Protectionism

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AltaRed
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Re: Protectionism

Post by AltaRed » 07 Jan 2016 13:00

Australia is a lot closer to China and counts on China for considerably more of its trade. Aussies SHOULD be supportive of a deal with China (and SE Asia in general) as much as, or more than, with North America.
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Re: Protectionism

Post by ghariton » 07 Jan 2016 13:27

Shakespeare wrote:It's acceptable to Australia.
Australia is in a much different geopolitical situation than Canada. Its economy is already tightly integrated with China's (as I have found out the past few weeks with my Australia ETF) and some kind of free trade deal was a necessity. Even so, it took a decade to negotiate and was ratified only because at the last minute Australia imposed some tough regulations on labour mobility. (We shall see whether those regulations stand.)

I note that Australia has already gone much further than Canada to opening its economy to international players. For example, Australia dismantled its supply management system some years ago. As another example, Australia is outsourcing provision of its naval vessels. Canada is miles behind on such issues. We still think that Mickey Mouse and Donald Duck pose existential threats to our national identity.

Over and above the economic aspect, Australia has to worry about its security. China is becoming more assertive, and increasingly the U.S. has shown that its friends cannot count on it for protection.
one would see this announcement as a harbinger that the Liberals are about to pull the plug on TPP, and on CETA too.
They've made it clear they're supportive of both.
I did say this was the cynic's view. But many little factors are raising doubts as to the extent these particular promises will be kept. In particular, public pronouncements by Ms. Freeland and by Mr. Trudeau himself suggest that all options are open.

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Re: Protectionism

Post by ghariton » 15 Jan 2016 17:37

Canada's new "best buddy" on tradeis in town:
China wants to forge a historic free-trade deal with Canada, but a senior Chinese official said this will require Canadian concessions on investment restrictions and a commitment to build an energy pipeline to the coast.

<snip>

However, Mr. Han said China will come to the table with its own demands, namely the removal of restrictions put in place by the former Conservative government on Chinese state-owned investments in Canada’s oil and gas sector.

<snip>

China had also opened talks with the Harper government on a maritime energy corridor, which Mr. Han said is still a priority for his government.

<snip>

The Chinese desire for a pipeline may prove impossible to achieve. The new Liberal government effectively killed the Northern Gateway pipeline when it banned all crude-oil tanker traffic on the North Coast of British Columbia, while the B.C. government has refused to support the $6.8-billion expansion of the Trans Mountain pipeline. The leading contender now is Energy East, which would deliver oil from Western Canada to refineries and port terminals in New Brunswick and possibly Quebec, but it is years away from regulatory approval.
I wonder about the public reaction to giving the Chinese a free hand in our energy industry, Right now it looks like a very good idea to me, but there is a streak of xenophobia in Canada that will oppose a perceived loss of sovereignty.

As for the pipeline...

I smell a red herring.

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Re: Protectionism

Post by mudLark » 16 Jan 2016 11:02

ghariton wrote:...increasingly the U.S. has shown that its friends cannot count on it for protection.
The US no longer adopts a protectionist (or isolationist) position vis-à-vis its allies or its enemies. That is 20th century real-political thinking. The US is now at war with everybody. The US only has frenemies, and everyone and everything is an enemy first. The 21st century is a new style YOYO (you're on your own) century; policies and alliances are malleable and only have meaning until they don't. It's all and only about the money now. Save a few very real existential threats (and climate change is not one of them), everything else is only intended to distract the Muppets.

In this regard, Canada is far behind the curve and those who are not blind (very few) are sadly watching the backside of its economy disappear into the sunset.

Today's weapons of mass destruction are being deployed en-masse by the US, against [so-called] friends and enemies alike, as they export their inflation to the rest of the world (the new form of protectionism), and drive the value of their currency up (despite much recent dilution of its real value), in order to ensure that when this long period of adjustment ends they are still the world's greatest superpower.

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Re: Protectionism

Post by brucecohen » 20 Jan 2016 17:34

From HuffPo: Economists at Tufts University predict that over its first ten years the TPP will increase Canadian GDP by 0.28% but reduce employment by 58,000 and that the $4.3 billion dairy industry subsidy will offset almost all the $5 billion in additional economic activity expected. The article contains a link to the paper.

