The Dubya's Steel tariffs declaired illegal

The best plan I've seen is one that Gunner pointed me to a couple of weeks ago, proposed by Warren Buffet in an editorial somewhere. It involves issuing trade credits to countries that buy our products, which authorize them to sell an equal amount back to us. I had been thinking in terms of an offset system, which every country in the world that buys civilian aircraft or military hardware from the US uses on us, but Buffet's plan has an added benefit: The credits themselves could be traded on world markets, which would have the effect of erasing some of the anti-competitive price advantages that result from extremely low wages (China's, for example) that are held down artificially by government manipulation.

coincidental if

Theory, theory. The US currently is running a $460 billion trade deficit. Part of it is the result of other countries buying our Treasury bonds to pump up the value of the dollar and to keep their currencies low, to give them a trade advantage. Japan practically patented this method 30 years ago and all of the Asian Tigers, plus China, have picked up on it. You can't have free trade in such an environment. But enacting currency controls would be a cure worse than the disease.

The theory of Comparative Advantage, which is the underlying idea to our "free-trade" policies, is itself based on an assumption of perfectly balanced trade. In fact, its arithmetic was worked out originally on an assumption that trade would be all barter, or its money equivalent -- zero balances of trade.

Dumping and subsidizing are, in theory, destructive only to the country that engages in them. But the practice is quite different. They tend to be market-grabbing techniques and they've been very effective.

However, as you say, they're hard to prove and they'll always be there. The only way to short-circuit them that I've seen is something like Buffet's plan.

We don't need tariffs. We need balanced trade. And we don't have to manipulate anyone else's market. We only have to take some control of ours.

Reply to
Ed Huntress
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That's why we're the most productive and efficient producers in the world, according to the World Bank.

Unlike most of the developed world, our energy and materials markets aren't taxed to high heaven by governments that use energy taxes to fund social programs. That's the free market for you, eh? You ought to try it. Then maybe your per-capita, purchasing-poower-parity GDP (US$29,400 for 2002) might edge its way up to something like, say, Norway (US$31,800) or Ireland ($30,500).

Ed Huntress

Reply to
Ed Huntress

Haha! There are a lot of explanations for why Canada's economy is lagging these days, but one fact that's hard to avoid is that you're still working off a legacy of high tariffs from days gone by. At one point your import duties led to the creating of entire industries of "mini-plants," including car plants, 60% owned by foreigners, that duplicated plants in the US and Europe. They were highly inefficient because they were too small. Manufacturers around the world built those plants because they couldn't export to Canada without facing high tariffs. But it raised your prices on almost everything, and it depressed your growth. Canada feels these trade problems acutely because the percentage of your economy that depends on trade is much higher than that of the US.

It's being corrected. Your foreign ownership of plants is down to something under 40%, I think, and it's falling. Since NAFTA, your plants have stopped trying to be miniatures of US plants and have started specializing, taking advantage of reduced trade barriers to produce fewer things in higher volumes, with world-class efficiency. It looks good for Canada's economy overall. I wouldn't be pessimistic about where your economy is going in the long run. The trick is to live long enough to see the "long run."

Aack! Not on your life. It's too damned cold.

Well, the real United States (the original 13 states) sometimes seems to have little in common with the Territories, too. I'm aware of your divisive problem with central and eastern Canada. I don't know what to say, except that you need a real leader or two up there who can bring the country together. You have too much common interest to let the competing interests make a mess of it.

I don't know how it's split up. I do know that anything that has to do with agriculture or timber is a total mess, tradewise, throughout the world. The subsidies that Japan, the EU, and the US (not that Canada is exempt, but our subsidies have more effect) have in place are astronomical and make a complete mockery of "free" trade. But that's a legacy, too, one that's causing no end of problems for the manufactured-products end of trade.

Reply to
Ed Huntress

Which statement applies to every nation (and damned near every human) on earth, past and present. Your point is?

Mike Patterson Please remove the spamtrap to email me.

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Reply to
Mike Patterson

Sugar and some sort of candy - probably Chocolate

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Reply to
Charles Gallo

I'm tempted to go look at the Canadian newspapers (I read the Toronto Star about once a week, but not the others) to see how this is playing in Canada.

FWIW, the argument before the WTO is almost the exact opposite of the one Canada made over dairy imports from the US. Canada lost on the dairy issue; if the WTO sticks to the same reasoning, they'll probably win on the softwood issue.

I'm curious if you guys know the issue on which the case is being decided. Canada hasn't denied that they subsidize lumber production via state-determined stumpage fees (well, they *did* make that argument, but dropped it). What's at issue is a fairly arcane question of where the cost basis is supposed to be determined for judging relative economic harm.

The WTO, being a new organization, is still working out its doctrines. In a sense, this case is one in which the US and Canada are testing the WTO to make it refine its doctrines on how "harm" shall be determined. It isn't an issue of fair trade at all -- as you can see by checking the course of the decisions, Canada doesn't deny that they subsidize lumber production. It's a case of how this tangled mess of agricultural and timber subsidies will be dealt with, until, hopefully, the day that both subsidies and tariffs are removed.

That day is a long way off, based on the results of Cancun.

Ed Huntress

Reply to
Ed Huntress

what is stumpage? --Loren

Reply to
Loren Coe

Ed:

I think you will agree that a lot of the trade diputes are really powerful business interests trying to use or abuse tariffs to give themselves a market advantage. The companies, usually American, use powerful lobby groups to force the US government into beating up on so called weaker nations.

