U.S. vs China: Protectionism

[lessthaniv]

Folks, I'm seeking your opinions on how you're currently viewing the disputes between China/US on currency pegging.

 

China has said they have no intent of allowing their currency to rise quickly against the U.S. dollar. The U.S. obviously wants the renminbi to appreciate against the U.S. dollar. Some economist opinions that I've read suggest it's about 40% undervalued thereby giving China an unfair advantage in regards to International trade. I personally don't expect the Chinese government to flinch but will the U.S. lawmakers follow through on the new laws to impose import duties on Chinese goods, effectively offsetting the perceived trade advantage? At the beginning of March the IMF commented on the Chinese currency saying it was substantially undervalued. As the numbers of unemployed grow, the pressure to act seemingly increases.

 

I'm not so sure that this move would assist the U.S. on the short term, though? After all, manufacturing jobs in China cannot be easily replaced in the U.S. on the short term.

 

With China owning $900 Billion of U.S. government bonds, you'd expect the two sides to come to some mutually acceptable agreement.

 

Still another way of rectifying the trade imbalance is for the U.S. to increase their exports to China. However, a common opinion seems to have developed criticizing the Chinese government of protectionism.

 

I have to admit - I am motivated to ask this question as I have holdings in Seaspan. Depending on the final outcome, this could materially assist/hinder their business. I'm asking this question however to solicit all opinions as many holdings of the board might be affected in a similar fashion.

 

Any thoughts?

[Myth465]

You cant have free trade without fair trade. If the currency is pegged to keep it unusually low how is that free trade?

 

China has what amounts to a 40% government subsidy towards exports. It doesn't hurt the US, but hurts Germany, Japan, and other Asian exporters per historian Neil Ferguson. We benefit in the short term if they are financing our debt, but this debt financing probably hurts in the long term.

 

I would put sanctions on China - not in the interest of American manufacturing jobs, but in the interest of trade fairness. Our manufacturing will go if it is labor intensive. We will keep high tech stuff that has patent risks and items which are too heavy to warrant shipping but everything else will likely go elsewhere.

 

Also Protectionism is such a silly word. The US has basically exported its wealth, jobs, and a considerable part of its middle class promoting free trade. What China is doing is basically undermining free trade with this unfair but effective peg. They are a richer country, their currency needs to raise, and other poorer countries need to have a shot at exploiting their cheap labor costs.

 

----

 

Finally me owning you a significant sum of money is more of a problem for you and not so much for me. Especially when I can print the money on my computer and give it to you.

[SharperDingaan]

 

Revaluing or imposing a border tariff achieve the same result, but have very different optics.

 

Can you really see the US government almost instantly raising the sale price on the goods sold at WallMart (which are primarily imported) because they suddenly put a tariff on them? And when those most reliant on those low prices, are the populations in the S & SE who've just lost the Health Care debate?

 

China slowed its roll-overs this week, & the T-Bill market almost went no-bid.

 

If you want to trade; then learn some cultural manners.

Employing a little 'face' could go a long way!

 

SD

     

[abyli]

How do we know that RMB is 40% undervalued?

[txlaw]

I think it's unlikely that the US will take extreme measures and label China a currency manipulator, institute tariffs, or file a WTO suit.  I believe the rhetoric is intended to put pressure on China to resume revaluing the renminbi -- I don't think the US will follow through in a way that leads to tariffs or sanctions or what not.

 

China clearly has to let the RMB appreciate relative to the USD, but the real question is how incremental this should be.  The Chinese government cannot just let the renminbi appreciate rapidly because that would cause a shock to their export sector, which is currently sustained off the backs of other exporting nations, both developed and undeveloped.  If you believe that people like Edward Chancellor are right about a China bubble (and I do), then the Chinese economy is in a precarious state right now.  Whereas before their stimulus program, they might have only gone into a normal recession, they could potentially be in a state where they could enter a debt-deflationary spiral if their asset bubble bursts.  Of course, it's unclear to me exactly what happens if their bubble bursts because the banks are arms of the state and might not suffer as much as banks in a private sector system.

