Purpose and value of modern trade agreements

[Tribble]

[quote="Ralin"][/quote] [Quote="K.A. Pital"][quote]

Carried over from the Hillary 2020 thread, which you can read here: http://bbs.stardestroyer.net/viewtopic. ... 7&start=50

My views, in a nutshell:

Modern trade agreements are purposely designed as much as possible to:

Lower wages to the lowest common denominator
Lower labour rights to the lowest common denominator
Lower environmental standards to the lowest common denominator
Increase the "wealth gap" between rich and poor
Remove the ability of the public to influence corporate practices, even when those practices are clearly harmful
Remove the ability of corporations to be subject to the rules of law and government oversight
Give corporations the ability to sue governments for anything where there is a potential future loss in profits in a secret tribunal composed of members who are not accountable to anyone.

Basically, the goal is to maximise corporate profits at the expense of everything else, even if by doing so significant harm is caused and even in cases where corporations already make large profits.

Ralin seems to disagree with my assessment*, while K. A. Pital seems to agree.

Let the debate continue!

* Note I am in favour of trade agreements where all of the countries involved are of roughly equal GDP Per Capita, have similar labour / environmental protections, rule of law etc. Minus the ISDS provisions of course.

EDIT: I'm not entirely sure if Ralin disagrees with my assessment or agrees with it and thinks it is a good thing overall.

[Danny Bhoy]

Singapore is probably the most prolific signatory of bilateral and regional FTAs in the world. Yet I seriously doubt that they would lower environmental standards and wages to the lowest common denominator when you consider that many of their signatory partners are either emerging markets or developing countries. Given how S'pore is an expensive place to live, making a bit of effort as a result to reduce income disparity, suffers from haze pollution from neighbouring countries and has a garden city fetish, it's seriously doubtful if they would accept an FTA covering many of the points you mentioned.

[Tribble]

Singapore is probably the most prolific signatory of bilateral and regional FTAs in the world. Yet I seriously doubt that they would lower environmental standards and wages to the lowest common denominator when you consider that many of their signatory partners are either emerging markets or developing countries. Given how S'pore is an expensive place to live, making a bit of effort as a result to reduce income disparity, suffers from haze pollution from neighbouring countries and has a garden city fetish, it's seriously doubtful if they would accept an FTA covering many of the points you mentioned.

We'll have to see, IIRC Singapore recently signed off on an ISDS deal with the EU which my final three points more or less cover. Depending on the degree the ISDS is implemented it could cover all the other points as well.

The CETA deal between Canada is a step in the right direction as at least the ISDS is in the form of a transparent, independent court system (though it still falls far short as its only purpose is to protect corporate profits).

[His Divine Shadow]

The CETA deal should torn up and I am just waiting for that day to come. No ISDS, ever.

[mr friendly guy]

Tribble, I agree with you on the ISDS provisions and I have said so in a previous thread. However I am interested in what you think about the trade benefiting countries with a lower gdp/ capita than a developed nation. Lets say a country with a low to middle income (as per World Bank definitions). *

Do you think it benefits those countries even if the aim may have been to benefit corporations in the richer countries?

* as per world bank definitions on google - For the current 2016 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,045 or less in 2014; middle-income economies are those with a GNI per capita of more than $1,045 but less than $12,736; high-income economies are those with a GNI per capita of $12,736 or more. Lower-middle-income and upper-middle-income economies are separated at a GNI per capita of $4,125.

[Tribble]

Tribble, I agree with you on the ISDS provisions and I have said so in a previous thread. However I am interested in what you think about the trade benefiting countries with a lower gdp/ capita than a developed nation. Lets say a country with a low to middle income (as per World Bank definitions). *

Do you think it benefits those countries even if the aim may have been to benefit corporations in the richer countries?

* as per world bank definitions on google - For the current 2016 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,045 or less in 2014; middle-income economies are those with a GNI per capita of more than $1,045 but less than $12,736; high-income economies are those with a GNI per capita of $12,736 or more. Lower-middle-income and upper-middle-income economies are separated at a GNI per capita of $4,125.

First, I would like to point out that I'm more concerned about the people in the country, more than the country itself. All well and good if GDP per capita increases... but that doesn't mean all that much if the increase was due to a massive increase in working hours, no labour rights, poor working conditions, having traditional industries destroyed and replaced by massive corporations, living expenses increasing so that wage increases are essentially meaningless, having whatever local sovereignty / public influence completely stripped by corporate interests, corporations essentially owning most of the land, resources and means of production which makes it impossible for locals to compete, policies being made which are deliberately designed to drive out smaller businesses etc. That's why I've believe GDP per Capita is only one way to look at things, and its not necessarily the most important one.

Can free trade agreements be setup in such a way that the people in poorer nations benefit overall? In theory yes, provided the agreements are deliberately designed in such a way so that there is much more to it than just ensuring maximum corporate profits at the expense of everything else. And making sure provisions designed to improve the quality of life are strictly enforced - no point in having rights included in a trade agreement if everyone can simply ignore them without any threat of reprisal.