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Re: Protectionism

Post by AltaRed » 20 Jan 2016 17:48

Perhaps the price of entry in the first 10 years. I'd suggest NAFTA has done this country a whole lot more good than we would have been with the myriad of protective barriers we had before, despite some wrenching changes in our economy. Regardless, IF the USA goes into TPP and essentially abandons NAFTA, we have no choice but to be at the party.... wallflower or not. Bottom line, we will have to be in if the USA is in. The converse is not necessarily true.
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Re: Protectionism

Post by ghariton » 20 Jan 2016 21:19

brucecohen wrote:From HuffPo: Economists at Tufts University predict that over its first ten years the TPP will increase Canadian GDP by 0.28% but reduce employment by 58,000 and that the $4.3 billion dairy industry subsidy will offset almost all the $5 billion in additional economic activity expected. The article contains a link to the paper.
Here is the paper in question. Other research uses Computable Generalized Equilibrium (CGE) models of the economy (or economies, for international studies). The Capaldo paper spends the first two thirds criticizing such models. These models do make strong assumptions, as do all macro models, and have lost much of their lustre after the 2008 financial crisis. However, the consensus is that they are still the best we have.

Capaldo disagrees. He turns to another model, the United Nations Global Policy Model, with a general overview here. As far as I can tell this belongs to an older generation of model, popular in the 1960s and 1970s, but which fell out of favour for being unable to model stagflation in the 1980s.

It is not clear to me how Capaldo uses the GPM. His paper is remarkably light on methodology, assumptions, description of data, and so on.

In my personal view, the GPM is different, but no better, and likely less coherent than the CGE models, which isn't saying much. I would not place any weight at all on either modelling approach. The results you get mirror the assumptions you feed in. If you think trade is bad (as Capaldo seems to do -- he has a similar critique of the TTIP -- but see here), then the model will confirm that. If not, not.

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Re: Protectionism

Post by AltaRed » 25 Jan 2016 18:40

Canadian Business wrote a piece on 'how the 20,000 projected job losses' under TPP is challengeable.

http://www.canadianbusiness.com/blogs-a ... in-canada/

Key point: It is not a case of comparing Canada's situation with, or without TPP. It is a matter of comparing Canada inside the TPP, or outslde looking in. TPP will no doubt be ratified by a number of countries. It is whether the USA is in or out that makes the most difference to us.

Gotta be careful listening to the likes of UNIFOR. Never did like Jim Stanford's rhetoric anyhow.
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Re: Protectionism

Post by ghariton » 22 Feb 2016 02:02

Looks like the Liberal government is going to be a fierce defender of supply management, at least going by their appointment of key staff
After months of going without a chief of staff and instead relying on staff borrowed from Agriculture Canada, agriculture minister Lawrence MacAulay finally hired someone for the highest ranking job in his office in late December.


His choice was egg heiress Mary Jane McFall, whose extended family, led by sister Margaret, runs Burnbrae Farms. She officially started Jan. 4.

<snip>

McFall is no stranger to the agriculture industry. She is a former member of Egg Farmers of Ontario’s board of directors and worked as Burnbrae’s legal counsel in the 1990s before returning to private practice in 2000.

<snip>

Word of her initial appointment didn’t appear to trigger initial reaction from opposition parties or the agriculture industry, but in recent weeks concerns about her ability to build a firewall between the minster’s office and her family’s farm have grown. 


In a Financial Post piece published Jan. 19, Carleton business professor Ian Lee called McFall’s appointment a “grotesque and flagrant conflict of interest.”
Professor Lee is certainly outspoken, but on this one I agree with him. How can we expect reform of the supply management system, or even objective evaluation, when one of the chief beneficiaries is whispering into the Minister's ear?

For shame.

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Re: Protectionism

Post by ghariton » 03 May 2016 19:18

Supply management lives!!!!
Ottawa says it is committed to finding a “long-term solution” to surging U.S. imports of milk protein that farmers blame for sapping their incomes.

<snip>

It isn’t clear what Ottawa can do to limit U.S. imports of the highly concentrated liquid milk protein, which is used to make cheese and other dairy products. U.S. dairy suppliers and their backers in Congress have warned they will challenge any efforts by Canada to restrict their right to sell milk protein here.

The product is legally imported into Canada duty-free from the United States under North American free-trade rules. Most Canadian dairy processors – including those owned by farmers – import protein and use it as an ingredient because it’s cheaper and more efficient than industrial milk in the making of cheese, yogurt and milk-based drinks.

The product has created a growing breach in the massive tariff wall that protects the Canadian dairy industry. Milk protein imports reached nearly $200-million last year, up from virtually nothing in the mid-2000s. The Dairy Farmers of Canada says it cost farmers more than $230-million in lost revenue last year.
So... a race between technology and protectionism. But fear not. We will protect protectionism to the consumer's last dollar. Next step: Testing the DNA in cheese to ensure that it came from the milk of Canadian cows ... and no temporary foreign worker cows, please.