 

Still, if the bubble bursts, who knows what the political outcome could be?  If migrant workers are thrown out of factories and things get hairy in the big cities, you could have a lot of social unrest.  Those Chinese who have shoveled their money into the stock market or property market could be wiped out in a way that causes them to question whether the pursuit of wealth is really the only thing they should be concerned about when it comes to government policy. 

 

Since stability is a cornerstone of Chinese government policy, I'm pretty sure that they won't just let the renminbi appreciate willy nilly.  And I'm pretty sure responsible policymakers in the US get that (maybe not certain Congressmen, though).  But now that things are starting to get a little bit better globally, the Chinese have to once again start letting the currency appreciate -- slowly.

 

[Myth465]

Tx thats a very astute analysis

[lessthaniv]

How do we know that RMB is 40% undervalued?

 

abyli,

 

We don't!

As I stated, that number was pulled from some readings that I've done.

I think most would agree that the renminbi is undervalued but the 40% number is a guess from economists.

 

txlaw,

 

You've echoed the way I'm thinking about this in your comments and I was hoping my thoughts would be reinforced by others. Thx.

[Myth465]

Very good article in the Economist It appears that Nixon faced similar decisions and also choose tariffs

 

The number of congressmen signed on is also interesting.

Nixon is not usually a source of inspiration for left-leaning pundits such as Paul Krugman of the New York Times. But like 130 congressmen, who this month signed a letter to Timothy Geithner, America’s treasury secretary, he is calling on the White House to emulate Nixon and impose a “surcharge” on imports from China. The tariff is supposed to force China to strengthen its currency, the yuan, against the dollar, just as Nixon’s surcharge prompted America’s trading partners to renegotiate their exchange rates four months later.

 

http://www.economist.com/business-finance/economics-focus/displaystory.cfm?story_id=15770808

[Myth465]

Interesting video and article.

 

Neil Ferguson's part is very interesting.

 

http://www.cnn.com/2010/WORLD/asiapcf/04/04/us.china.treasury/?hpt=Sbin

 

[Myth465]

Here is a very good counter article by Stiglitz.

 

The US Treasury has been charged by Congress to assess whether China is a “currency manipulator.” ...[T]he very concept of “currency manipulation” itself is flawed: all governments take actions that directly or indirectly affect the exchange rate. Reckless budget deficits can lead to a weak currency; so can low interest rates. Until the recent crisis in Greece, the US benefited from a weak dollar/euro exchange rate. Should Europeans have accused the US of “manipulating” the exchange rate to expand exports at its expense?

 

http://economistsview.typepad.com/economistsview/2010/04/stiglitz-no-time-for-a-trade-war.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29&utm_content=Google+Reader

[Cigarbutt]

Thought I would bump this old thread as the issue is still relevant.

 

Have done some reading lately on factors leading up to, and on potential solutions for, the US-Canada lumber dispute.

 

I thought the following (recent) link was useful and perhaps brought useful elements about protectionism and the present dilemma with China.

 

https://assets.realclear.com/files/2017/08/662_pa819.pdf

 

Personal comments:

 

(My opinion is that free trade is a globally and net positive policy.)

(The Cato institute cannot be considered completely objective, independent thinking required)

 

-The link provided an interesting analysis of the effects of tariffs on Harley Davidson, a company I have followed for a long time (as an investor).

-The link also includes an overview of the direct and second order effects of tariffs on the steel industry in the early 2000's.

 

Disclosure: I respect and even admire Wilbur Ross as an investor. He clearly accomplished a badly needed restructuring of the steel sector and the fact that he benefitted greatly from tariffs does not change that conclusion. However, my opinion is that, overall, protectionist measures result in a negative outcome for the society as a whole.

 

Perhaps something to consider when redefining bilateral agreements with Canada, Mexico and China.

 

Free trade and protectionism are macro concepts but may have implications for some of our investment targets.

