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It's interesting that the US has advocated free trade whilst also being one of the biggest advocates of sanctions for countries with administrations that are no

by dpwm 9y ago

It's interesting that the US has advocated free trade whilst also being one of the biggest advocates of sanctions for countries with administrations that are not so sympathetic to its plans for them. Perhaps what the USA wants is not really free trade but "free trade": new markets to sell labour-derived goods and services to and resource suppliers with very low wages, low standards of services and low food prices in order to maintain its (slipping) financially dominant position in the world. Viewed from this angle the move makes sense and remains consistent with long-term policy goals. The stance of the current presidential administration is merely convenient. Whether it works in the long term remains to be seen. I'm a long-term critic of the US administration's trade and foreign policy and do not gladly suffer any who are unquestioningly sympathetic with it. So I have a hard time admitting this, but the consequences of the US' global trade empire falling are unimaginable to me: I see more ways it could end up in a significantly worse global situation than a marginally better one.

conanbatt 9y ago
> Perhaps what the USA wants is not really free trade but "free trade": new markets to sell labour-derived goods and services to and resource suppliers with very low wages, low standards of services and low food prices in order to maintain its (slipping) financially dominant position in the world. This is a commonly touted criticism for the US by foreigners. I grew up basically my entire life hearing this argument. (I'm argentinian). But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter. The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false. Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy. Secondly, I am convinced that the natural state of human beings is to be mercantilist and protectionist, which means open trade is always a political uphill battle. The restrictions the US has on imports has been criticized by its liberal economists. But politicians are not elected to make good policy, they are elected to make popular policy.
- bilbo0s 9y ago
  "...The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false...." Well, we do gain economic advantage when nations remain open, because the US is only open in theory. That said, this "only open in theory" thing affects us, the citizens of the US, just as much as it affects other nations. For instance, in THEORY if we in the US don't like the fact that Facebook and Twitter have the power to shape what we see and hear, we're free to form startups that offer competing social networks. As a pragmatic matter though, we really aren't. Such startups are almost guaranteed to fail in the US. On an international scale we can see this same effect in action by comparing the vibrancy of the Chinese internet startup market, against that of other, more open, nations. The vast majority of users in nations with more open markets use Facebook, Twitter, and other mostly US properties. Don't misunderstand me, the citizens of those nations can attempt to form internet startups if they wish, but the reality is that in the face of the giant, well funded, US competitors also operating in their nations, I, personally, wouldn't be sanguine about their prospects. The Chinese cleverly avoided that fate by effectively closing their market.
  - conanbatt 9y ago
    The chinese people are much poorer for not having as much foreign companies inside. They pay extra taxes for the subsidies and quality of service by having less options. Yes, its a huge loss for FAANG that they cant compete in china, but its also a loss for chinese people. It's just not a loss for chinese politicians, that can tout that thanks to them they created massive companies. You can run indefinitely on a bad platform while it gives your reasonable returns. We'll see what happens when china gets its own big capitalist crisis.
- dpwm 9y ago
  > But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter. It's quite ironic that this is the US we're talking about and that the US gained so much from protectionism. Abraham Lincoln remarked, “Give us a protective tariff and we will have the greatest nation on earth.” The US was born, after its independence, in protectionism. Through protectionism, the US was able to establish a very impressive manufacturing base in almost every sector of the economy. The US can drop all tariffs on imports to zero if it wants. Have you considered why it doesn't? If free imports really benefited the US in the way you're claiming they do, why would the US so aggressively seek trade deals with other nations? The only reason to engage in trade deals is to be able to gain regulatory influence of other countries and set mutual tariffs. It is in the US interest to make these tariffs lower for things they are net exporters of and higher for things they are net importers of (because if you're manufacturing, the raw materials generally cost less than the cost of the imported raw materials and so a larger tariff on a smaller value is better than a larger tariff on the larger value) Huge multilateral trade deals, the kind the US has been pushing, rely on the fact that they are the biggest single party and that the other signatories have a diversity of exports and imports. This is what makes Trump's bilateral approach slightly amusing: a bilateral trade deal with America First stamped on it seems like it would be a harder sell than the multilateral trade deal negotiated by the US as the largest single entity. It makes it easier to sell to the people in those countries that their politicians have signed away their power to choose a government that has the power to introduce nice things like an efficient (i.e. socialized) healthcare system . Because the trade agreement will explicitly forbid this in order to open up the healthcare market to all the signatories. > The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false. Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy. That's a poor analogy and as hard as I try I really can't see the mapping. In this analogy the businessmen are countries. The workers are what, the citizens? The factories? That makes no sense. Each party wants their factories to make money, of course. Are the wages taxes? Because the state taxes people. Reflecting the analogy back, is the US saying "cut taxes, cut the services for workers" whilst hypocritically turning into a social democracy? But I like the businessmen analogy. We can say that one represents an entirely fictional Fortune 100 company (I'm sure none would behave this way) and another a tiny little manufacturer that is on the brink of going under. The Fortune 100 company uses its leverage to suggest it will give the smaller manufacturer a huge order subject to it giving it a free sample run or such of a bespoke part. The smaller manufacturer would never entertain such terms for any other customer in ordinary circumstances, but this contract would save it. So it bites, takes a hit and gets accelerated under. Then the Fortune 100 company buys it at a knock-down price when it's no longer a going concern. The US wants imports, but not of things that directly compete with US manufacturing. Things have gone a little wrong, because self-interest has led to the moving of production to the plundered world and has led to the perception amongst some people that the main thing the US has been exporting is jobs.
macspoofing 9y ago
United States has largely been responsible for building the current world order post-WW2, based on democracy,and global trade. It's not easy being at the top.

