Protectionism

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Re: Protectionism

Postby Nemo2 » 31 Mar 2011 16:26

ghariton wrote:I have absolutely no expectation that either Layton or Duceppe would support any free trade deal.

Oh, I dunno, both of them seem to like 'free' stuff.
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Re: Protectionism

Postby newguy » 31 Mar 2011 16:46

How is free trade kept free? There is a meeting going on now about the dollar and what has to happen.

http://www.nytimes.com/2011/04/01/busin ... ?src=busln

As long as you want a trade surplus you must buy US dollars. Currency manipulation is the new protectionism. How is NAFTA going to work when the CAD is worth $2 US dollars?

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Re: Protectionism

Postby ghariton » 31 Mar 2011 20:39

newguy wrote: How is NAFTA going to work when the CAD is worth $2 US dollars?

Well, the U.S. should be very happy. After all, they are pushing China on revaluation of the yuan. As for Canada, exporters of scarce natural resources such as oil and gas should be ecstatic. As for the others, well, I did say that free trade deals with others, including the EU and India, are very important. We really, really have to diversify our exports.

Speaking of protectionism, I note that all Quebec leaders are apoplectic that Ottawa is going to guarantee some $4 billion in borrowing by Newfoundland and Nova Scotia to build underwater electricity transmission systems. Unfair!!!! they cry. We've been screwing Newfoundland for some forty years now on Hydro, and being able to bypass our grasping hands might let them fight back a wee bit. Unfair!!! We like our victims completely prone and at our mercy. Where's the rohypnol?

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Re: Protectionism

Postby newguy » 31 Mar 2011 21:13

ghariton wrote:
newguy wrote: How is NAFTA going to work when the CAD is worth $2 US dollars?

Well, the U.S. should be very happy. After all, they are pushing China on revaluation of the yuan. As for Canada, exporters of scarce natural resources such as oil and gas should be ecstatic. As for the others, well, I did say that free trade deals with others, including the EU and India, are very important. We really, really have to diversify our exports.

First of all the US won't be happy paying double for oil but they'll be happy there is no competition for anything else from Canada. If you ask me the forced devaluation seems to be the same thing as tariffs.

The underlined is sort of contradictory. If we're happy we shouldn't really have to do anything else. We're not happy because because everyone else in the world is in a rush to devalue their currency instead of going the smoot-hawley route. But there is still retaliation. I'm happy Canada has so far not played that game but that's because people need oil.

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Re: Protectionism

Postby ghariton » 31 Mar 2011 21:24

newguy wrote:
ghariton wrote:
newguy wrote: How is NAFTA going to work when the CAD is worth $2 US dollars?

Well, the U.S. should be very happy. After all, they are pushing China on revaluation of the yuan. As for Canada, exporters of scarce natural resources such as oil and gas should be ecstatic. As for the others, well, I did say that free trade deals with others, including the EU and India, are very important. We really, really have to diversify our exports.

First of all the US won't be happy paying double for oil but they'll be happy there is no competition for anything else from Canada. If you ask me the forced devaluation seems to be the same thing as tariffs.

Their politics work in ways that are mysterious to me. But they seem to prize jobs way above more general prosperity or a higher standard of living. If so, they will like a higher Canadian dollar that will mean more jobs for them (in most industries) but a lower standard of living for purchasers of gasoline. Meanwhile Alberta and Saskatchewan can live off their royalties, and so can the rest of us as long as Alberta continues to be suckered into funding equalization payments.

The underlined is sort of contradictory. If we're happy we shouldn't really have to do anything else.

No, no. The oil and gas industry, and those who feed off them, should be very happy. The rest of us have to take a chance that they will continue to share. but in case they stop, we better diversify. If everyone else devalues (relative to us) as well and diversification fails, why, we will be able to live very comfortably for a while, trading over-valued pieces of colored paper for real goods. Afterwards, we'll see.

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Re: Protectionism

Postby ghariton » 15 Apr 2011 01:14

John Manley on free trade with the EU:

Today, one out of every five Canadian workers owes his or her job to international trade. Given this history and record, it is only natural that we would want to enhance our trading advantage by reaching out to a wider circle of economic partners, including the European Union (EU).

Negotiators for Canada and the EU have been holding talks, with the most recent round taking place this week in our nation's capital, aimed at forging a Comprehensive Economic and Trade Agreement (CETA). If the talks succeed, Canada would become the only country in the world to have signed a comprehensive trade deal with both the United States and the 27-nation EU. NAFTA and CETA combined would provide our relatively small economy of 33 million people with privileged access to a market of almost 1 billion consumers.

According to the federal government, a trade deal with Europe has the potential to give "a $12-billion boost to the Canadian economy and increase bilateral trade by over 20%."