 

[rukawa]

If the Chinese want to work for nothing ... I say let them. That's all currency manipulation really is. The Chinese essentially said:

 

"Look we are going to work our asses off for you for 30 years in sweat shops and we expect very little in return"

 

Essentially this is the story of the rise of nearly every single economic power or group. You rise up by giving much more than your getting. Immigrants do in when they come to the US, black people did it after slavery, the Chinese and Indians are doing all over the globe.

 

Getting mad at someone because they want to get ahead ... its mean and petty and weak.

[HJ]

One can't treat the US and China as two monolithic aggregated blocks when trying to analyze the effect of trade.  It's helpful to certain part of US economy, like the software engineers at Apple, or the consumers who are buying cheaper goods, but harmful to other parts of US, like the manufacturing economy of the midwest.  Likewise, it's helpful to certain parts of Chinese economy, like those in the government who controls finance and banking, and can use these reserve to cover up mal-investments that they've directed elsewhere, or those who were able to tap the reserves cheaply through the financial system, like HNA and until recently, Anbang and Wanda, but harmful to others like the factory workers at Foxconn.  While the economist may argue at an aggregate level the world is better off with free trade, the people who are asked to bear the cost of such free trade clearly disagree, and will overtime gain a political voice against it.  The political system, certainly in the US, is being asked to deal with this discontent sooner than the one in China. 

 

What the Chinese government ought to understand is that it's to their own benefit to help the US government deal with the resentment to free trade, maybe revalue some or balance the trade through other means somewhat to relieve the political pressure to their US counterparts.  Otherwise the mercantilistic policies will break the current system which they've largely benefitted from.  As with a lot of things in economics, the problems morph into a political one, and will be resolved, one way or another, at the whims of politicians rather than by some economic professor pontificating on the laws of comparative advantage.

[Cigarbutt]

"...the US government deal with the resentment to free trade".

Perhaps many options here.

 

I like to think that best government policies are based on an net NPV type of philosophy, articulated on a clear vision combined with ways to mitigate transition effects.

Isn't this what you expect of your favorite CEO when you invest in a company?

 

"As with a lot of things in economics, the problems morph into a political one, and will be resolved, one way or another, at the whims of politicians rather than by some economic professor pontificating on the laws of comparative advantage."

 

I agree but do you think that politicians have done this relatively well in the last decades and do you think that it is reasonable to suggest that global living standards (in advanced AND emerging economies) have improved substantially because of free trade?

 

https://ourworldindata.org/international-trade

 

Fair to say that we have to make sure we agree on destination before we discuss the mode of transportation or the itinerary.

 

[DTEJD1997]

"...the US government deal with the resentment to free trade".

Perhaps many options here.

 

I like to think that best government policies are based on an net NPV type of philosophy, articulated on a clear vision combined with ways to mitigate transition effects.

Isn't this what you expect of your favorite CEO when you invest in a company?

 

"As with a lot of things in economics, the problems morph into a political one, and will be resolved, one way or another, at the whims of politicians rather than by some economic professor pontificating on the laws of comparative advantage."

 

I agree but do you think that politicians have done this relatively well in the last decades and do you think that it is reasonable to suggest that global living standards (in advanced AND emerging economies) have improved substantially because of free trade?

 

https://ourworldindata.org/international-trade

 

Fair to say that we have to make sure we agree on destination before we discuss the mode of transportation or the itinerary.

 

I would have to disagree that the politicians (in the USA) have done a reasonably good job of handling the trade situation.

 

Witness the election of Donald Trump in the USA. 

 

Part of his message/appeal is that the USA has done terribly in the trade deals and he is going to try and rework them.  You can NOT believe the support he has in the Midwest of the USA.  I know for a fact that there is a good chunk of Union members that traditionally vote Democrat, broke ranks and voted for him.  Some of these guys are also alienated from the Democrat's policy of moving from the working class to "identity politics". 