Given what we've seen so far though, I'm not at all convinced that the overall quality of life has really improved in countries which had the misfortune of signing up to a major trade agreement with a country much more powerful / with corporations much more powerful than they are ... IMO our current trade agreements are for the most part exploitation, pure and simple. And the only ones really benefitting on either side are usually those who are wealthy to begin with.

[K. A. Pital]

The fact that having to compete without the government coddling workers in that field will apparently kill their jobs?

Try competing with cheap labour yourself.

The parts that aren’t profitable, certainly.

Blah blah, social-darwinist crap.

Any time a country signs a treaty they accept restrictions on their ability to pass laws and the like.

No, not every time, and inside the nation the national law still rules supreme.

Who the fuck cares if voters don’t like foreign companies doing business in their area? You don’t like it? Work for someone else.

Yes, I don't like it. Moreover, I don't like you and your kind, and I take great pleasure in the fact you have been humiliated by the Orange Monster. In fact, the humiliation of such social-darwinist bastards like you is the only good thing to come out of it.

I hope I will see your free-trader tears flowing like a river, so that I could play the tiniest violin.

And this is exactly why intellectual property rights have to be upheld. Otherwise those companies would have been cheated out the profits they were entitled to by being forced to sell their intellectual property for well below what the market is apparently willing to pay.

In most civilized countries (ignorind the one led by an Orange Monster) the ability of companies to profit from drug patents is severely restricted. There are fixed rules on when generics can be introduced, there are fixed rules that no profit shall be made off basic universal insurance packages for working citizens. And know what? It works.

Haven’t had any need to. But I have gone through the Chinese work visa process and by all accounts the US version is a hell of a lot worse.

Cry me a river. I've been in the US, and I've been in China. Neither process was excruciating or hellish - and I'm basically a Third World citizen applying for these papers. So now what? You apply for the visa? You accept the rules of the nation that is issuing it. If it chooses to deny you entry, this is (however awful it might sound) its sovereign right. I know it sounds strange to you, but such is life. I'd rather accept this than the rule of corporations. Why do I know it? Because the corporations would, for example, gladly work with much cheaper wages. But they cannot (not when hiring foreign specialists, evidently) due to legal requirements in where I live. So, no unfettered access to the labour market actually improves my conditions. Corporations would also be glad to have people work unpaid overtime and over 10 hours, but this, again, is strictly forbidden. Corporations would love to deny vacation as they please, but this is also forbidden by law. Following the national laws is very important, and it improves things for all workers.

Conditions that they’re willing to accept, evidently. But that’s fine, being legally allowed to work in the US allows them to push for better conditions.

And being allowed to keep using cheap labour without limits allows companies to push for worse conditions, and not just for them, but for everybody working legally.

Snerk. No, I really don’t.

Maybe you don't, right. Because you're a social-darwinist freak, but then you should just stop complaining when your "candidate" loses the elections to a pile of Orange Shit.

[mr friendly guy]

Given what we've seen so far though, I'm not at all convinced that the overall quality of life has really improved in countries which had the misfortune of signing up to a major trade agreement with a country much more powerful / with corporations much more powerful than they are ... IMO our current trade agreements are for the most part exploitation, pure and simple. And the only ones really benefitting on either side are usually those who are wealthy to begin with.

What about countries like China from initial trade with the US. Or SE Asia and India where outsourcing goes to. The trade in the examples might not fall under a formal free trade agreement, but they do include examples of what you find onerous in free trade, ie the outsourcing of jobs to lower cost labour in other nations.

Do you feel the population of these developing nations (which have decent GDP growth rate and increase standard of living year after year), benefited overall from trade with wealthy nations? To go further, did the population of wealthy countries not benefit from keeping inflation down with cheap goods from these countries? Keep in mind, most people in developed nations are in service industry rather than manufacturing.

[Tribble]

What about countries like China from initial trade with the US. Or SE Asia and India where outsourcing goes to. The trade in the examples might not fall under a formal free trade agreement, but they do include examples of what you find onerous in free trade, ie the outsourcing of jobs to lower cost labour in other nations.Do you feel the population of these developing nations (which have decent GDP growth rate and increase standard of living year after year), benefited overall from trade with wealthy nations?

For most of China's and India's history, definitely not. Don't forget the large role that corporations played in colonialism.

As to the modern day, as you've said agreements made with China are generally not NAFTA / TTIP / TPP / CETA type deals, which seem to be turning into the new international standards. If those deals were to become the norm in China and India, I'd expect not.

Also bear in mind that even at their weakest China and India are much bigger players than most other countries, and their ability to influence events and agreements to their favour ahs always been correspondingly larger. Generally harder to steamroll over a country with a large army and nukes.

It's also hard to know precisely how much of their advancements was due to "free trade" directly and how much of it was due to massive internal reorganizations (particularly in China). Though I'm not an expert on China / Indian economies, even if the average persons living standards have improved overall I doubt it's anywhere near where it could be, and IMO it seems likely that the trade agreements are still very exploitive (though less so than for smaller countries such as Vietnam).