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Re: Protectionism

Post by Shakespeare » 26 May 2016 18:59

Donald the destroyer
Perception is reality, and the rush to accuse others of cheating in global trade is almost reflexive. American voters now believe trade agreements are intrinsically evil and that U.S. trade enforcement is broken — so they’re going to insist on a tougher trade agenda no matter who is elected....

Xenophobia works for Trump. Trashing trade agreements and bashing trading partners has played well with a receptive, angry electorate....

If elected, Trump could carry out his threats on trade, and would not need Congressional support to do so. Section 301 of the Trade Act of 1974 targets “discriminatory or other acts or policies which are unjustifiable or unreasonable and which burden or otherwise restrict United States Commerce.” That’s a clause that could cover a multitude of sins, real and imagined....

The remedial tools available to the president are virtually unlimited — and they include withdrawing the benefits of a trade agreement....

If NAFTA is terminated pursuant to Article 2105 — as it can be on six months’ notice – the Canada-United States Free Trade Agreement would still be available to preserve Canada’s preferential access to the U.S. market....
Unless it, too, is Trumped.

Bring on bilateral deals with sane partners....
“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 ghariton » 26 May 2016 21:50

Shakespeare wrote:Bring on bilateral deals with sane partners....
Just who did you have in mind?

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Re: Protectionism

Post by Shakespeare » 26 May 2016 22:00

I doubt that the TPP will survive, so we should be looking at bilateral trans-Pacific partners - particularly Japan.

Michael Den Tandt: Rise of Trumpism one reason Japan should aim for bilateral trade pact with Canada | National Post

(One starts to wonder if the US is regressing to 1930.)
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Re: Protectionism

Post by Shakespeare » 24 Jun 2016 19:58

Canada, U.S. free trade deals imperilled by British vote to leave EU
Even if the EU is able to follow through and finish its work on the agreement, the Brexit vote raises questions about the future viability of the bloc itself and therefore the trade deal, said Fen Hampson, a foreign policy expert at the Centre for International Governance Innovation in Waterloo, Ont.

Hampson questioned whether the narrow decision by British voters might trigger a similar "Frexit" movement in France, where there is more opposition to the EU, or in the Netherlands, as well as hastening the departure of financially battered Greece.

"The real question is: does CETA have any kind of a future?" he said. "I would say CETA is probably dead."
With TPP also likely dead, looks like we should start negotiations with Britain in about two years as soon as the divorce is final.
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Re: Protectionism

Post by ghariton » 02 Jul 2016 00:14

Amigos talk trade talk but don’t walk the walk
It was a busy day in Ottawa. But a dull day, too.

The first Three Amigos summit in Canada in nearly a decade succeeded in closing down the capital for the day but it achieved little else.

Seldom have so many blathered about the benefits of free trade, while showing so few signs that they really believe in it.

<snip>

Despite warnings about the perils of “pulling up the drawbridge,” in Obama’s words, there was nothing tangible achieved on further liberalizing trade or improving labour mobility.

More specifically, while Obama and Pena Nieto emphasized their commitment to the Trans-Pacific Partnership agreement, Trudeau didn’t mention the 12-member trade deal. The matter has been consigned to the long list of matters on which his government is “consulting with Canadians.”
It's going to be a long four years.

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Re: Protectionism

Post by Shakespeare » 02 Jul 2016 00:29

It's going to be a long four years.
As L. Ian MacDonald points out,
But significantly, Trudeau made no reference to the TPP in his introduction of Obama. There was a good reason for that. The chances of the TPP being adopted by Congress before Obama leaves office next January are somewhere between slim and none. And the presumptive nominees of both the Democratic and Republican parties, Hillary Clinton and Trump, are opposed to the TPP. Trudeau needn’t be in any hurry to present a TPP implementing bill to the House in the fall.
In other words, why waste political capital at this point?

[I personally suspect TPP is dead. Whether that's good or bad is irrelevant, since Canada has effectively no say: we will do what the Americans do.]
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Re: Protectionism

Post by ghariton » 02 Jul 2016 01:08

Shakespeare wrote:In other words, why waste political capital at this point?
I would have thought that would cut the other way. Trudeau could present himself as an advocate of free trade, knowing he would never have to actually deliver on the TPP. Too bad, we tried, but what could we do? Unless, of course, the Liberals really have had a change of heart and have become protectionist.
[I personally suspect TPP is dead. Whether that's good or bad is irrelevant, since Canada has effectively no say: we will do what the Americans do.]
Agreed.

But we have to start work on the next round, even if its fruition will come in five years or longer.

Meanwhile, we could start with free trade within Canada, across the provinces. That might not be a proper subject for an international meeting, but it would be encouraging for us to get our own house in order before venturing out again among the big boys.