With these kinds of benefits on the table, political leaders at both the federal and provincial levels ought to be making CETA a "must do" in their policy platforms.

Uh-huh. The silence is deafening.

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Re: Protectionism

Postby Shakespeare » 15 Apr 2011 08:04

Uh-huh. The silence is deafening.


Not always:

Harper reaffirms Conservative support of dairy, egg and poultry cartels

Remind me again where CPC support lies - is it rural or urban? I forget..... :wink:
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Re: Protectionism

Postby AltaRed » 15 Apr 2011 11:40

In all fairness, domestic agriculture is protected by almost every nation. I read once that part of this is a hangover from a long gone agrarian society.
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Re: Protectionism

Postby Shakespeare » 15 Apr 2011 11:48

There are a couple of reasons IIRC. One is strategic: a domestic food supply is vital in war - see, for example, the "Victory Gardens" WWII.

But the other is more cynical: in the Western democracies, a farm vote is almost always worth more than a city vote. So the political parties pander to rural voters.

(All political parties are guilty of this.)
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Re: Protectionism

Postby ghariton » 15 Apr 2011 13:51

Shakespeare wrote:One is strategic: a domestic food supply is vital in war

Indeed. But our present marketing boards act to restrict output and so our farmers produce less than they would want. I'm not sure how that contributes to "security". Perhaps blocking imports and protecting our domestic industry could be thought of as contributing to security. But in a country that produces so much that it has trouble exporting it all, this is absurd. The foreign import restrictions are there purely to create domestic scarcity.

(Not that scarcity is necessarily bad, what with obesity and all. But price gouging is not the way to do it, in my opinion.)

But the other is more cynical: in the Western democracies, a farm vote is almost always worth more than a city vote. So the political parties pander to rural voters.


Yes.

It doesn't help that many Canadians have a romanticized version of the family farm, with all the bucolic virtues. They don't know, or in some cases prefer not to know, that the bulk of the profit from price gouging goes to large agribusinesses that look nothing like their idealized pastel-pink mental images.
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Re: Protectionism

Postby Shine » 15 Apr 2011 21:57

AR wrote:
In all fairness, domestic agriculture is protected by almost every nation.


Is the colour of margarine protected in those nations as well? :wink:
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Re: Protectionism

Postby newguy » 16 Apr 2011 09:52

Shine wrote:
AR wrote:
In all fairness, domestic agriculture is protected by almost every nation.


Is the colour of margarine protected in those nations as well? :wink:

It's not protected here anymore but by now the yellow stuff just looks gross, I can't eat it.

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Re: Protectionism

Postby ghariton » 17 Aug 2011 02:56

Mark Kennedy:

Canada’s economic future hinges on the success of international trade deals, and “protectionists” such as the federal NDP are spreading discredited “conspiracy theories” and “myths” that should be rejected, says a senior cabinet minister in the federal government.

The message was delivered Tuesday in a major speech in Toronto by International Trade Minister Ed Fast. In the keynote address to the Economic Club of Canada, Mr. Fast outlined how the Conservative government is pursuing free-trade deals around the globe — from Latin America, to the European Union and India — as a priority.

Within minutes, the NDP’s reaction was just as firm. A party spokesman accused Mr. Fast of engaging in “rhetoric and hyperbole” in his unfounded political attacks against the official Opposition, and said the Conservative government is pushing ahead with trade deals without adequately considering their effects on human rights in other nations.

The comments served to illustrate the sharp contrast between the government and NDP on the issue.

<snip>

Critics such as the NDP have complained the trade deals do little to protect workers’ rights in countries where there is a long record of human-rights abuses.

“It’s important that we go forward as a country with our eyes open as we engage with other countries, not with blinders on,”said NDP MP Robert Chisholm.

“We’re saying trade, done right, is good That we can move forward and deal with other countries, but we need to walk on this planet with some integrity as a country. There are very serious problems in engaging with countries like this. We have a moral obligation to do things in a way that will protect workers, that will take into consideration the environment and human rights.”

When I spend some time around the protectionists, I get a whiff of xenophobia.

We don't want to do business with people who aren't up to our ethical standards, or [whisper]our colour[/whisper]. Why, those people will work for free, almost [whisper] no self respect -- not like us[/whisper],

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Re: Protectionism

Postby gyrfalcon » 17 Aug 2011 07:06

ghariton wrote:
We don't want to do business with people who aren't up to our ethical standards, or [whisper]our colour[/whisper]. Why, those people will work for free, almost [whisper] no self respect -- not like us[/whisper],

George


Finally, I understand what "protectionists" are really concerned about.
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Re: Protectionism

Postby ghariton » 22 Nov 2011 04:32

Ottawa Citizen:

If the Harper government were truly devoted to free markets and smaller government, supply management in Canadian dairy would be dead, dead, dead.