And it depends on what we mean by "living standards." For example, could we consider the ability for a family to own land and grow food important? The ability for a person to own the means of production to be largely self-sufficient if they wish? If so, in that respect at least far from having their living standards raised all nations of the world are sinking down to our level. Mexico is a perfect example with the total gutting of their agricultural sectors once free-trade really took off. How could a Mexican farmer hope to compete with a massive corporate Mexican farm, even in Mexico? While some like Ralin may see this as a plus, I'm far less certain.

To go further, did the population of wealthy countries not benefit from keeping inflation down with cheap goods from these countries? Keep in mind, most people in developed nations are in service industry rather than manufacturing.

At least in terms of Canada I would say no. Any potential benefit from keeping inflation lower was more than offset by the massive exodus of decent paying work. Wages have been more or less flat lined for awhile now, and when you factor in inflation they have in fact declined. Most people in Canada are switched over to the service industry precisely because the manufacturing sector was allowed to be outsourced to those very same countries they are now buying products from. Not that the service industry isn't immune to job out-sourcing either, and that's taken off quite a bit over the past few years, particularly in the banking / IT sectors.

To be fair, Canada does not really need to trade with less-developed nations in order to maintain its economy. The US is our next door neighbour and by far biggest trading partner while Europe isn't that far away. In purely self-interest terms, there isn't much to gain and plenty to lose by expanding NAFTA type deals towards countries like Vietnam, which would have been included in the TPP btw. Especially with the ISDS provisions.

Robotics combined with sophisticated A.I. is of course the ultimate job killer, though that's not really in the scope of this discussion.

[Tribble]

Again my opinion would differ quite a bit if trade agreements were explicitly designed to also raise / protect living standards, labour rights, environmental protection etc instead of just focusing solely on corporate profits. And without the modern trend of ISDS provisions. Oh, and if said agreements weren't negotiated in virtual total secrecy to the point where even most politicians are generally not allowed to view working drafts, let alone take notes or discuss them, until said negotiations are completed and signed. And the public generally has zero input whatsoever. I'm thankful everyday that Belgium had the courage (and the constitutional ability at the national / EU level) to force a full review of CETA and make it implemented provisionally with the ISDS components left out for the time being.

[FTeik]

Well, it all depends on what the prospective parters write in their trade-agreements. Would you be in support, if they agree on trading their goods freely, but for the goods to be able to be sold in a certain market they have to meet the local standards? What if your standards on quality and enviromental/consumer friendlyness are actually lower, than those of your partner? What do you do, if one partner doesn't subsidizes a certain kind of goods, but the other does (and can't stop doing so without causing a huge outcry among his electorate (like the agricultural sector in France)).

What I am trying to say is, that to take all possible concerns into account is a huge and lenghty process, so it shouldn't come as a surprise, if the negotiating parties often end up with the lowest common denominator. But at one point they want to show the results of their efforts to their electorate, no matter how good or bad those results actually are. So it takes a lot of patience and if the average citizen wants to have a say in the matter, he better makes sure he applies the necessary supervision and - if necessary - pressure. I don't think, that outsourcing the decesion-making process to representative delegates and only expressing your political views every few years during an election still works in a world as complex and fast-paced as ours today.

Also I'm not in favour of protectionism and isolationism, because that would be jumping from the fire into the frying pan, but I think we need a shift of paradigms from "free" to "fair" trade agreements, so that both sides are actually able to benefit and not that the stronger partner screws the weaker partner over. A strategy of "beggar-thy-neighbour" will sooner or later backfire and help no-one in the long run.

[Tribble]

Well, it all depends on what the prospective parters write in their trade-agreements. Would you be in support, if they agree on trading their goods freely, but for the goods to be able to be sold in a certain market they have to meet the local standards? What if your standards on quality and enviromental/consumer friendlyness are actually lower, than those of your partner? What do you do, if one partner doesn't subsidizes a certain kind of goods, but the other does (and can't stop doing so without causing a huge outcry among his electorate (like the agricultural sector in France)).

What I am trying to say is, that to take all possible concerns into account is a huge and lenghty process, so it shouldn't come as a surprise, if the negotiating parties often end up with the lowest common denominator. But at one point they want to show the results of their efforts to their electorate, no matter how good or bad those results actually are. So it takes a lot of patience and if the average citizen wants to have a say in the matter, he better makes sure he applies the necessary supervision and - if necessary - pressure. I don't think, that outsourcing the decesion-making process to representative delegates and only expressing your political views every few years during an election still works in a world as complex and fast-paced as ours today.

Also I'm not in favour of protectionism and isolationism, because that would be jumping from the fire into the frying pan, but I think we need a shift of paradigms from "free" to "fair" trade agreements, so that both sides are actually able to benefit and not that the stronger partner screws the weaker partner over. A strategy of "beggar-thy-neighbour" will sooner or later backfire and help no-one in the long run.

