Protectionism

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Re: Protectionism

Post by Shakespeare » 07 Oct 2015 19:04

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Re: Protectionism

Post by Jaunty » 07 Oct 2015 19:21

But, won't it be ratified (or turned down) in the US before next year's Presidential election?

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Re: Protectionism

Post by adrian2 » 07 Oct 2015 20:07

Hillary may be irrelevant.
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Re: Protectionism

Post by ghariton » 08 Oct 2015 00:56

Jaunty wrote:
But, won't it be ratified (or turned down) in the US before next year's Presidential election?
My understanding is that the Senate has ninety days to decide.

Hillary's posturing is ostensibly intended to influence how Democratic Senators will vote. In reality, it's part of an attempt to fight off Bernie Sanders (the Democrats' answer to Donald Trump).

Talk about policies and platforms driven by polls. Does she have any integrity at all?

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Re: Protectionism

Post by ghariton » 08 Oct 2015 00:59

adrian2 wrote:
Hillary may be irrelevant.
Maybe we can trade politicians with the Americans, so as to inaugurate the TPP. We could send them Thomas Mulcair and Elizabeth May in exchange for... um... oh, never mind.

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Re: Protectionism

Post by bcjmmac » 08 Oct 2015 01:02

For s...s & grins, I read the forum at cbc.ca following Hillary's "announcement". Pretty funny (scary if you actually think 1/2 the posts are real) - maybe Mulcair has a chance!

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Re: Protectionism

Post by ghariton » 10 Oct 2015 19:47

Some details on the TPP provisions, and the winners and losers, albeit from a U.S. perspective. Still, it's more than Canadian sources have made public.

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Re: Protectionism

Post by brucecohen » 11 Oct 2015 11:08

Here's Canadian perspective on one TPP issue.
Canada has agreed to tough new rules surrounding internet piracy under the recently announced Trans-Pacific Partnership (TPP) agreement, and will also extend copyright terms by 20 years, documents released by Wikileaks show.

The TPP’s intellectual property chapter will extend Canada’s copyright terms from the life of the author plus 50 years to life of the author plus 70 years.

“As a result, works will be locked out of the public domain for decades at a cost to the public of hundreds of millions of dollars,” writes Michael Geist, the Canada Research Chair in Internet and e-Commerce Law at the University of Ottawa.

He points to a New Zealand government study estimating that extended copyright terms will cost residents of that country $55 million, spent on books, music and films that would otherwise have been in the public domain. New Zealand is one-ninth the size of Canada.

<snip>

The TPP also requires member states to “induce” internet providers to “remove or disable” access to websites that are accused of piracy.

Geist says the way the rule is written means the government would have to push to block websites even if no Canadian court has determined it’s engaged in piracy. Simply being aware of a court ruling anywhere would require Canada to push for the website to be blocked, without an assessment of whether it contravenes Canadian law.

Canada’s current copyright length of life plus 50 was the international standard for years, but recently countries have been moving to extend copyright. Activists in the U.S. have dubbed these extensions “Mickey Mouse laws” because they argue they have been put into place to allow Disney to keep its copyright on the 87-year-old cartoon character.

<snip>
Geist notes that New Zealand was able to carve out an exception for itself, delaying the implementation and making clear that works already in the public domain will not be retroactively put under copyright. “Canada, on the other hand, simply caved,” Geist wrote on his blog.

Canada also agreed to widen the range of copyright violations that are criminal, introducing a new criminal penalty for removal of digital locks on copyrighted content.

Geist notes Canada was able to retain its newly established and internationally lauded “notice and notice” system for non-commercial copyright violators.

Under the system, internet providers forward letters from copyright holders to customers who are accused of piracy. Copyright management companies say the rules have significantly decreased piracy in Canada, while avoiding costly lawsuits against small-time pirates.

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Re: Protectionism

Post by Insomniac » 11 Oct 2015 13:46

brucecohen wrote:Here's Canadian perspective on one TPP issue.
One industry that is already benefiting from the "notice and notice" system is the VPN providers. Perhaps the TPP will build their business.

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Re: Protectionism

Post by ghariton » 11 Oct 2015 13:57

Yes, IP provisions are the one area of the TPP that worries me. I think that U.S. law gives entirely too many rights to "authors" and extending this misguided law to other countries is undesirable.

On the other hand, I can't get too excited about extending copyright from author's life plus 50 to life plus 70. Apart from Walt Disney, I doubt anyone gets much in the way of royalty from works that are between 80 and 100 years old.

On the fight against piracy, we need to see the final text. (I'm told that the leak was not the final draft.)

If New Zealand did indeed carve out an exception and Canada did not, maybe that was the price we paid for protecting our supply management system. In fact, look to see other provisions harmful to Canada as part of that price.

I'm terribly disappointed in this government for not having taken the opportunity to start dismantling supply management. It makes a mockery of their stated principles of (a) relying more on market forces and (b) being on the side of consumers. But I suppose that in politics, opportunism overrides principle, for the Conservatives as for other parties.

