Protectionism

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patriot1
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Re: Protectionism

Post by patriot1 » 30 Oct 2016 18:18

ghariton wrote: I don't see any bilaterals with large economies on the horizon either.
UK? :lol:

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Re: Protectionism

Post by Shakespeare » 30 Oct 2016 18:23

We should try for bilaterals with India and China, but both will take a long time.

A bilateral with a post-Brexit Britain may be the easiest to achieve.

Added: didn't see previous post, which beat me to it.
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Re: Protectionism

Post by ghariton » 30 Oct 2016 21:20

I think that the U.K., if it survives, will be busy negotiating with the E.U. That will take a very long time.

China, India and Japan are probably the best long-term bets, but that will take decades. There was an interview recently with the Indian minister who would be responsible for such negotiations, and he seemed surprised at the idea. As for China, I think that human rights will be the biggest obstacle -- I doubt any Canadian government would find the necessary compromises, easy to make. That leaves Japan, with whom negotiations have already taken place some years ago. Maybe we could pick up there. Maple syrup in return for fugu fish.

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Re: Protectionism

Post by Shakespeare » 15 Nov 2016 14:07

Trump transition memo: Trade reform begins Day 1 - CNNPolitics.com
"The Trump trade plan breaks with the globalist wings of both the Republican and Democratic parties," the document notes. "The Trump administration will reverse decades of conciliatory trade policy. New trade agreements will be negotiated that provide for the interests of US workers and companies first."....

Day 1: Begin NAFTA reform
On Day 1, Trump would begin reforming NAFTA, including ordering the Commerce Department and International Trade Commission to begin a study on what the ramifications of withdrawing from the treaty would be, and what would be required legislatively to do so. He would also have the US Trade Representative notify Mexico and Canada that the US intends to propose some amendments to the treaty, which could include measures on currency manipulation, lumber, country of origin labeling and environmental and safety standards.
Although the target is Mexico, we should not expect changes to be to our benefit.
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Re: Protectionism

Post by CROCKD » 21 Feb 2017 20:06

" A verbal contract isn't worth the paper it is written on " Samuel Goldwyn
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Re: Protectionism

Post by Thegipper » 11 Mar 2017 04:55

I think a strong case can be made that US has greatly benefited from globalization. USA corporations dominate the global business world and sit upon 4 trillion after tax dollars outside the USA. The USA can only blame their stupid tax codes and rates as the reason why this capital doesn't come back to the USA.

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Re: Protectionism

Post by ghariton » 25 Apr 2017 00:51

U.S. levies preliminary duty of 20 per cent on Canadian softwood lumber.

As expected. And this is preliminary. An anti-dumping inquiry is still ongoing, and may result in additional countervailing duties.

The issue will go to a NAFTA review panel -- until such panels are abolished under a renegotiated NAFTA -- and to the WTO. Canada may well win in the long run, but in the meantime this will be painful. I don't think that the Canadian government has leverage on this one. Yes, I know, U.S. users of Canadian lumber won't like it, but I don't think that their voice is powerful enough to amount to much.

Some of the investing consequences seem clear. Avoid Canadian lumber companies and ancillary industries. As well, the CAD may take a hit tomorrow.

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Re: Protectionism

Post by kcowan » 25 Apr 2017 16:38

Given that the US always keeps the money they collect, I don't understand why Canada does not slap a 20% export tax on the lumber so that we keep the money?
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Re: Protectionism

Post by ghariton » 25 Apr 2017 17:20

kcowan wrote:
25 Apr 2017 16:38
Given that the US always keeps the money they collect, I don't understand why Canada does not slap a 20% export tax on the lumber so that we keep the money?
That's what we did in 1986, to resolve a previous phase of the dispute. But as I recall, Canada withdrew from the 1986 agreement in 1991, and the U.S. renewed its demand for countervailing tariffs at that time.

A very convoluted dispute, that has been going on for some 35 years. Currently all previous agreements have expired. A new agreement was supposed to be negotiated at the end of 2015, but with the change of government, that didn't happen.

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Re: Protectionism

Post by ghariton » 14 Jun 2017 14:20

So CETA, Canada's free trade deal with the EU, is due for implementation in July. But there are bumps on the road.

As part of the deal, Canada agreed to let in 18,000 of European cheese imports, duty-free. That is essentially an import quota, and presumably worth a lot of money. So who gets the quota, i.e. who gets the right to import European cheese duty-free? Well, it looks like 60 per cent of the quota qill be given (free) to the Canadian dairy producers.