That this anachronistic, bloated, unfair and regressive system is still very secure indeed - even with the Conservatives in a majority, just five Quebec MPs in the Tory caucus and Canada entering trans-Pacific free trade talks - aptly illustrates the occasional weirdness of democracy in a federation.

Intellectually, Conservatives should kill supply management. Practically they'll fight to the death to protect it. The reason is entrenched money, which translates into votes - in Quebec, but more importantly in Ontario. Dairy marketing boards were established in the 1970s. Their effect is that the milk you drink and the cheese you eat is produced under state control, without competition, and costs you twice what it should, entirely for the benefit of 13,000 farmers. Sadly, the marketing boards are likely here to stay, for this term of government and the next, too. To hope otherwise is wishful thinking.

R<snip>

The mythology of the family farm endures still - but mainly in cities and in storybooks featuring suspender-clad, kindly granddads driving little red tractors among happily clucking hens. The reality could not be more different. The few farmers who make serious money cultivate thousands of acres, with equipment worth millions. Any dairy farmer milking more than 40 head is a millionaire, just based on the value of his quota, worth about $25,000 per head. The average dairy farmer in Canada in 2009 kept 73 cows. The most profitable farms keep hundreds of cows.

<snip>

n theory this should have beef and grain farmers all aboil - especially since the closed border in dairy is the single greatest obstacle to boosting sales of their own product abroad.

Indeed, whenever Canada presses for lower farm tariffs overseas, we're told: Cast the beam from thine own eye, hypocrite. The end of the Canadian Wheat Board monopoly will only bring this into starker relief, as western grain growers seek new markets. In practice though, grain and beef farmers have been an acquiescent lot. Or perhaps, because they tend to make so much more money than the rest, dairy farmers just have a louder voice.

<snip>

The problem: 75 House of Commons seats in Quebec and 106 in Ontario, out of 308 total, under the current formula. Quebec, of course, will oppose any reform. You might expect, with minimal Quebec seats in the current government, that this wouldn't pose too big an obstacle. The core difficulty is Ontario, which holds 31.4 per cent of the national dairy quota. Rural Ontario is critical to the new Conservative Anglo-Canadian coalition. The Tories have shown they can win a majority without Quebec. But they absolutely cannot consolidate their new coalition in 2015, without rural Ontario. Such a consolidation requires continued backing from the province's dairy farmers, who wield political influence disproportionate to their number.

Here's what it must mean: Canada has quietly asked for and been granted a pass, at the Trans-Pacific Partnership. Our dairy market is on the table officially, but unofficially, not. The Americans know this, and are OK with it: Otherwise we wouldn't be joining the talks.

It's unfair, to any farmer who isn't a protege of the state. It's entirely at odds with Conservative party principles. It's rotten economic policy. And yes, it is democracy.

Just Friday night at a consumer advocacy meeting, I heard the chief economist of the Canadian Centre for Policy Alternatives, Armine Yalnizian, wax indignant that the Conservatives might have a secret agenda to dismantle supply management boards and how terrible that would be.

Why is the left so economically illiterate? (It turns out that the right is just as economically illiterate, but I would have expected better from the left.)

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Re: Protectionism

Postby AltaRed » 22 Nov 2011 14:33

I have seethed over supply management boards forever since as a consumer I pay dearly for it. The Americans are letting Canada get a free pass because they do the same, albeit primarily via subsidies these days. I have not looked at US practices for some time but there was a time the Feds bought surplus product, a form of price support. The romantic notion of the family farm is primarily a symptom of our agragrian past. Few remaining 'true' family farms are self-supporting, i.e. one or more of the family members have non-farm jobs.
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Re: Protectionism

Postby Shakespeare » 12 Apr 2012 12:12

Just to show that I don't always criticize the Conservative government, this, if true, is finally a good move:

Supply management on table as Harper touts trade at Americas summit - The Globe and Mail
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Re: Protectionism

Postby AltaRed » 12 Apr 2012 16:13

If we could only be so lucky! That has been one of the biggest burrs under my saddle for as long as I can remember. Either be a big corporate farmer to compete with American giants or go home. Gouging the consumer is not one of them.
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Re: Protectionism

Postby ghariton » 12 Aug 2012 21:44

Michael Hart thinks Canada should unilaterally eliminate tariffs on all imports and eliminate all other trade barriers:

Canada should not wait for a hypothetical “payoff” from negotiations with other countries, but instead proceed in its own interest to remove home-grown impediments to trade. The author identifies disruptive anti-dumping and countervailing duty regimes, ineffective subsidies and procurement preferences, tariff restrictions in supply-managed sectors, overabundant regulations and many remaining restrictions on foreign ownership, as areas where less trade-restrictive measures should prevail. Such reforms would generate cost savings for the government, and leave the economy more competitive and with a stronger tax base.