 

Another example is that it is VERY expensive difficult to export cars to S. Korea, Thailand, and other Asian countries who the USA does a great of business with.  If the USA is taking finished autos & auto parts, should it not be relatively easy to send cars to these countries?

 

I've worked in the electronics field for many years...and it is a similar situation there...though not as bad as it is with autos.

 

The midwest has simply been decimated in terms of jobs.  It is a very complicated situation as to how it has happened...but a lot of people here think the USA has gotten the short end of the stick in trade deals.

[John Hjorth]

<Off topic>

 

Here, I just want to express my appreciation to your - to me - allways well thought out - bordering to being philosophical - posts, Cigarbutt.

 

Thank you, and please keep them coming.

 

</Off topic>

[HJ]

"...the US government deal with the resentment to free trade".

Perhaps many options here.

 

I like to think that best government policies are based on an net NPV type of philosophy, articulated on a clear vision combined with ways to mitigate transition effects.

Isn't this what you expect of your favorite CEO when you invest in a company?

 

"As with a lot of things in economics, the problems morph into a political one, and will be resolved, one way or another, at the whims of politicians rather than by some economic professor pontificating on the laws of comparative advantage."

 

I agree but do you think that politicians have done this relatively well in the last decades and do you think that it is reasonable to suggest that global living standards (in advanced AND emerging economies) have improved substantially because of free trade?

 

https://ourworldindata.org/international-trade

 

Fair to say that we have to make sure we agree on destination before we discuss the mode of transportation or the itinerary.

 

Once again, the NPV maybe at an aggregate level positive, but one constituency gains while another loses.  How does the economist propose that the government balance this?  I think it's pretty clear after the past 30+years that the industries of the coasts, finance, software, benefitted from free trade while the middle suffered, incidentally coincided with the electoral map in 2016.  Other than some empty "jobs retraining" programs", what else can the government do?  Cause those are band aids, and far from compensating for the distortion that its trade policies created.  Essentially US government says to the world you can come in to take our industrial manufacturing jobs as long as you let Apple sell their products in your country without taxes.  Oh by the way, Apple manages its own affair so that it doesn't pay much of taxes at all anywhere in the world. 

 

In the real world, the government is asking one constituency to be the payer in this NPV analysis while a different constituency reap the gains with no effective way to redistribute the overall gains.  Economist can argue trade is good.  To the group that's being asked to pay, it's Ivory Tower speak.  The world simply hasn't worked this way. 

 

 

[Cigarbutt]

Glad that you appreciate John Hjorth, especially coming from somebody I perceive as one of the wise voices on this Board. “Keep them hungry and they will keep coming back”.

 

Many valid points raised.

 

Sorry, long post.

 

3 assumptions here

 

1-Politics is messy (perhaps especially American politics)

2-Free trade is the way to go

3-A segment of the American population is suffering through relative economic hardship.

 

Obviously, political bickering over tariffs is not new. Wasn’t one of the triggers for the American Revolution the backlash against the tariffs and the mercantilist doctrine of the mother country, “no taxation without representation”? I recently visited a house where John A. MacDonald (our first prime minister, equivalent to your George Washington, in a way) lived for a while. Let me tell you that protective tariffs were high on the agenda and could mean victory or defeat at election time. In fact, it was a decisive factor that helped him and his Conservative Party win the 1878 election against the Liberals, who were in favor of free trade. This “protectionist” platform lasted several decades.

 

Comments about President Trump being able to skillfully gather support are very relevant. But his victory may have something to do with other factors as well: weak opponent, union disaffection (many reasons for that) and many others. However, this time, as correctly mentioned, disgruntled voters, who felt that the trade deals were unfair, made the difference.

 

The political wave now goes towards a protectionist attitude and various drifts are possible but I submit that, eventually, our institutions will take us back to its long term trend towards more liberalized trade. The USA may be the champion of political expediency and pork barreling but, somehow, its foundation allows adaptation and change. The US has not become the richest nation in the world by chance. The political system is messy but it works. Admittedly, to watch the process can be (extremely) painful.