Note that with some of the countries being questioned (like China and Vietnam) there is far less worry about the public. Are you suggesting that we adopt their systems of government for efficiency's sake?

I agree with the shift of paradigms from "free" to "fair" trade agreements, and I've been wishing for that for quite awhile.

[FTeik]

Well, it all depends on what the prospective parters write in their trade-agreements. Would you be in support, if they agree on trading their goods freely, but for the goods to be able to be sold in a certain market they have to meet the local standards? What if your standards on quality and enviromental/consumer friendlyness are actually lower, than those of your partner? What do you do, if one partner doesn't subsidizes a certain kind of goods, but the other does (and can't stop doing so without causing a huge outcry among his electorate (like the agricultural sector in France)).

What I am trying to say is, that to take all possible concerns into account is a huge and lenghty process, so it shouldn't come as a surprise, if the negotiating parties often end up with the lowest common denominator. But at one point they want to show the results of their efforts to their electorate, no matter how good or bad those results actually are. So it takes a lot of patience and if the average citizen wants to have a say in the matter, he better makes sure he applies the necessary supervision and - if necessary - pressure. I don't think, that outsourcing the decesion-making process to representative delegates and only expressing your political views every few years during an election still works in a world as complex and fast-paced as ours today.

Also I'm not in favour of protectionism and isolationism, because that would be jumping from the fire into the frying pan, but I think we need a shift of paradigms from "free" to "fair" trade agreements, so that both sides are actually able to benefit and not that the stronger partner screws the weaker partner over. A strategy of "beggar-thy-neighbour" will sooner or later backfire and help no-one in the long run.

Note that with some of the countries being questioned (like China and Vietnam) there is far less worry about the public. Are you suggesting that we adopt their systems of government for efficiency's sake?

No, I'm suggesting, that the public needs to be MORE involved to make sure, that its interests are represented. Because otherwise the politicians and bureaucrats, who often have little expertise themselves of such complicated matters will solely be influenced by the corporations and their lobbyists and lawyers, who usually have the know-how and make the efforts to benefit their interests.

[Tribble]

Well, it all depends on what the prospective parters write in their trade-agreements. Would you be in support, if they agree on trading their goods freely, but for the goods to be able to be sold in a certain market they have to meet the local standards? What if your standards on quality and enviromental/consumer friendlyness are actually lower, than those of your partner? What do you do, if one partner doesn't subsidizes a certain kind of goods, but the other does (and can't stop doing so without causing a huge outcry among his electorate (like the agricultural sector in France)).

What I am trying to say is, that to take all possible concerns into account is a huge and lenghty process, so it shouldn't come as a surprise, if the negotiating parties often end up with the lowest common denominator. But at one point they want to show the results of their efforts to their electorate, no matter how good or bad those results actually are. So it takes a lot of patience and if the average citizen wants to have a say in the matter, he better makes sure he applies the necessary supervision and - if necessary - pressure. I don't think, that outsourcing the decesion-making process to representative delegates and only expressing your political views every few years during an election still works in a world as complex and fast-paced as ours today.

Also I'm not in favour of protectionism and isolationism, because that would be jumping from the fire into the frying pan, but I think we need a shift of paradigms from "free" to "fair" trade agreements, so that both sides are actually able to benefit and not that the stronger partner screws the weaker partner over. A strategy of "beggar-thy-neighbour" will sooner or later backfire and help no-one in the long run.

Note that with some of the countries being questioned (like China and Vietnam) there is far less worry about the public. Are you suggesting that we adopt their systems of government for efficiency's sake?

No, I'm suggesting, that the public needs to be MORE involved to make sure, that its interests are represented. Because otherwise the politicians and bureaucrats, who often have little expertise themselves of such complicated matters will solely be influenced by the corporations and their lobbyists and lawyers, who usually have the know-how and make the efforts to benefit their interests.

Ah ok, I took that the wrong way.

[mr friendly guy]

For most of China's and India's history, definitely not. Don't forget the large role that corporations played in colonialism.

In case it wasn't clear, I am talking about relatively modern times. So from China's case, since the opening up process started in 1978.

As to the modern day, as you've said agreements made with China are generally not NAFTA / TTIP / TPP / CETA type deals, which seem to be turning into the new international standards. If those deals were to become the norm in China and India, I'd expect not.

I also think some of these agreements go too far, for example in regards to ISDS. I don't know enough about NAFTA to comment. I am interested though, because you also object to other aspects such as outsourcing.

Also bear in mind that even at their weakest China and India are much bigger players than most other countries, and their ability to influence events and agreements to their favour ahs always been correspondingly larger. Generally harder to steamroll over a country with a large army and nukes.

China has managed to use its size in certain ways which a smaller country like Vietnam can not. For example requiring joint ventures for access to its markets whether it be a piece of tech or Hollywood films. This again is a very recent phenomena like mid 90s. However I would contend the poorer countries still benefit from the outsourcing parts as it helps their industrialisation and this happens irregardless of China's size advantage. Or in other words, China might be able to negotiate benefits a smaller country could not, but I am not talking about those specific cases.

