5 ms·
>I know that they are rife with corporate subsidies and targeted protectionism Actually, the goal was to eliminate a lot of that. In trade, countries usually
by ckozlowski 11y ago
>I know that they are rife with corporate subsidies and targeted protectionism
Actually, the goal was to eliminate a lot of that.
In trade, countries usually have two general aims:
1. Negotiate reduction or elimination of tariffs in foreign markets so that domestic producers can expand abroad.
2. Protect their own domestic producers from foreign competition by retaining the import tariffs that keep them competitive.
So, Japan subsidizes its domestic rice farms and tarrifs rice imports, but wants to sell its cars unfettered. Brazil wants to export its oranges and other produce more, the US wishes to export more of it's beef and cattle market. (These are the ones I'm thinking of off hand.)
The thinking goes however, that nations will gain more if they can all agree to open their tariffs, and allow goods to "trade freely". This means that while there will be short term disruption and decline in some markets, that their economies will have net growth on the whole, because economics is not a zero-sum game. For the TPP, the math is somewhat easy: One or more domestic industries will face internal competition, while their export markets will now be open to a dozen new countries. If they all do this, it's a net gain. (So the thinking goes.)
The portions that people seem to take issue with mostly in our line of interest have to do with the intellectual property provisions. This is to shore up the mismatch in legal protections that exist in countries with weaker IP laws. You can more or less sum this up with pointing out that pirated software and media is sold openly in countries like China and Vietnam. The provisions pertaining to those are other countries saying "Look, we'll trade, but only if you respect our IP."
Whether or not you agree with those provisions is of course, the million dollar question, and on things like that, the fate of the TPP depends. But that's the rationale.
And yes, you're exactly right, a rising global standard of living is /exactly/ what everyone wants. It's not some evil conspiracy, it really is that. And so long as no one can game the system (too badly), that's exactly what will happen.
(More reading on that last point. Can't recommend it enough:
In Defense of Globalization - Jagdish Bhagwati
http://www.amazon.com/In-Defense-Globalization-With-Afterword/dp/0195330935 http://www.amazon.com/In-Defense-Globalization-With-Afterwor... )
- emodendroket 11y ago> And yes, you're exactly right, a rising global standard of living is /exactly/ what everyone wants. It's not some evil conspiracy, it really is that. And so long as no one can game the system (too badly), that's exactly what will happen. We can argue about whether or not that will really be the end result but I'd imagine quite a few of the participants are more concerned with their own gain than a rising global standard of living.
- ckozlowski 11y agoThe losses in globalization trend towards localized, which are easier to identify and document. The gains however, are much more widespread, and as someone pointed out earlier, the world is doing better, on the whole, in lifting people out of poverty by every measure. It's hard to believe a statistic more than it is a news report of someone losing their job. But things are improving.
- rnnr 11y agoThere is no need of a complete unilateral agreement. CountryA benefits from free trade with CountryB even if the later imposes tariffs to some products of industries they want to 'protect'. It's CountryB which will not have as an optimized economy as it could.
- bko 11y agoThis point seems to be counter-intuitive but I believe it to be true. David Ricardo had deep insights into this very idea in the 1800s. I remember his arguments as being very persuasive. https://en.wikipedia.org/wiki/David_Ricardo https://en.wikipedia.org/wiki/David_Ricardo
- ashark 11y agoRicardo assumed immobile capital. https://en.wikipedia.org/wiki/Comparative_advantage#Free_mobility_of_capital_in_a_globalized_world https://en.wikipedia.org/wiki/Comparative_advantage#Free_mob...
- iamcurious 11y agoVery interesting, can you explain further?
- rnnr 11y agoWhy would be good idea essentially imposing a tax to the citizens of your country(tariffs) for the benefit of a single subgroup? You should keep your workforce directed to the industries market proves you competitive. Everyone as a person does the same, we use our major source of income(dayjob = profession we have the best skills relative to everyone else) to trade it with the labor of others, we dont try to make everything by ourselves even if we have the technical capacity. (Comparative advantage)
- iamcurious 11y agoI see. To answer your question, it isn't about economy but politics and power. Having a more diversified economy makes you less dependent on the whims of others, albeit it can be at the cost of overall efficiency. I guess everybody does the same as well, we insist in having some understanding of other skills so that we aren't at the mercy of others.
- rodgerd 11y ago> The thinking goes however, that nations will gain more if they can all agree to open their tariffs, and allow goods to "trade freely". Which is the exact opposite of how the United States, the United Kingdom, South Korea, Singapore, and Japan all got rich in the first place, so it's hard to see the real world examples that back this up.
- pc2g4d 11y agoDe facto free trade zones such as the United States themselves (and the internal economies of most nations) are a good example of what it looks like once the transformation is complete. Doesn't prove that moving from tariffs to no tariffs will be a net benefit, but it's a good model.