates that each countries' producers get a certain percentage of market share reguardless of market demand and it also puts up big road blocks to prevent foreign made steel from taking to much of the market. Compared to this the US's anti-dumping laws are child's play.

	30-11-2003 22:08									#19
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quote: Originally posted by Urban Ranger If other countries keep their markets closed, there will be no export-led growth.

Which is why rich countries have poor countries over a barrel. During the cold war the US put up with opening it's markets while protectionist powers, like Korea and Japan, kept their domestic markets closed, because the US wanted those countries to be stable. The problem is just about every country in east Asia has patterned themselves on Japan and has become an export machine which puts huge road blocks to prevent imports. Why should we continue to let these abuses continue?

It sounds like these countries need to start playing in good faith or we should start locking them out of our markets just as they lock us out of theirs.

	30-11-2003 22:12									#20
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Oerdin: What some of us are saying is that if Japan locks others out of their markets, it hurts the Japanese the most.

They end up doing absurd stuff like buying US government bonds at disadvantageous times in order to keep the Yen from going up in price versus the dollar. They end up subsidizing the American consumer.

Last edited by DanS on 30-11-2003 at 22:18

	30-11-2003 22:18									#21
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Yes, you are saying it hurts Japanese consumers but it helps Japanese producers which is why the Japanese do it.

I would like to see us impliment a preferential trading zone where powers like China, which block US goods in most of its market, get slapped with huge tarrifs and countries like singapore which have open markets get to trade with no tarrifs. Turn around is fair play and if China and all want us to drop our tarrifs then they should be forced to drop their own tarrifs as well.

	30-11-2003 22:21									#22
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quote: Yes, you are saying it hurts Japanese consumers but it helps Japanese producers which is why the Japanese do it.

It doesn't help producers in general in the long run, only specific industries in the short run. With the extra yen that the Japanese consumer would have if they paid lower prices because of imports, they would have funded new industries in Japan. It's not like there would be fewer yen available because of imports.

	30-11-2003 22:29									#23
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Oerdin:
I don't remeber the EU was in a Free Trade Area with the US, unlike Canada.
Besides, I don't think either the EU nor the US can pretend to have the moral high ground when it comes to commercial deals. We are exactly the same kind of backstabbers.

	30-11-2003 22:30									#24
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You are forgetting about the extra jobs which would be lost if imports took a large part of the market. With fewer workers getting income and corporations paying less taxes there would be fewer Yen availible because of imports.

The trade off is they end up paying more for goods so the real cost to benifet is going to depend upon how much more they pay for goods verses how many jobs are saved by the tarrifs.

	30-11-2003 22:32									#25
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quote: Originally posted by Spiffor Oerdin: I don't remeber the EU was in a Free Trade Area with the US, unlike Canada. Besides, I don't think either the EU nor the US can pretend to have the moral high ground when it comes to commercial deals. We are exactly the same kind of backstabbers.

You are of course right. I just got worked up when PH said the US was so much worse then the EU.

	30-11-2003 22:33									#26
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quote: ou are forgetting about the extra jobs which would be lost if imports took a large part of the market. With fewer workers getting income and corporations paying less taxes there would be fewer Yen availible because of imports.

That's not the way trade works and that's why Japan is (thankfully) chasing after a phantom. While jobs are lost in some industries, they are gained in other industries on a higher payscale.

	30-11-2003 22:35									#27
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quote: I don't remeber the EU was in a Free Trade Area with the US, unlike Canada.

Don't cry for Canada. Canada benefits hugely by a free trade zone with the US. Most of its population lives within 50 miles of the US border and a very large portion of the Canadian economy is US trade related.

	30-11-2003 22:42									#28
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quote: Originally posted by DanS That's not the way trade works and that's why Japan is (thankfully) chasing after a phantom. While jobs are lost in some industries, they are gained in other industries on a higher payscale.

Maybe but maybe not. It depends upon if the country has a competetive advantage in other industries or not. If they don't have a competetive advantage in any industries or if the number of disadvantages outnumbers the number of advantages then the country would be worse off then before. Of course prices would be lower so their will be a benifet there which would have to be factored in, however, there is a point where a country is so uncompetetive that free trade would cause more harm then good.

You could argue that in the long run free trade would make the country more competetive but that doesn't help the workers or corporations during the 20 years or so it would take to realign themselves. I think in that case it would be better to slowly lower the trade barriers, allowing the industries to slowly adapt, rather then just going cold turkey into free trade.

	30-11-2003 22:45									#29
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quote: Maybe but maybe not.

Definitely. Not "maybe, but maybe not". Dr Spike will fill you in on the details.

quote: You could argue that in the long run free trade would make the country more competetive but that doesn't help the workers or corporations during the 20 years or so it would take to realign themselves. I think in that case it would be better to slowly lower the trade barriers, allowing the industries to slowly adapt, rather then just going cold turkey into free trade.

That's what was done with the US steel industry. Didn't seem to help.

	30-11-2003 22:46									#30
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Yes, but I find it pretty impressive that the US can raise tariffs towards a partner in a free trade area.
The former ban of British Beef in France was a subject to countless whining on 'Poly, and I wonder why the US tariffs towards Canada should be treated any different.

Maybe something like that wouldn't happen if NAFTA countries had an harmonized tariff policy?