It's also hard to know precisely how much of their advancements was due to "free trade" directly and how much of it was due to massive internal reorganizations (particularly in China). Though I'm not an expert on China / Indian economies, even if the average persons living standards have improved overall I doubt it's anywhere near where it could be, and IMO it seems likely that the trade agreements are still very exploitive (though less so than for smaller countries such as Vietnam).

I think outsourcing gave them a leg up so to speak. As with all dividends, if you don't spend it wisely it won't come to much. The phrase "anywhere near where it could be," is a pretty vague term and hard to prove either way. I would contend its very hard for a relatively unindustrialised country to become industrialised when there are already so many industrialised countries. If you try and make have industry, the industrialised countries already have you beat in terms of superior means of production and your goods won't compete well with them. You could of course put up trade barriers, but their goods may be smuggled in anyway. Or you could let them bring their means to production to your country in the form of outsourcing.

And it depends on what we mean by "living standards." For example, could we consider the ability for a family to own land and grow food important? The ability for a person to own the means of production to be largely self-sufficient if they wish? If so, in that respect at least far from having their living standards raised all nations of the world are sinking down to our level. Mexico is a perfect example with the total gutting of their agricultural sectors once free-trade really took off. How could a Mexican farmer hope to compete with a massive corporate Mexican farm, even in Mexico? While some like Ralin may see this as a plus, I'm far less certain.

GDP / capita, GINI, percentage of people above the poverty line. The ability of a family to grow food is less important than the ability for food to be supplied (usually by that country). A lot of farmers in China for example were but subsistence farmers. That is they could feed themselves, and maybe sell a bit of produce to others. When they move to the cities to get factory jobs their income shoots up dramatically and they can thus afford more food even if they themselves no longer grow it.

At least in terms of Canada I would say no. Any potential benefit from keeping inflation lower was more than offset by the massive exodus of decent paying work. Wages have been more or less flat lined for awhile now, and when you factor in inflation they have in fact declined. Most people in Canada are switched over to the service industry precisely because the manufacturing sector was allowed to be outsourced to those very same countries they are now buying products from. Not that the service industry isn't immune to job out-sourcing either, and that's taken off quite a bit over the past few years, particularly in the banking / IT sectors.

Looking at the statistics.
http://www.statcan.gc.ca/pub/75-001-x/2 ... 88-eng.htm

The share of manufacturing in total employment has regressed persistently in almost all OECD member countries. This is not a recent trend. For example, in the early 1970s, more than one in five jobs in the United States were in manufacturing. In 2003, this proportion barely exceeded 11%. In the United Kingdom, over 30% of jobs in the early 1970s were in manufacturing. In 2003, this proportion dropped to 12.

Most people were not in manufacturing in the first place. Those who aren't, would benefit from cheaper prices and thus the majority of people benefited. If overall wage growth has been stagnant, it also stands to reason decline in manufacturing can't account for the majority of it since most people were not in manufacturing, unless manufacturing paid its workers much more than other industries.

I think there are good geopolitical reasons (ie sanctions, war) to keep manufacturing in a country rather than the jobs per se. That is this can be done with the advances in automation. However the geopolitical reasons mentioned are a separate topic from whether people overall benefited from outsourcing as part of free trade.

[Ralin]

Try competing with cheap labour yourself.

I do. Quite a bit of it from your country at the moment.

Blah blah, social-darwinist crap.

Not propping up industries that can’t compete or turn a profit: social-darwinist crap.
And people wonder communism didn’t work.

No, not every time, and inside the nation the national law still rules supreme.

And in this case the national law would be that signatories to the treaty can’t violate the spirit of the free trade agreement by bogging businesses, especially foreign businesses, down with unnecessary and punitive regulations aimed at preventing from making money.

Yes, I don't like it

Oh, so you’re the sort who complains about those damned Mexicans taking our jobs? Suddenly your pro-Trump and anti-Hillary crap this past year is making more sense.

Moreover, I don't like you and your kind, and I take great pleasure in the fact you have been humiliated by the Orange Monster. In fact, the humiliation of such social-darwinist bastards like you is the only good thing to come out of it.

I hope I will see your free-trader tears flowing like a river, so that I could play the tiniest violin.

And this is the thing you need to bear in mind about Internet Maoists like Stas: For all that they talk about the horrible conditions of the working class and people in the developing world or whatever the truth is that they want human suffering. They want poverty. It’s far, far better to Stas that people be poor or unemployed or (apparently) be lynched for being gay or dark-skinned because if the EVIL CAPITALISTS somehow actually made things better that would violate his precious ideology. And you just can’t have that, can you Stas?

Cry me a river. I've been in the US, and I've been in China. Neither process was excruciating or hellish - and I'm basically a Third World citizen applying for these papers.

And what Stas? You oppose making it easier for other people to do the same?

