From: M23231@mwvm.mitre.org
Subject: Re: Trade War?
Organization: The MITRE Corporation, McLean VA 22102
Date: Thu, 12 Nov 1992 14:44:21 GMT

In article <BxB4ME.9BC@apollo.hp.com>
nelson_p@apollo.hp.com (Peter Nelson) writes:
 
>
>
>
>  Why haven't I seen any comments on sci.econ about the
>  trade sanctions the US is imposing on the EC?  I mean
>  it's "economics", and it's got the usual elements of
>  bluster, brinksmans  hip, etc, that would seem to appeal
>  to a Usenet crowd.     Too esoteric for you guys?
>
>
>  I think US policy is stupid and indefensible on 3 counts:
>
>
>  1.  The entire world economy is very shaky just now; the last
>      thing it needs is a trade war.   We should all be trying
>      to INCREASE the volume of world trade.
>
Read "Small is Beautiful". We don't need to ship more stuff all over the globe
to have a good US economy. Shipping stuff over the globe to be consumed else-
where is inefficient and energy (capital) intensive. This thinking, though
currently popular, is wrong-headed.
>
>  2.  France, et al, are democracies.  Their voters have made it
>      clear that they WANT some of their tax money to be used for
>      agricultural subsidies.   What the US is, in effect, saying
>      to the EC officials is that they should ignore the wishes of
>      their own voters and instead follow OUR dictates.  This
>      sounds "imperialistic" to me.  I don't see how we can
>      morally justify this while at the same time allegedly trying
>      to promote democracy around the world.
>
The US needs to stop its grandiose thinking about controlling what goes on
abroad--promoting democracy--and such and start repairing our own sinking
ship. We don't have the resources to waste on "world leadership".
>
>  3.  If French taxpayers are willing to subsidize MY purchase
>      of canola oil, in effect taking money out of their own
>      pockets and putting into mine, why should we/I object?
>      In doing so they are conducting a transfer of wealth to
>      the US economy.   They are also providing the motivation
>      necessary to encourage US oil-seed makers to become more
>      efficient, lower their prices, and so forth.   It sounds
>      like a net win.
>
It may look like a net win, but I assure you it is not.
They will not be willing to do this without quid pro quo, and we will
subsidize their purchase of something US industry wants to export (with
the minimum amount of US labor cost possible), and it ends up in a high
level duel paid for by US taxpayers (or French taxpayers on their side)
with practically zero value added to consumers on both sides of the ocean.
Without such middleman costs the transportation costs alone are inefficient
compared to not doing the trades at all (and why are they really crucial to
a good life?). So I think you have a too simplistic view of win/lose analysis.
 
>   3b.  While the US may be protecting some jobs in their oilseed
>        industry, they are threatening jobs in other industries.
>        Specialty food and wine importers, restaurants, etc in
>        the immediate term, and just about any industry you can
>        name if this spins out of control.
>
The best function our gov't can perform is to serve those whose taxes pay for
it's viability. This means providing a level playing field for all Americans,
treating corporations as servants of the populace and not their masters, and
preventing corporations from becoming supra gov'ts which limit the security
and true independence of all nations. Free trade is not an end and must not
be treated as such. It is a means, and only useful if it serves legitimate ends
of nations. I see no usefulness in the free trade world our corporations and
talking heads are describing as the inevitable future.
 
---jerry
>
 
>---peter
>
>
>