The Europeans are very unhappy. They believe that the Canadian dairy producers will warehouse their quota, i.e. let it sit idle and so reduce that amount of European cheese coming into Canada. That way, they will keep prices high for domestic production. (I would add that they probably don't want Canadians too exposed from higher quality cheeses from elsewhere.)

Let them eat (domestic) cheddar.

And as for Canada being a champion of free trade, hmm... Let me consult our friendly marketing boards before doing anything so rash.

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Re: Protectionism

Post by ghariton » 27 Sep 2017 18:46

As expected, the U.S. government's preliminary decision is to levy countervailing duties on Bombardier, on the C-Series aircraft it wants to sell to Delta. And, also as expected, the Canadian government is denouncing Boeing and refusing to buy the Super Hornets.

The lead in to the story from the CBC is ominous:
After what seems like the first shot of a trade war....
Bombardier itself is at some risk:
The first casualty may be the fighter purchase, but Baskin said he believes that Bombardier's contract with Delta will have to be cancelled, because neither the airline nor the manufacturer will pay that enormous duty.

Even if the ruling is overturned on appeal before international trade watchdogs, he said, the timing of the ruling is horrible for Bombardier because of "its terrible balance sheet."
Other problems:
But the military could also be left in a long-term lurch.

The Liberals insisted they needed to buy 18 Super Hornets on an urgent basis to cover a gap in the country's ability to field fighters for Norad and NATO at the same time.

The next best option would be to buy used FA-18s from another country until a competition to replace the entire fleet of Canadian CF-18s is launched.

During the election campaign, however, Trudeau ruled out buying the Lockheed F-35 stealth fighter, and the bruising political rhetoric surrounding Boeing suggests that company has also been ruled out.

Defence experts say that leaves only European fighter jets to consider.

"I can't see us going ahead with a competition that doesn't include the North American entrants," said Dave Perry, of the Canadian Global Affairs Institute.

"They've painted themselves into a corner, and they're going to have to make a choice about which one of these positions they back away from."
Ouch, all around.

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The plural of anecdote is NOT data.

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Re: Protectionism

Post by AltaRed » 27 Sep 2017 18:50

I am kind of the view to simply have a short round of bidding for European fighters and get on with it. Given the stupidity of American behaviour, knowing full well Boeing is subsidized by the US anyway, and given CETA is now in effect, what better way to send a message?
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Re: Protectionism

Post by Shakespeare » 27 Sep 2017 18:51

They'll buy the Aussie F18s as interim.

The European fighters are insufficiently integrated with the USAF or USN.

Seeing Boeing cry "Subsidies!" is hilarious.

Added: Personally, I'd like to see us walk away if the US gets more ridiculous. "Cancel? Go ahead."


Terence Corcoran: Goodbye NAFTA, hello NATPA, our new North American Trade-Protection Agreement | Financial Post
After a few months of alleged negotiations, the three nations have yet to indicate any real interest in free trade. Every action, every comment, every appointment, every public statement, every speech, every analysis has been grounded in the language of trade protectionism.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Protectionism

Post by Spidey » 27 Sep 2017 22:27

Andrew Coyne has an interesting take on the Bombardier situation:
But all of this presupposes some sort of ordinary business relationship, as between two parties at arms’ length. Whereas it is increasingly clear the federal government, at least, views itself and Bombardier as being one and the same.

This was perhaps most explicit in the prime minister’s announcement earlier this week that the government would refuse to buy military jets from Boeing, though it had earlier said it would, on the grounds that “we don’t do business with a company that’s busy trying to sue us.”

Boeing, of course, is doing no such thing. The suit it has brought before the U.S. International Trade Commission is not against the government of Canada, but Bombardier. It was not Boeing that mistook the interests of the citizens of Canada for those of a private company, or that subordinated a critical military procurement decision to the outcome of a private trade dispute. It was the government of Canada that did that.
<Snip>
That Boeing has a perfect right to seek the protection of its own country’s trade laws; that Canada would be the first to cry foul if the situations were reversed; that Boeing, a global company with annual revenues nearly six times the Canadian defence budget, shows no signs of caving to this amateurish extortion attempt: all these are of secondary importance.
http://nationalpost.com/opinion/andrew- ... government
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Descartes
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Re: Protectionism

Post by Descartes » 28 Sep 2017 09:33

A take on Boeing versus Airbus from the EU perspective.

In short, none of these companies seem to prosper without massive government transfusion.
The governments, in turn, identify themselves with these coddled children.