So now what? You apply for the visa? You accept the rules of the nation that is issuing it. If it chooses to deny you entry, this is (however awful it might sound) its sovereign right. I know it sounds strange to you, but such is life

What part of this means we shouldn’t make it easier for people to come to the US for work?

I'd rather accept this than the rule of corporations. Why do I know it? Because the corporations would, for example, gladly work with much cheaper wages. But they cannot (not when hiring foreign specialists, evidently) due to legal requirements in where I live. So, no unfettered access to the labour market actually improves my conditions. Corporations would also be glad to have people work unpaid overtime and over 10 hours, but this, again, is strictly forbidden. Corporations would love to deny vacation as they please, but this is also forbidden by law. Following the national laws is very important, and it improves things for all workers.

I like how in your mind a treaty that forbids passing laws geared to fuck over foreign companies is the ‘the rule of corporations.’

Maybe you don't, right. Because you're a social-darwinist freak, but then you should just stop complaining when your "candidate" loses the elections to a pile of Orange Shit.

Maybe you should get over this idea that your problems are because people with money refuse to spend all of it on charity for you. Corporations are not a welfare office and they do not exist to serve the public, by which you evidently mean yourself. Corporations exist to serve their investors. You know. The people who actually own them and who are entitled to make decisions about their own damned property.

[mr friendly guy]

Jonathon Ross has some interesting thoughts on trade. This academic is quite bullish on China and pro free trade, and pretty much has stated if the US under Trump won't promote it, then let China do it. He sites another study to give an example of the costs and benefits of protectionism. Read my summary of the figures if you don't want to read the whole spiel.

http://ablog.typepad.com/

I will cut the introduction and focus on the example he gives

An example of the US tire industry

Starting with a case study, one of the most important recent examples of US protectionism was in September 2009 with imposition of a US tariff on import of Chinese tires. President Obama, in his 2012 State of the Union, address claimed over a thousand jobs had been preserved in the US tire industry by this. But this was a pure distortion of the overall effects on the US economy because the President did not mention far more jobs were lost in lost in the rest of the US economy due to this policy than were saved in US tire manufacturing while the cost to US consumers was quite extraordinarily high. It would have cost less than one twentieth of the price if instead the tire workers had been subsidized to the entire cost of their salaries rather than the tariff introduced.

The economic calculations are clear and readers are recommended to the study ‘US Tire Tariffs: Saving Few Jobs at High Cost’ by Hufbauer and Lowry of the Peterson Institute for details, of which the following are a summary.

US tariffs reduced tire imports from China by 67% - an intended goal. As it was a country specific tariff the great majority of Chinese tires were replaced by Mexican, Thai, Indonesian and other imports. Nevertheless, employment in the US tire industry rose by 1,200 – hence President Obama’s claim.

Nevertheless, tire imports from other countries were more expensive than China so the annual increase in the cost of tires to US customers rose by $1.1 billion. Consequently 1,200 US tire jobs were saved at a cost of $1.1 billion – over $900,000 each.

Furthermore, the average annual salary of US tire workers was $40,070. Therefore:

It would have been far cheaper to subsidize the workers directly than impose the tariff.
Less than 5% of the cost of the tariff went to tire workers, the rest was taken by tire manufactures and others – as shown by US tire prices rising almost 5% a year faster than the average producer price index following the tariff. US customers therefore had lower living standards due this higher inflation.
As Hufbauer and Lowry noted accurately: ‘Most of the money extracted by protection from household budgets goes to corporate coffers, at home or abroad, not paychecks of American workers. In the case of tire protection… fewer than 5 percent of the consumer costs per job saved reached the pockets of American workers ($48 million out of $1,112 million).

Indirect costs of protectionism

But these were only direct costs to the US economy and workers. The indirect negatives for US living standards and jobs were more severe. The $1.1 billion extra spent on tires could not be spent on other items, therefore other parts of the economy had lower sales and consequently suffered job losses. As ‘US Tire Tariffs: Saving Few Jobs at High Cost’ concluded: ‘By dividing the total number of workers employed in the retail services at the end of 2011 by annual sales… 3,507 retail sales jobs are created in the United States for every one billion dollars spent in the domestic retail market. The tire safeguards extracted an estimated $1,112 million annually from US consumers; at the same time, the safeguards put $48 million in the pockets of otherwise unemployed tire workers. The net effect was to reduce consumer spending on other retail goods by about $1,064 million, indicating that the safeguard tariffs probably cost around 3,731 jobs in the retail sector…. when the retail job loss figure is offset against… 1,200 manufacturing jobs saved, it appears that safeguards actually cost the American economy around 2,531 jobs.’

The actual effect of the tire tariffs was to cost US customers $1.1 billion and reduce the number of US jobs by 2,500!

There were possibly also other indirect losses. China raised tariffs on US chicken part imports soon after US tariffs were imposed on China’s tire exports - producing a 90% fall in US chicken part exports to China. China officially denied there was any connection between these actions but many economists point out that retaliation is an inevitable part of trade wars.