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Re: Protectionism

Post by ghariton » 11 Oct 2015 14:42

Here is a three-page press release by the U.S. Trade Representative describing the Investor-State Dispute Settlement (ISDS) provisions of the TPP. It's not a substitute for the final text, of course, but I found it very helpful. I think it should be required reading for those worried about the ISDS, worries that are often based on falsehoods spread by the TPP's opponents.

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Re: Protectionism

Post by ghariton » 05 Nov 2015 17:12

Here is the text of the TPP, courtesy of the New Zealand government. I understand that there are also a number of side agreements. One, in particular, allows Canada to continue limiting exports of logs to Japan.

Limiting exports of logs to Japan, eh? Another win for Canada, I guess.

Anyway, a lot of people were complaining about the secrecy of the negotiating process and how they were being left in the dark and couldn't evaluate the deal. I expect them all to now read the entire thing before making further comments and criticisms.

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Re: Protectionism

Post by Insomniac » 05 Nov 2015 18:22

ghariton wrote: Limiting exports of logs to Japan, eh? Another win for Canada, I guess.
Seems like many people in BC would like to see a ban on raw log exports. We have mills that can cut the wood to the customer's specs.
I expect them all to now read the entire thing before making further comments and criticisms.
You're an optimist. :)

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Re: Protectionism

Post by AltaRed » 05 Nov 2015 19:48

Insomniac wrote:
ghariton wrote: Limiting exports of logs to Japan, eh? Another win for Canada, I guess.
Seems like many people in BC would like to see a ban on raw log exports. We have mills that can cut the wood to the customer's specs.
But at what cost? If we cannot compete with finished wood products with alternative suppliers, then we destroy all forestry jobs.

The same issue keeps coming up about refining our bitumen/oil in Canada versus the USA, aka the armchair quarterbacks and the naive NDP government of Alberta. We cannot do it and sell the products at a reaonable profit to get a return on investment. At least some companies are upgrading bitumen in Canada but those are pretty much limited to oil companies without access (ownership) in US refineries. Our manufacturing costs are too high, e.g. wages, payroll burden, energy, taxes.
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Re: Protectionism

Post by ghariton » 05 Nov 2015 22:18

AltaRed wrote:But at what cost?
:thumbsup: :thumbsup: :thumbsup:

Trade versus autarky. Autarky was tried in the 1930s. The resulting facts turned out to agree with the theory.

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Re: Protectionism

Post by Insomniac » 06 Nov 2015 00:30

AltaRed wrote:
Insomniac wrote:
ghariton wrote: Limiting exports of logs to Japan, eh? Another win for Canada, I guess.
Seems like many people in BC would like to see a ban on raw log exports. We have mills that can cut the wood to the customer's specs.
But at what cost? If we cannot compete with finished wood products with alternative suppliers, then we destroy all forestry jobs.

The same issue keeps coming up about refining our bitumen/oil in Canada versus the USA, aka the armchair quarterbacks and the naive NDP government of Alberta. We cannot do it and sell the products at a reaonable profit to get a return on investment. At least some companies are upgrading bitumen in Canada but those are pretty much limited to oil companies without access (ownership) in US refineries. Our manufacturing costs are too high, e.g. wages, payroll burden, energy, taxes.
Would it not depend on the market? If it's a buyer's market they could/would go to the cheapest source. In a seller's market, the buyer's may have to accept that they can only get the milled wood. Years ago I heard that the Japanese only wanted the best and were willing to pay for it.

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Re: Protectionism

Post by AltaRed » 06 Nov 2015 12:43

I agree it partly depends on the supply/demand situation but there ain't much of a seller's market with antiquated mills continuing to close over the past decade and no economics in building new mills. The sweet spot seems to be mid-life mills that have continued to innovate with technology. The best chance for survivors are those that can float their logs to tidewater (or near tidewater) mills and cut out long haul trucking.

I have no idea how our local mills continue to survive including Gorman's that have to truck logs in and finished product out. It has to be 'quality' that allows them to upsell as well as its large size (economies of scale). If that mill burned down, there would be no economics in re-building to compete with western US or Alaskan mills (for example).
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Re: Protectionism

Post by Insomniac » 06 Nov 2015 14:44

Yes, trucking is expensive. The loggers were here this spring taking down some trees in the neighbourhood. My neighbour had a tree that was about 6 feet in diameter at the base. The loggers cut it up into firewood. I asked the owner of the tree service why the log wasn't sold to a mill - it has to be valuable. He told me that the trucking costs were expensive and the best you could do is break even on it. Seem like a waste. :(

I think BC mills can compete with the American ones. Why else do the Americans continue the legal assault on our softwood lumber exports? (Especially after losing).

The raw logs are going to places like China and Korea where labour is cheap. We can't compete with cheap labour, but I don't think it will be cheap forever.