Screw Boeing's fighter jets. Let's kickstart the Avro Arrow again! :P
How is Boeing supported by the US Government?
Boeing receives different forms of support from the US federal and state
governments that benefit the development, production and sales of its civil aircraft.
Taken together (e.g. tax breaks, R&D and infrastructure support), US support has
consistently exceeded the limit allowed under the EU-US Agreement of 1992 by 2 to
3 times. This support has not and will not be repaid to the US government.

Does Boeing receive R&D support?
Boeing relies on the R& D subsidies it receives from a variety of quarters.
In the US, Boeing receives subsidies from NASA’s and Department of Defense
programmes and contracts (estimated at being at least $22 billion), as well as the
Department of Commerce and the Department of Labor, e.g. by providing funds for
specific research into composite technology from which the 787 airframe will be
constructed and sophisticated software tools that Boeing will use for 787 design and
manufacture. Civil R&D support in the EU is granted in the form of generally
available programmes (e.g. the EU R&D Framework Programme) in which a large
number of companies participate, including Boeing.

Surely, the subsidies Boeing receives only benefit its military or space
business?
No.
So-called “military” and “space” subsidies provide considerable benefits for Boeing’s
civil aircraft business. Department of Defence and NASA subsidies for military and
space assignments have helped Boeing develop technologies (e.g. composites)
which the company in turn transfers without any cost to its civil aircraft production to
improve and manufacture the necessary technology. Boeing also makes use of DOD
centres and testing facilities to work on the design and wings of its civil planes. Those
subsidies have for instance enabled Boeing to develop the technologies used in its
B-787 and other civil aircraft models. This reduces, and effectively subsidises,
Boeing’s production costs and puts Airbus at a competitive disadvantage.
Another issue are non-competitive “military” contracts at inflated prices which benefit
Boeing’s civil aircraft business. The situation is therefore problematic: Boeing
receives a number of benefits courtesy of US government programmes, its non-
competitive military contracts, awarded at inflated prices by the US government,
benefits which are passed on to its civil airplane production. In other words, R&D for
Boeing’s civil airplanes is effectively being paid for from US military budgets, rather
than Boeing’s own pocket.
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ghariton
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Re: Protectionism

Post by ghariton » 28 Sep 2017 13:43

Two wrongs don't make a right.

Yes, Boeing is heavily subsidized by the U.S. government. U.S. taxpayers are paying huge amounts so that Boeing can sell aircraft below the cost of making them. That's just stupid. Not only is it an unnecessary burden for U.S. taxpayers, it comes at the cost of more productive uses of the money, and wastes society's resources as a whole. Instead of aircraft subsidies, spend on more extensive healthcare, for example.

And think of the consequences. Airlines get aircraft artificially cheaply, which enables them to charge lower prices to passengers, who fly more than they would otherwise. For those who are worried about GHG emissions, this should be terrible news, and a reasons for public protests.

<Crickets chirping>

Of course, many other governments are also subsidizing their aircraft manufacturers. As a result, the world market for commercial aircraft is highly distorted, and extremely difficult to operate a rational business in. These are fifty and seventy year old infants who will never grow up, and will require massive subsidies indefinitely.

Why does Canada want to participate in this foolishness? If other countries let themselves be governed by special interests, and narrow regional job-creation (and vote-buying) tactics, why must we? Rather, we should stop playing this stupid and harmful game. Instead of heavily subsidizing Bombardier forever, why not spend the money on things that will let real businesses grow, such as better infrastructure, lower corporate taxes, and so on?

Yes, Canada's role in the world aerospace industry will be limited to what we can do better than the others, rather than including markets into which we must buy our way. But so what?

As for Boeing, if the U.S. government and its taxpayers want to give us a gift, through high subsidies and low aircraft prices, why not accept a share of that money and say: "Thank you"?

George
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Re: Protectionism

Post by Descartes » 28 Sep 2017 16:11

1. Yes, government thinking seems to be:
massive R&D spending => technological breakthroughs => competitiveness => more and better jobs => happier and safer populace => votes!

2. Yes, a smaller (economically-wise) country like Canada needs to pick and choose what we spend our tax money on carefully.

I actually don't disagree with either of these points.

As to picking aerospace for a massive transfusion of government cash.. well, I personally think a focus on robotics would be much more profitable in the long-term, but there are side benefits to aerospace research.. I mean, we wouldn't have Tang without them, right? ;)
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Re: Protectionism

Post by CROCKD » 11 Oct 2017 13:37

Delta intend to go ahead with their order of Bombardier CS-100s.
Delta chief says airline won’t abandon Bombardier order
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