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Re: Protectionism

Post by Shakespeare » 02 Jul 2016 01:17

Meanwhile, we could start with free trade within Canada, across the provinces. That might not be a proper subject for an international meeting, but it would be encouraging for us to get our own house in order before venturing out again among the big boys.
That would be good, although the provinces seem too parochial to agree - see the lack of support for one securities regulator.

Another barrier is the provincial regulating bodies, which often oppose free transfer of personnel, although that situation has improved substantially over the years.

Of course, there are still the marketing boards, which seem to have too much gerrymandering clout to be dismantled. :roll: (If the Conservatives wouldn't do it, probably no-one can.)
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Re: Protectionism

Post by patriot1 » 02 Jul 2016 12:26

ghariton wrote: Trudeau could present himself as an advocate of free trade, knowing he would never have to actually deliver on the TPP. Too bad, we tried, but what could we do?
Trudeau needs to keep the NDP voters that he picked up in the last election, so there's no point in promoting something that will erode their support when he's not in control of the outcome anyway. Better for it to be seen as a fait accomplit by the US, one way or another.

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Re: Protectionism

Post by scomac » 20 Jul 2016 13:11

Here we go again! Milkfare at it's finest!

Hike in milk prices irks food producers and restaurants
...the Canadian Dairy Commission announced it was raising the price of industrial milk, which is used to make cheese, yogurt, ice cream and butter, by 2.76 per cent on June 15.

The increase takes effect on Sept. 1, and it’s the second price increase this year. The CDC increased industrial milk prices by 2.2 per cent in February.
The CDC is a Crown corporation that implements national policies for milk production. It said in a July 15 press release that it raised prices for industrial milk to offset a “significant reduction in producer revenues in the last year” brought on by a decrease in world prices and partly due to larger sales of surplus milk protein in low-priced markets.
Well isn't that peachy? You overproduce and sell surpluses at reduced prices so you then summarily raise prices to domestic consumers to make up the short fall. It's great when you can get away with it, but I thought the whole point of this exercise was "supply management" not price management or revenue management! What a farce! I wonder how these clowns can keep a straight face, but when you're backed up by government writ I guess you can afford to be smug!
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Re: Protectionism

Post by ghariton » 14 Aug 2016 23:33

Why are so many people opposed to free trade Here is a view from the U.S.:
The issue then becomes why people think that globalization is bad for the economy in the first place. In other words, why do they doubt what so many economists teach about the gains from trade? The data analysis of Mr. Mansfield and Ms. Mutz suggests that skepticism about trade and outsourcing is closely related to three other sets of beliefs.


The first is isolationism more broadly. Trade skeptics tend to think, for example, that the United States should stay out of world affairs and avoid getting involved in foreign conflicts. They are not eager for the United States to work with other nations to solve global problems like hunger and pollution.


The second is nationalism. Trade skeptics tend to think that the United States is culturally superior to other nations. They say the world would be better if people elsewhere were more like Americans.


The third is ethnocentrism. Trade skeptics tend to divide the world into racial and ethnic groups and think that the one they belong to is better than the others. They say their own group is harder-working, less wasteful and more trustworthy.
Twenty-first century s version of tribalism...

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Re: Protectionism

Post by Shakespeare » 21 Oct 2016 12:03

Canada-EU trade talks with Wallonia collapse as Freeland heads home - Politics - CBC News

ISTM if Wallonia can block an EU trade deal that there will be no more attempts to get trade deals with the EU.
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Re: Protectionism

Post by gobsmack » 22 Oct 2016 09:00

Shakespeare wrote:ISTM if Wallonia can block an EU trade deal that there will be no more attempts to get trade deals with the EU.
The Financial Post is reporting that 90% of the treaty will come into effect regardless of any objections by individual states:
Each EU member state needs to approve the agreement for 100 per cent of the deal to pass. However, if the EU parliament ratifies the deal, then the 90 per cent of the provisions under EU jurisdiction will be implemented.

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Re: Protectionism

Post by Shakespeare » 30 Oct 2016 11:08

Prime Minister Trudeau signs Canada-EU trade deal in Brussels - The Globe and Mail

So, the tactic of walking out worked (and was likely necessary - the EU had to get its act together).

Might be the last multi-country deal around for Canada for some time, with TPP likely DOA in the US.
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Re: Protectionism

Post by ghariton » 30 Oct 2016 18:11

Shakespeare wrote:Might be the last multi-country deal around for Canada for some time, with TPP likely DOA in the US.
Most likely.

I don't see any bilaterals with large economies on the horizon either.

Productivity gains will be slow.

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