Canadians politician for what ever reason have done their constituants a great disservice by playing the weak cousin in our cross border trade negotiation and I for one think it's about time we started playing a little hard ball in those negotiations. That shouldn't make me anti American should it? Canada and the USA need each other more than most American's really know and if we don't learn to repect that fact both our countries are in a lot of trouble.

You sound like a very reasonable person so it might be a good idea for you to explain to your fellow American's just how much trade both in goods and technology crosses both our borders every day. If the border between Canada and the USA where closed tomorrow both our economies would collapse almost immediately and that's a fact.

The EU is becoming a very power economical force that will hopefully force both our countries to start working together instead of against each other.

Jimbo

Reply to
Jimbo

Some more then others, but yes.

One man said the US was not. I said it was. It is and you agreed.

Your point is?

Reply to
Paul Armstrong

It would be pretty easy to stop selling Treasury bonds to foreigners, wouldn't it? ;-)

Best regards, Spehro Pefhany

Reply to
Spehro Pefhany

To the best of my knowledge, Canada has not admitted "subsidizing" lumber production. Most timber lands in Canada are publically owned, and the trees are sold at stumpage fees set by contract. The contract process is supposed to bring in enough income to pay expenses (so stuff isn't being "sold at a loss"), and this also allows the provincial government to control things like raw log exports - it's better for the economy if the lumber is processed into products locally.

It seems that the US position is that if the logs aren't auctioned on the open market, then the companies aren't paying market prices for the logs, and this is a "subsidy". It isn't what most people would call a subsidy, but to the US lumber lobby if it's not done the US way it's wrong. The US seems to want open auction of logs, and also no restrictions on raw log exports.

Basically, there is a different system in Canada, at least supposedly managed for public benefit, but the US won't accept any other system as being equal. Canada isn't selling the logs at a loss, or giving the lumber companies direct monetary subsidies, or "dumping" (selling the lumber for less in the USA than Canadian customers pay), it just isn't charging as much as private US landowners sell their logs for. In the US view, the US way is right and Canada's way is wrong, but that's a pretty biased view.

I can't help thinking that if the shoe was on the other foot, and the US public was providing a resource to producers at less than open-market prices, the US attitude would be that this was wonderful and entirely fair, or at least allowed. For example, how much do the farmers in California's central valley pay for water? Does is pay for the dams and the network of canals that distribute it? Isn't this a much larger subsidy of farmers by the public? Doesn't this give California farmers an unfair advantage in producing and exporting food?

From this side of the border, it looks like US policies are based entirely on self-interest, not principles. Protectionism is either "good" or "bad", depending on who benefits and who loses.

In the case of lumber, it's actually in the self-interest of only a small number of people in the USA, while the general public gets to pay higher prices.

Dave

Reply to
Dave Martindale

It is a per-tree fee paid by the lumber company to the landowner - in this case the provincial government.

Dave

Reply to
Dave Martindale

I must assume you are being facetious. Who else are we going to pawn off the next trillion dollars of debt that the Dubya's tax cut is costing us? I sure can't buy many bonds with the $200 tax cut I got.

Reply to
Glenn Ashmore

On Tue, 11 Nov 2003 15:37:20 -0500, "Jimbo" brought forth from the murky depths:

And in the interim, both us and the US gov't overpay for scarce plywood since they're sending, shit, millions of sheets to rebuild Iraq right now. Oops, I meant to say "Put up US quarters in Iraq." None of this crap makes any sense whatsoever, so it's nothing new to OUR gov't.

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Reply to
Larry Jaques

On Wed, 12 Nov 2003 05:23:40 GMT, "Ed Huntress" brought forth from the murky depths:

In your dreams, Ed. The US wants more products that we don't produce than the world wants products we produce. It might happen by chance some day, but not by any plan known to man today. Balanced trade is a nice dream, though.

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Reply to
Larry Jaques

On Wed, 12 Nov 2003 07:54:23 GMT, Johnny Canuck wrote something ......and in reply I say!:

It's his job, and he's good at it! You walked into the rec.crafts.metalworking trap.

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Reply to
Old Nick

You seemed to be singling the USA out as an especially evil offender, which is a popular pastime among those who have never cracked a history book and/or turn a blind eye to the rest of the world. It isn't any worse than any other nation, in my opinion, which is NOT to say it's saintly, either.

I didn't see in your quoted text where anyone said the USA was not using energy and resources.

I did see in your quoted text where Ed Huntress said the USA isn't a sink hole for Canadian goods, which you then appeared to use as a jumping-off point for an unrelated jab at the USA's use of energy and resources.

Maybe you didn't quote the part you were actually addressing? Or I missed something else altogether? Or you were just venting a little bile and were called on it?

Mike

Mike Patterson Please remove the spamtrap to email me.

The questions isn't "are there weapons of mass destruction?", the question is "who has them now?"

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Reply to
Mike Patterson

No vent. One man said the US was not. I said it was. It is, and you agreed.

I simply disagreed with what the man said. You agreed with me. I d> You seemed to be singling the USA out as an especially evil offender,

Reply to
Paul Armstrong

Stumpage is actually a fee charged to the logging company/mill, based on the volume of wood in the tree. Most logging takes place on crown land.

Steve R.

Reply to
Udie

In other words, you can sell it, but you can't buy it? Why is that? It isn't because you can't afford it -- you made the money from exporting.

Actually, not. Of the $214 billion you exported to the US last year, only $23 billion was raw materials. $12 billion was ag products. Another $30 billion was fuels (mostly oil). But $133 billion was manufactured products.

If you want to pick apart the details, or if you want to see what your *net* exports were, you'll see some surprising things. Here is the rough breakdown:

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Ed Huntress

Reply to
Ed Huntress

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