These reforms would leave Canada free to focus on easing passage for secure trade and people at the vital Canada-US border, and on aligning its regulations with the United States and other major trading partners in areas where duplication does not make sense. Beyond the United States, Canada should better use its diplomatic resources by proceeding with trade negotiations only on the basis of “clear business support, extensive consultations, and a clearly articulated rationale.”

I strongly agree.

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Re: Protectionism

Postby newguy » 15 Aug 2012 15:11

ghariton wrote:I strongly agree.

I coulda used your help back here.
viewtopic.php?p=331256#p331256

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Re: Protectionism

Postby ghariton » 15 Aug 2012 17:34

newguy wrote:
ghariton wrote:I strongly agree.

I coulda used your help back here.
viewtopic.php?p=331256#p331256

newguy

Sorry.

George
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Re: Protectionism

Postby zinfit » 23 Aug 2012 23:05

Canadian dairy producers are a small yet powerful group. They have intimidated politicians of all stripes. This is very much the case in Quebec and Ontario. The only thing missing with these people is Jimmie Hoffa.
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Re: Protectionism

Postby newguy » 24 Aug 2012 09:47

zinfit wrote:Canadian dairy producers are a small yet powerful group. They have intimidated politicians of all stripes. This is very much the case in Quebec and Ontario. The only thing missing with these people is Jimmie Hoffa.

It seems like B.C. must be overcharging for milk as well.



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Re: Protectionism

Postby Shakespeare » 09 Oct 2012 21:17

Getting rid of supply management won’t be easy
The economic rents generated by the program were initially given to producers based on historical output. (A tremendous unearned windfall but one that pales by comparison with other giveaways, such as the broadcast spectrum.) Over the years, these rents have been capitalized in the value of quota (which some have estimated at over $30,000 per cow) and those in turn were built into the value of dairy operations. As the original owners sold their farms, to outsiders or to their offspring, the purchasers were, in effect, buying the milk quota with the farmhouse and buildings thrown in. The result was to entrench the quota system deeply into the economic fabric of whole regions of the country, notably Quebec and eastern Ontario.....

It is an old maxim of trade negotiators that much can be achieved through the two basic principles of 1) a sufficiently gradual transition; and 2) “grandfathering” or the protection or full compensation of the rights of those affected.

It is not impossible ultimately to eliminate supply management of dairy products through a very careful program that follows these principles, but it will be very costly, in fiscal terms and above all in political terms. We are a long way from the goal.
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Re: Protectionism

Postby ghariton » 25 Nov 2012 02:40

From the "government is not my friend" saga:

Yes, this country regulates the size of food packages. Let’s just get that out of the way. It appears that when the government was busy deregulating everything from airlines to telecommunications networks, it forgot that it still controls the size of ketchup bottles.

That’s right, the size of standard grocery-store items such as baby food, sandwich meat, honey, maple syrup, as well as most frozen and canned fruits and vegetables are all controlled by the government, and CFIA resources are used to ensure compliance. So, for example, selling honey in a 750 g or 1 kg jar is perfectly fine. But if you want to buy 800 g of honey, well, that’s against the law.

The containers used to ship many fruits and vegetables are also controlled. They “may not be marketed in import or interprovincial trade in containers exceeding 50 kg.” Except for apples. There’s absolutely no problem shipping a 200 kg container of apples. Carrots are another matter entirely.

Until Thursday, it appeared as though the government was going to get rid of this draconian set of regulations. At least, that’s what was promised in the 2012 budget. But now it appears to have backtracked.

So why would anyone be against freeing this country’s honey jars and ketchup bottles?

<snip>

Many producers are worried that if the standardized container sizes no longer existed, American companies would begin packaging products destined for the Canadian market in the United States, substituting local inputs for foreign ones. The fact of the matter, however, is that no one would be forced to change the size of their containers. What it would do is allow foreign producers to compete on a level playing field.

This would be good for consumers, as we would enjoy a greater selection of products at cheaper prices. But it would be bad for a handful of domestic producers that don’t want to have to compete against foreign companies. And they are the ones who have been fighting to keep the regulations in place.

If the Harper government is serious about pursuing a free-trade agenda, it needs to get serious about, not only negotiating new trade agreements, but also reducing trade barriers here at home, including our system of supply management and standardized container sizes for food.

It will always be the case that protectionist policies will help a few domestic firms, but the government should not be in the business of doing favours for businesses, when they come at the expense of everyone else.

Alas, it is in the nature of governments to be purchased by, or otherwise beholden to, narrow special interests. And the ordinary Canadian doesn't give a damn.

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