by dpwm 9y ago

conanbatt 9y ago

> Perhaps what the USA wants is not really free trade but "free trade": new markets to sell labour-derived goods and services to and resource suppliers with very low wages, low standards of services and low food prices in order to maintain its (slipping) financially dominant position in the world. This is a commonly touted criticism for the US by foreigners. I grew up basically my entire life hearing this argument. (I'm argentinian). But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter. The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false. Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy. Secondly, I am convinced that the natural state of human beings is to be mercantilist and protectionist, which means open trade is always a political uphill battle. The restrictions the US has on imports has been criticized by its liberal economists. But politicians are not elected to make good policy, they are elected to make popular policy.

bilbo0s 9y ago
"...The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false...." Well, we do gain economic advantage when nations remain open, because the US is only open in theory. That said, this "only open in theory" thing affects us, the citizens of the US, just as much as it affects other nations. For instance, in THEORY if we in the US don't like the fact that Facebook and Twitter have the power to shape what we see and hear, we're free to form startups that offer competing social networks. As a pragmatic matter though, we really aren't. Such startups are almost guaranteed to fail in the US. On an international scale we can see this same effect in action by comparing the vibrancy of the Chinese internet startup market, against that of other, more open, nations. The vast majority of users in nations with more open markets use Facebook, Twitter, and other mostly US properties. Don't misunderstand me, the citizens of those nations can attempt to form internet startups if they wish, but the reality is that in the face of the giant, well funded, US competitors also operating in their nations, I, personally, wouldn't be sanguine about their prospects. The Chinese cleverly avoided that fate by effectively closing their market.
- conanbatt 9y ago
  The chinese people are much poorer for not having as much foreign companies inside. They pay extra taxes for the subsidies and quality of service by having less options. Yes, its a huge loss for FAANG that they cant compete in china, but its also a loss for chinese people. It's just not a loss for chinese politicians, that can tout that thanks to them they created massive companies. You can run indefinitely on a bad platform while it gives your reasonable returns. We'll see what happens when china gets its own big capitalist crisis.
dpwm 9y ago
> But I think it fails to grasp the political and economical reality. If the US restricts importations, it harms itself as well as it harms the would-be exporter. It's quite ironic that this is the US we're talking about and that the US gained so much from protectionism. Abraham Lincoln remarked, “Give us a protective tariff and we will have the greatest nation on earth.” The US was born, after its independence, in protectionism. Through protectionism, the US was able to establish a very impressive manufacturing base in almost every sector of the economy. The US can drop all tariffs on imports to zero if it wants. Have you considered why it doesn't? If free imports really benefited the US in the way you're claiming they do, why would the US so aggressively seek trade deals with other nations? The only reason to engage in trade deals is to be able to gain regulatory influence of other countries and set mutual tariffs. It is in the US interest to make these tariffs lower for things they are net exporters of and higher for things they are net importers of (because if you're manufacturing, the raw materials generally cost less than the cost of the imported raw materials and so a larger tariff on a smaller value is better than a larger tariff on the larger value) Huge multilateral trade deals, the kind the US has been pushing, rely on the fact that they are the biggest single party and that the other signatories have a diversity of exports and imports. This is what makes Trump's bilateral approach slightly amusing: a bilateral trade deal with America First stamped on it seems like it would be a harder sell than the multilateral trade deal negotiated by the US as the largest single entity. It makes it easier to sell to the people in those countries that their politicians have signed away their power to choose a government that has the power to introduce nice things like an efficient (i.e. socialized) healthcare system . Because the trade agreement will explicitly forbid this in order to open up the healthcare market to all the signatories. > The idea that the US gains economic advantage by telling other countries to be open and remaining closed is just false. Its like a business man telling other business men that paying good wages is the way to retain employees and then he pays below market: he harms himself with the hypocrisy. That's a poor analogy and as hard as I try I really can't see the mapping. In this analogy the businessmen are countries. The workers are what, the citizens? The factories? That makes no sense. Each party wants their factories to make money, of course. Are the wages taxes? Because the state taxes people. Reflecting the analogy back, is the US saying "cut taxes, cut the services for workers" whilst hypocritically turning into a social democracy? But I like the businessmen analogy. We can say that one represents an entirely fictional Fortune 100 company (I'm sure none would behave this way) and another a tiny little manufacturer that is on the brink of going under. The Fortune 100 company uses its leverage to suggest it will give the smaller manufacturer a huge order subject to it giving it a free sample run or such of a bespoke part. The smaller manufacturer would never entertain such terms for any other customer in ordinary circumstances, but this contract would save it. So it bites, takes a hit and gets accelerated under. Then the Fortune 100 company buys it at a knock-down price when it's no longer a going concern. The US wants imports, but not of things that directly compete with US manufacturing. Things have gone a little wrong, because self-interest has led to the moving of production to the plundered world and has led to the perception amongst some people that the main thing the US has been exporting is jobs.

macspoofing 9y ago

United States has largely been responsible for building the current world order post-WW2, based on democracy,and global trade. It's not easy being at the top.