Therefore ‘US Tire Tariffs: Saving Few Jobs at High Cost’ concluded: ‘The big winners from the 2009 safeguard tariffs were alternative foreign exporters, primarily located in Asia and Mexico, selling low-end tires to the United States. Domestic tire producers were secondary beneficiaries. The members of the labor union that petitioned the ITC’s investigation received only a small share of the money extracted from the pockets of American households… Jobs created in the tire manufacturing industry were more than offset by the loss of jobs in the US retail sector. As an added consequence, US chicken firms lost export sales in the wake of Chinese retaliation.’

As alongside these losses in the US, Chinese tire makers lost this can entirely accurately be described as a ‘lose-lose’ outcome for both countries.

The overall costs of protectionism

It is important to be clear that the $900,000 costs per job ‘saved’ in the tire industry was not some extreme untypical example. Extraordinarily high costs for job ‘protection’ by tariffs are typical as findings have been repeatedly confirmed over a long time period. A 1986 survey of 31 industries found the cost to consumers per job ‘saved’ in industries with protectionism ranged, in 2016 prices, up to $2.2 million and averaged $516,000. A study in 1994 found that the average cost of protecting a job in the US by tariffs at that time was $275,000 in 2016 prices. The estimated cost of saving a job in the US steel industry in 2001 by tariffs was $490,000 at today’s prices.

So expensive are any jobs ‘saved’ in industries by protectionism that they cannot be used on a large scale -other factors affecting US jobs are far more powerful. As Nobel Prize winning US economist Paul Krugman noted: ‘the level of employment is a macroeconomic issue… with microeconomic policies like tariffs having little net effect.’ Indeed, as with tires, the microeconomic effects on jobs of tariffs are likely to be negative.

Consequences for US exporters

It should be noted that so far only negative effects within the US have been analysed. But increased costs in the US economy due to tariffs also raise the international cost base of US companies, thereby negatively affecting US exporters. Approximately one in eight US goods and service is exported, therefore the negative domestic effect of US tariffs extends into the international field depressing jobs and wages in US exporting companies. As Mark Perry, University of Michigan professor of finance and economics, noted in an analysis with the self-explanatory title ‘How Trump’s tactics for saving US jobs could kill them instead’: ‘Trump’s attempts to “bring jobs back to the US” or “keep jobs from leaving the US” will likely backfire and kill US jobs in the long run.’

Rick Newman in an article at Yahoo Finance analyzed the process whereby this occurred: ‘pressuring companies to accept higher production costs, which Trump is essentially doing, could easily backfire and destroy more jobs than if Trump were to do nothing.’ Specifically analyzing pressure put by President Trump on US air conditioner manufacturer Carrier Newman noted: ‘‘Carrier’s competitors include Trane and American Standard, both owned by Ingersoll-Rand, which is based in Dublin, Ireland; Rheem, headquartered in Atlanta; and Goodman, owned by Daikin, a Japanese conglomerate. Each has manufacturing operations all over the world. If any one company has higher costs than another—whether labor, components or anything else—its products will be more expensive than the competition and sales will most likely decline… compared with competitors able to undercut such firms on price… Businesses bear those higher costs as well, and they’ll have less money to hire people if other costs go up.’

It is equally a myth US tariffs will protect ‘high paying’, ‘middle class’ US jobs compared to ‘low paying’. As Tim Worstall at Forbes noted, analysing trends since the 1980s: ‘America has lost some 7 million manufacturing jobs and added some 53 million jobs in services. This is just what happens with advanced economies--it's easier to increase productivity in manufacturing than it is in services… Thus, over time, [just as] the proportion of the workforce engaged in agriculture falls, so too does the proportion in manufacturing…

‘Further, of those 53 million new jobs some 62% of them were in higher paying occupations than those "high paying good jobs" in manufacturing we lost. Yes, really, 33 million higher paying jobs came along to replace those 7 million lost.’

Such realities regarding tariffs, naturally, do not mean that the US population should not demand measures improve their wages and job prospects. It is simply that tariffs are not the method to achieve this. Instead measures such as job training, education and infrastructure investment are what is required. ‘US Tire Tariffs: Saving Few Jobs at High Cost’ put the real alternative to tariffs precisely: ‘tariffs extracted more than one billion dollars annually from American households, causing a net loss of jobs in the American economy, when job losses in the retail sector are off set against job gains in the manufacturing sector. Collecting a billion dollars in taxes or tolls, and spending the money on renewing dilapidated infrastructure, would create some 7,000 jobs in construction and many more in manufacturing, a far better outcome for the US economy.’

Long story short.
1. The US protects manufacturing 1200 jobs in tires via tariffs against China.
2. This cost $1.1 billion extra in spending on tires in the US.
3. That is more than $900,000 per job. The average wage of the tire employee is only $40,070

But wait there is more
4. With more spending on tires, there is less spending on other things. The extra spent on tires is suspected to cost 3,731 retail jobs elsewhere. We save 1200 jobs in the manufacturing industry but arguably prevented thrice the number being created in retail.