 

Looking back, as the 20th century progressed, despite a non-linear and sometimes contentious process (World Wars, Great depression with the Smoot-Hawley episode and others), I submit that institutions in advanced economies allowed for a progressive decrease of protectionist policies and that was a major factor behind the global improvement in living standards. This is clear in the aggregate and I submit that the USA, as a country, has greatly benefitted from free trade.

 

https://www.winton.com/longer-view/us-protectionism-in-four-charts

 

In the last 25 years, world trade volume has increased more than fivefold. No wonder, adjustments need to be made. Why would one consider going back? Please explain.

 

I remember a lot of controversial discussions when the free trade agreement between the US and Canada was signed in 1992. I remember Ross Perot’s “giant sucking sound” argument. There were and there are still “issues” and obviously improvements and transition measures can be considered but my opinion is that the deal has been mutually beneficial for both countries. I think that a similar conclusion applies to Mexico and China. If you believe in the benefits free trade (that’s the underlying basic question), adjustments and improvements of the mechanisms to deal with disagreements should be sought for, not nullification of the entire deal.

 

When you consider Mexico and China, a problem is clearly related to a major wage arbitrage that has occurred. Despite mutual benefits overall, segments of USA population have borne the brunt. This new Grapes of Wrath segment is identifiable, relatively concentrated in certain states and members of that segment have not been able to find equivalent jobs. That is the problem. This situation has been worsened by robotization (see recent post on tech replace jobs) and other factors that have nothing to do with free trade. Also, this segment does not “see” the gains that they had but clearly feel the disarray associated with job loss and difficulty to find an alternative. I submit that major and unilateral changes to international agreements may not achieve what is expected for this segment of the population and protectionist side effects may kick in.

 

If you agree that free trade has been and will continue to be beneficial, this debate reminds me of the technology debate that displaces and perhaps even eliminates (on a net basis) jobs. Does that mean that we have to abandon technology, innovations and the implicit “progress” associated?

 

So what to do? To deal with the Luddites, the British government used the army. Proponents of a “strong” government would propose “transition” measures. In one of his annual reports, Mr. Buffett suggested that the USA should do a better job with this transition. I don’t know about the way to achieve this. All I know is that going protectionist in order to try to “satisfy” a segment of the population will be a lose-lose proposition.

 

Concerning the trade with China (main topic of this post), trade statistics are revealing.

 

https://fas.org/sgp/crs/row/RL33536.pdf

 

Even if there has been some questioning in the last years, free trade has provided tremendous advantages to both countries. The notions of intellectual property theft, persistent large trade imbalance and the considered unfair trade practices should continue to be part of ongoing discussions.

 

Obviously the context is dynamic and “black swan” events can happen (interesting to remember that China has replaced Japan as the poster child of the cheap exporter, champion of unfair trade practices and currency manipulator) but I would venture to say that a relative stability/balance has been achieved in terms of trade between China and the USA. The geo-political relation between the two super-powers has remained relatively good and, so far, the Thucydides trap has been avoided largely, I think, because of the growing economic ties. Trade has become a force for stability and this should be remembered after going through a century devastated by two World Wars. Sometimes you have to be careful about what you wish for. With growth rates coming down, an aging population and many other challenges, China may also consider adjustments. Their central government may act differently than our Western ideology would suggest. I submit that an unbalanced and indelicate approach may cause China to turn inward. Aggressive outside pressures may cause China to become even more centralized as it may have to safeguard its political legitimacy. Handle with care.

 

In the last few years, globally, the growth of world trade has slowed down and that may be due to decreasing domestic political support for such agreements. My opinion is that this trend should be reversed.

 

Maybe, the recent rhetoric is just about simply negotiating better deals (maybe needed, for instance, concerning the specific examples mentioned in DTEJD1997 post). However, if this is about a Smoot-Hailey type strategy, I submit that this is a wrong turn. An obvious option for the counterparty is retaliation…We’ve seen the movie before.

