From: gld@cunixb.cc.columbia.edu (Gary L Dare)
Subject: Re: Ross Perot, Free Trade
Keywords: free trade
Reply-To: gld@cunixb.cc.columbia.edu (Gary L Dare)
Organization: Curious Goods (formerly Louis Vendredi Antiques)
Distribution: na
Date: Thu, 9 Apr 1992 16:45:31 GMT

whynot@leland.Stanford.EDU (William Shepherd) writes:
>pat@chinet.chi.il.us (Patrick Louis Sugent) writes:
>
>>2)  Statistics quite easy to find reveal that countries with high trade 
>>barriers have very poor economies(barriers made the economies obviously
>>worse off in many of these cases that I have knowledge of.)
>
>Sorry, but I doubt your statistics.  Japan is _not_ noted for its free 
>trade. Any statistics would probably be considerably biased due to the 
>effect of political systems as well.

The difference lies in the nature of the barriers for that particular
economy.  The intent of tariffs are to protect your fragile domestic
industries, although in practice these tariffs remain to protect those
very same industries until they themselves percieve need to request
lifting of the tariffs to play better in the international arena
(e.g., GATT, where everyone agrees to drop their guns in specific area
... in raising that question in another thread, I got e-mail slamming
GATT and proposing actions which the GATT process entails already. (!)
Hmmm).  In the case of Canada, I can bear witness that tariffs which
protect nobody lead to higher consumer prices, extra dollars to fuel
bloat of the federal bureaucracy, and a general deterioration in the
material quality of life.  A consumer rebellion by Canadians expressed
in cross-border shopping has put additional pressure on realignment of
domestic markets, where the federal government has reduced/eliminated
"gravy" tariffs, conformed to GATT terms agreed to years previous, and
installed a value-added tax to expose true retail prices (even truer
without tariffs carried in those prices).  N.B., complaints about the
GST tax arose from a silly scheme implementing the tax overnight that
caused a massive inflation spike, and distributors taking a free price
hike when a hidden wholesale tax was removed in favour of the GST.

>I'm not really against free trade.  I'd just like to see a bit more 
>intelligent debate on the subject.  Far too many people are under the
>impression that free trade is automatically the right thing to do, and
>that only narrow special interest groups are opposing it.  I'm just
>trying to note the fact that there _may_ be sound economic reasons
>for opposing free trade with certain countries.

An article by a U of Toronto economist prior to the implementation of
the US-Canada Free Trade Agreement pointed out that free trading sees
benefits when its optimizations are shared between those economies
that are involved.  The E.C. was pointed out as an arrangement where
the benefits trade-offs went around between member countries to have a
convincing overall improvement for each member.  This article did,
however, argue against the US-Canada deal because it only involved two
parties not 12 without the disparities in social systems.  Recent
history has shown so far that it has not been social system but that
Canada was unprepared for the FTA due to domestic economic changes
were not effected for internal efficiencies before working on those
across the national borders.  But as these internal issues are being
addressed, Canadians should question whether their non-GATT free trade
efforts should be with the NAFTA, though, rather than making a second
overture to the EC whose size and similiar social system can provide a
bulwark against American lack of same (including poor/half-hearted
implementations where attempted) as events progress.

gld
--
~~~~~~~~~~~~~~~~~~~~~~~~ Je me souviens ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Gary L. Dare				U.S. Elections 1992, Vote Now:
> gld@cunixB.cc.columbia.EDU		a) Elvis 50's stamp, or
> gld@cunixc.BITNET			b) Elvis 70's stamp?