No it gets better. Because we haven't taken into account

5. When China inevitably retaliated by putting up its own trade barriers to US goods and services.

[K. A. Pital]

I do. Quite a bit of it from your country at the moment.

Expected. Have crappy life standards for millions of people and they will lose all sense of self-respect. Allow them to work elsewhere, and they are prime material for exploitation.

Not propping up industries that can’t compete or turn a profit: social-darwinist crap.

Yes, because it is very primitive to think that if labour costs alone make something cheaper, it automatically means you have to shift production. I am actually a planner, so I do, in broad terms as well as in detail, know what I am talking about. The system is geared to behave that way because short-term financial results have eclipsed most other considerations.

And in this case the national law would be that signatories to the treaty can’t violate the spirit of the free trade agreement by bogging businesses, especially foreign businesses, down with unnecessary and punitive regulations aimed at preventing from making money.

Very well. I hope you'd lose a limb or two from thalidomide, just so you get a feel of living without punitive regulations that prevent companies from making money:

After all, that shit was banned and it prevented companies from making money. So could be challenged by an ISDS-type court. Too bad you probably have not, and that's why your fingers directly channel the vile shit from your head into the outer universe.

Oh, so you’re the sort who complains about those damned Mexicans taking our jobs? Suddenly your pro-Trump and anti-Hillary crap this past year is making more sense.

I couldn't give a damn about "those damned X" taking "our jobs". In fact I am the X who is taking your First World jobs. Watch out, fucker.

And you just can’t have that, can you Stas?

See the picture above concerning capitalists making things better.

For all that they talk about the horrible conditions of the working class and people in the developing world or whatever the truth is that they want human suffering. They want poverty.

That's quite some guilt-shift coming from someone whose country elected said Monster in the first place. In what way did I "want it" when I said above quite plainly the only good thing to ever come out of it was the humiliation of those like yourself?

And what Stas? You oppose making it easier for other people to do the same?

I oppose making it easier for capitalists to hire people like me and make them work for pennies. If they want to hire us, they better give us a decent full package and conditions have to be equal to those workers who are nationals of said country, to the greatest possible extent. The fact that you can't wrap your head about this simple idea shows just how dumb you really are.

What part of this means we shouldn’t make it easier for people to come to the US for work?

Nothing. If you understand my argument above (equality of working and living conditions and pay for everyone regarless of whether immigrant or not), then you'd understand that I do care about people. Maybe not in the same way you do, because to you "we let him in, good nuff, now he can do as he pleases" is enough already.

I'd rather accept this than the rule of corporations. Why do I know it? Because the corporations would, for example, gladly work with much cheaper wages. But they cannot (not when hiring foreign specialists, evidently) due to legal requirements in where I live. So, no unfettered access to the labour market actually improves my conditions. Corporations would also be glad to have people work unpaid overtime and over 10 hours, but this, again, is strictly forbidden. Corporations would love to deny vacation as they please, but this is also forbidden by law. Following the national laws is very important, and it improves things for all workers.

I like how in your mind a treaty that forbids passing laws geared to fuck over foreign companies is the ‘the rule of corporations.’

I have explained precisely what are the consequences of corporations being able to avoid or challenge national law. Right now, changing the national law to that of the Orange Fascist country is impossible. There is no way to have people to work over 10 hours, and there is no way to hire Third World immigrants under less-than-average-wage conditions, and there is no way to hire people below min wage, and to deny or force people to replan vacations. This is a matter of fact. Now there is no way for a company to work here unless it follows the laws. If it wishes to challenge them or break them, the matter will be taken to the courts. This is rule of law for dummies. The courts already offer companies the possibility to act within legal terms. Therefore, it is best if it stays that way. Once you allow a company to do illegal shit, this will stay like this for centuries.

So in very simple terms: your corporations follow local laws or have to get the fuck out. If they can't follow local laws, they will get the fuck out and someone else will take their place. It is not as if capitalism is unsuited to filling the void. Full stop.

Maybe you should get over this idea that your problems are because people with money refuse to spend all of it on charity for you. Corporations are not a welfare office and they do not exist to serve the public, by which you evidently mean yourself. Corporations exist to serve their investors. You know. The people who actually own them and who are entitled to make decisions about their own damned property.

I understand that in your world, everyone and everything just exists to serve the rich, because the rich own all the productive capital in the world and so have a priviledged status in your eyes. You've made your point already. Can't you not make yourself even more hateful and disgusting than you already are?

It is not about corporations being a "welfare office". They are not. It is about following the law. First, no more than 8-hours work in a given day on the average in a month, and no more than 10 hours work in a given day maximum for common workers. Second, no ability to ban people's vacations or force them to work on holidays (or take away holidays). Third, no ability to hire labour outside the country at below-average level. Fourth, no ability to hire labour inside the country at below-minimum level. Fifth, no ability and no right to destroy common goods like memorials and sights, and also forests, rivers and parks.

This is just made possible by following national law. Something you want to do away with. So... fuck you.