 

Historically, in terms of foreign policy, the US has alternatively used a flexible approach related to the classic guns versus butter tension (home versus abroad focus). Interestingly, now the guns and butter approach seem to be combined. Food for thought.

 

Some may feel that this a peripheral issue but perhaps helpful to remember that investors have enjoyed abnormal returns in certain firms that profited from globalization and to keep in mind that, historically, the protectionist predicament has typically hurt animal spirits and expectations.

 

 

[DTEJD1997]

I think most people would agree that free trade is good.

 

HOWEVER, I can think of three MAJOR example right off the top of my head of ANYTHING but free trade...

 

Coming back from the gym, I was listening to Michigan NPR...Something I try to do less & less, but the announcer was wailing that if President Trump rescinds the Korea free trade deal, a lot of Michigan won't be able to sell their cheese into Korea....and what a catastrophe that would be for Michigan jobs. 

 

That very well may be...I do not know a SINGLE dairy farmer, OR anybody connected to it.  Conversely, I know several people who work in auto plants/management for the big 3.  I know many others that work at auto parts suppliers...It is cost prohibitive to bring a car manufactured/assembled in the USA to Korea...not impossible, just so expensive as to not make it worth while.  We get plenty of Korean autos, and I buy LOTS of SSD drives and computer memory manufactured in Korea (Samsung).  Why won't Korea let us sell them cars on a reasonable playing field?  How much cheese does it take to equal the value of 1 auto/truck?

 

Same thing for Thailand.  I had a friend who wanted to bring Corvettes/Cadillac CTS-V's to Thailand.  It was relatively simple arranging the freight...slightly more burdensome filling out all the paperwork...almost impossible to overcome the 200% tariff on auto imports.  Thailand sends the USA plenty of Seagate hard drives....why can't America sell autos to Thailand with little or no tariffs? 

 

How are EITHER of these two examples of free trade?

 

Why does the "cheese farmer" get preferential treatment/representation from the USA government and the auto industry does not?

 

 

[DTEJD1997]

Hey all:

 

Another good example is that foreign nationals can own real estate & property in the USA.  Why aren't USA citizens allowed to buy real estate in foreign countries?  Thailand & Mexico I'm looking at you!

 

I would think free trade would also entail the movement of capital, owning of property and real estate?

 

Once again, USA is wide open, her trading partners are NOT.

[shalab]

Agreed, I think this applies to all the trading partners of USA. A lot of the lobbying was done by corporates to open up USA markets to do labor arbitrage but the reverse isn't true.

 

Free trade was promoted by a bunch of academics using outdated models. USA trade deficit against China is 350 billion dollars and 75 billion against Germany. The first one is more than 1000 dollars  for every person in the USA. The second one is 250 dollars for every person.

 

 

I think most people would agree that free trade is good.

 

HOWEVER, I can think of three MAJOR example right off the top of my head of ANYTHING but free trade...

 

Coming back from the gym, I was listening to Michigan NPR...Something I try to do less & less, but the announcer was wailing that if President Trump rescinds the Korea free trade deal, a lot of Michigan won't be able to sell their cheese into Korea....and what a catastrophe that would be for Michigan jobs. 

 

That very well may be...I do not know a SINGLE dairy farmer, OR anybody connected to it.  Conversely, I know several people who work in auto plants/management for the big 3.  I know many others that work at auto parts suppliers...It is cost prohibitive to bring a car manufactured/assembled in the USA to Korea...not impossible, just so expensive as to not make it worth while.  We get plenty of Korean autos, and I buy LOTS of SSD drives and computer memory manufactured in Korea (Samsung).  Why won't Korea let us sell them cars on a reasonable playing field?  How much cheese does it take to equal the value of 1 auto/truck?