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Re: Protectionism

Post by AltaRed » 06 Nov 2015 15:05

Insomniac wrote:I think BC mills can compete with the American ones. Why else do the Americans continue the legal assault on our softwood lumber exports? (Especially after losing).
Probably so especially in the PNW (and US Northeast) where costs may be higher and labour unionized. Not the case in the lower Appalachians and more southern states where trees are more than likely 'farmed', grow faster and labour is likely high single digits/hour with minimum benefits. I've diven past some of those operations in states as varied as Georgia, West Virginia and Mississippi.
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Re: Protectionism

Post by ghariton » 19 Dec 2015 16:50

Speaking of supply management
Butter shortage forces Canada’s dairy commission to import 8.8-million pounds of butter as cream supply dries up
Of course, the whole point of supply management, and the very high prices that go with it, is to guarantee an adequate supply. But bureaucrats make mistakes, as we know. A free market would respond automatically -- farmers would produce more. But under a supply management system, there is no automatic stabilizer.

Remember this when some farmer tells you that supply management is essential if Canadians are to enjoy a secure supply of produced-in-Canada product.

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Re: Protectionism

Post by ghariton » 06 Jan 2016 01:30

Another marvelous photo op:
Trudeau sets sights on free-trade deal with China

Prime Minister Justin Trudeau intends to play an activist role in promoting Canadian business and investment with a major trade mission to China and India and a keynote address to the World Economic Forum in Switzerland.

It’s all part of a carefully laid-out economic strategy aimed at seeking new trade arrangements in a slumping global economy, with the long-range goal of achieving a pivotal free-trade deal with China.

Mr. Trudeau will first travel to Davos, Switzerland, to speak to the annual gathering of world leaders and wealthy executives on Jan. 21 at a special session entitled “A New Chapter for Canada.”

“It is a big economic opportunity,” said a senior government official, who was not authorized to speak on the record. “People who make the world’s biggest economic decisions will be in that room, and we plan on taking advantage of that to de-scribe our economic strategy, to talk up the country and opportunities for people to invest in it.”
Yes, yes, the World Economic Forum has become a place for celebrities to parade, not a venue for serious discussions. But imagine photos of Mr. Trudeau with all those great people. It will impress the hell out of the Canadian public.

Speaking of a free trade deal with China, and perhaps one with India. Of course, I celebrate all moves toward freer trade. But I wonder how the free trade deals we signed with the European Union and with the TPP are coming along. Those deals are actually signed, and awaiting ratification by the parties. They are not mere chimera on the horizon. So what's the government doing about the birds in hand, so to speak?

The silence is deafening.

Or perhaps China is now our new "best buddy" and we no longer care much about relations with the U.S. ... or with Europe. Except, of course, if there's a photo op. (Dinner at the White House, you say? Are the media also invited?)

Bottom line: This may be a good time to go short Canadian equities as a group.

George
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Re: Protectionism

Post by kcowan » 06 Jan 2016 06:17

Thanks George. I always appreciate your insightful comments. Yes China has been excluded so far. Maybe it is JTs inclusive nature to talk to them?
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Re: Protectionism

Post by Shakespeare » 06 Jan 2016 20:28

Since there is no point in doing anything on TPP until the US decides, trying to get a bilateral deal with China may be the best approach - and may give an actual deal faster. :roll:

(CETA still isn't an actual deal.)
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Re: Protectionism

Post by ghariton » 06 Jan 2016 23:57

Shakespeare wrote:Since there is no point in doing anything on TPP until the US decides
I recognize the difficulties with U.S. ratification. But even after an eventual U.S. ratification (if it happens), the Canadian government still has a ton of work here. The sooner started, the better. In fairness, the bureaucrats are hard at work, and at least one of my colleagues didn't get Christmas holidays. But the larger task, of communicating with the public, and especially special interest groups, has not yet started.

But over and above the domestic impact, Canadian support would strengthen the hand of pro-free-trade groups in other countries, maybe even in the U.S. I know that the U.S. doesn't normally listen to Canada, but I think that, on this one, Obama needs all the help he can get.
trying to get a bilateral deal with China may be the best approach
I see. Canadians who are fearful of getting their milk from the U.S. will acquiesce to getting their milk from China.

I know you were being fanciful in your comment, but I think that this is nothing more than a distraction. The acceptability of free trade with China to Canadians is not even epsilon, it's zero.

On the other hand, announcing opening of negotiations should provide some great photo ops. (Am I getting repetitive? Sorry.)

And if one were a cynic, one would see this announcement as a harbinger that the Liberals are about to pull the plug on TPP, and on CETA too. But not to worry, they will say, we have something much better on tap.

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Re: Protectionism

Post by Shakespeare » 07 Jan 2016 00:14

The acceptability of free trade with China to Canadians is not even epsilon, it's zero.
Why? It's acceptable to Australia. China–Australia Free Trade Agreement - Wikipedia, the free encyclopedia
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.
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