 

Same thing for Thailand.  I had a friend who wanted to bring Corvettes/Cadillac CTS-V's to Thailand.  It was relatively simple arranging the freight...slightly more burdensome filling out all the paperwork...almost impossible to overcome the 200% tariff on auto imports.  Thailand sends the USA plenty of Seagate hard drives....why can't America sell autos to Thailand with little or no tariffs? 

 

How are EITHER of these two examples of free trade?

 

Why does the "cheese farmer" get preferential treatment/representation from the USA government and the auto industry does not?

[Cigarbutt]

Thank you.

Comments help to understand the notion of unfairness that is now labeled to NAFTA and to all other international trade agreements.

Not much emphasis is put, it seems, on the gains.

 

My humble Canadian impression is that most people remain in favor or free trade on this side of the border.

Contentious aspects remain: lumber dispute, aspects of dairy/agricultural products and others.

 

My conclusion was that the main parts of the agreements worked well and aspects were, are and will be a source of discussions.

Maybe I am wrong.

 

I continue to have difficulty internalize how the free trade agreement with Canada caused such harm to the USA.

Successful agreements (whatever kind) work best when they are a win-win.

Negotiation skills include empathy, something that is not taught in university.

Hard to see a good outcome under present circumstances.

Disclosure: long term optimist.

 

 

 

[Cigarbutt]

shalab,

 

You are opening a breach (immigration, entitlement reform) that may lead to discussion gridlock (ideological contamination).

 

Perhaps, we can stick to the issue at hand which is free trade and bilateral agreements that the USA has reached with Canada or else.

This remains controversial and I will try to stick to objective data.

 

For some time, I have carefully looked at several reports/analyses of the effects of NAFTA between the US and Canada.

In the pile, you can find anything that you want. The most dogmatic reports are not terribly helpful.

 

Out of the many that I dissected, I include one below.

The report is balanced, is coming from the US and appears to be free of any specific agenda.

The report is described as resulting from a bipartisan effort.

 

Personal opinion: a lot of great things coming from the US are a consequence of constructive and respectful bipartisan work.

 

https://cdn.bipartisanpolicy.org/wp-content/uploads/2017/06/BPC-North-American-Free-Trade-Agreement-Overview.pdf

 

In the early part of this century, the US was in a very large trade surplus position.

The pendulum does swing.

 

Let's keep an open mind.

 

[Cigarbutt]

In terms of the number of parties to an agreement, I would submit that the European Union was designed to fail eventually by design but its demise will likely be precipitated by the relatively high number of heterogeneous members. So your suggestion to simplify negotiations through bilateral agreements is reasonable. After all, Canada is only a negligible factor in this global game. ???

 

Concerning the link provided, I understand that most essential comments and references support the arguments detailed in previous posts.

 

In 1918, Woodrow Wilson described 14 points that formed the backbone of the League of Nations. The League failed eventually in large part because President Wilson could not obtain support by the Senate, in the context of the primacy of domestic focus. The inability to deal with the global world order transition then did not help peace and trade, to say the least. The third point of his presentation: abolish economic barriers.

 

Definition of a barrier: a circumstance or obstacle that keeps people or things apart or prevents communication or progress.

[shalab]

EU may survive if Germany subsidizes all other countries through trade or other incentives. It runs a surplus. It is the same the us has done to sustain NATO. 

 

In terms of the number of parties to an agreement, I would submit that the European Union was designed to fail eventually by design but its demise will likely be precipitated by the relatively high number of heterogeneous members. So your suggestion to simplify negotiations through bilateral agreements is reasonable. After all, Canada is only a negligible factor in this global game. ???

 

Concerning the link provided, I understand that most essential comments and references support the arguments detailed in previous posts.

 

In 1918, Woodrow Wilson described 14 points that formed the backbone of the League of Nations. The League failed eventually in large part because President Wilson could not obtain support by the Senate, in the context of the primacy of domestic focus. The inability to deal with the global world order transition then did not help peace and trade, to say the least. The third point of his presentation: abolish economic barriers.

 

Definition of a barrier: a circumstance or obstacle that keeps people or things apart or prevents communication or progress.