NationStates Jolt Archive

"UN Tariff Accords"

Type: Free Trade Strength: Significant

ASSERTING that it is economically inefficient for a state to try to produce all the goods and services it needs;

RECOGNIZING that the use of comparative advantage in production, combined with trade, increases economic efficiency for all states involved, creating greater consumer choice at lower cost;

MAINTAINING that trade is most efficient when unrestricted between states;

DETERMINING that tariffs, defined on an added tax on the value of a good or service imported from or exported to another state, restrict trade between states;

CONCLUDING that it is in the best interest of all states to increase their economic efficiency and take part in the global marketplace, this resolution:

1. DECLARES that removal of import and export tariffs is in the best interest of all member nations;

2. REQUIRES all member states to reduce their import and export tariffs by a minimum of fifty percent (50%) within six months of the passage of this resolution;

3. CREATES an oversight committee to monitor compliance of member states;

4. URGES the formation of regional trading blocs that further reduce and/or eliminate tariffs between states;

5. ENCOURAGES member states to reduce non-tariff barriers to trade.


Well I've updated my proposal. I haven't submitted it yet, I figured it could probably use another round of public scrutiny before I do submit it. Helpful criticism is welcome. :) And for those of you who think "helpful criticism" includes things like, "It sucks and I'm not voting for it"............ :sniper: Thanks all.

You do realize that this would crush thousands of domestic companies?

you never defined tariffs last time around, did you?

and... make clause 2 effective immediately.

*applies gasoline, then lit magnesium flare*

There, it's perfect.

Writing-wise, I think it's excellent. The style is good and clear and you get your point across well.

As far as an economic judgement of the content, I'm not certain. I'm no economic expert so I'm not sure of the absolute value of trying to reduce tariffs so. So until someone with a sound economic background comes and comments, well the draft is still up in the air.

One thing you might add, and this would probably increase wordiness, is a clause that closes the loophole of nations increasing their tariffs by 100% before the resolution would go into effect. It's go something like "MEASURES tariffs for their lowering by 50% according to normal values, before this resolution came to vote--as approved and investigated by the oversight committee;" That sort of a clause would keep nations honest in their reduction. Laws and text passed from an unsentient resolution you can bypass, but as committee of living breathing representatives are slightly harder to fool.

Just an idea to consider.

*applies gasoline, then lit magnesium flare*

There, it's perfect.

*shakes head in disgust*

Honestly, Vastiva...

Hey, Asshellmetta, remember me?

Anyway, with regrad to the proposal. I proposed a resolution very similar to this a while back, and, it was believed that that it was not a good idea on the grounds that it would infringe on economic sovereignty too much, a bit like this one, really.

Also, it was argued that protectionist policies were a useful tool in protecting fragile economies from potentially damaging competition which might create unemployment.

Hey, Asshellmetta, remember me?

Anyway, with regrad to the proposal. I proposed a resolution very similar to this a while back, and, it was believed that that it was not a good idea on the grounds that it would infringe on economic sovereignty too much, a bit like this one, really.

Also, it was argued that protectionist policies were a useful tool in protecting fragile economies from potentially damaging competition which might create unemployment.
Thanks, that saved me the effort.

Mathieu Vergniaud
Deputy Speaker to the UN

Being a representative of a nation centered on the concept of free trade, I find that this proposal would make a fine addition to the UN legislation. I would caution against the raising of tariffs the night before this went into affect, much as the representative of Powerhungy Chipmunks has pointed out. It would be very disappointing to pass this legislation into law, and to see no change in the current tariffs being paid out, due to those taking advantage of the current loophole.

I have another point to raise:

Clause 4 urges regions to form trade blocks. This is slighty contradictory to the idea of free trade. Trade blocks, like the EU (forgive me), only allow for free trade between block members. A common external tariff exsists which is enforced on all nations outside the trade block. This is what a trade block is.

By urging the formation of regional trade blocks, you are, ironically enough, undermining your own resolution. Since external tariffs will exsist between regions.

I have another point to raise:

Clause 4 urges regions to form trade blocks. This is slighty contradictory to the idea of free trade. Trade blocks, like the EU (forgive me), only allow for free trade between block members. A common external tariff exsists which is enforced on all nations outside the trade block. This is what a trade block is.

By urging the formation of regional trade blocks, you are, ironically enough, undermining your own resolution. Since external tariffs will exsist between regions.

A trading bloc doesn't necessarily mean their will be increased tariffs for states outside the bloc, but that could happend. Hmm, possibly by clarifying clause 2 to make the mandated cuts in tariffs permanent?

you never defined tariffs last time around, did you?

I've added the basic definition of a tariff under the "DETERMINING" line of the introductory clause.

You do realize that this would crush thousands of domestic companies?
As far as an economic judgement of the content, I'm not certain. I'm no economic expert so I'm not sure of the absolute value of trying to reduce tariffs so. So until someone with a sound economic background comes and comments, well the draft is still up in the air.

Free trade capitalizes on the principle of comparative advantage, which I will briefly explain. Supposing we had a world of two states, A and B, and the only two goods in the world are guns and butter. Let's say that A can produce 12 units of guns or 16 units of butter in one month, and that B can produce 10 units of guns or 4 units of butter in one month. A has an absolute advantage over B: it can produce more guns or butter than B can. So, in one month A can have 6 units of guns and 8 units of butter, and B will only have 5 units of guns and 2 units of butter. The world has a total of 11 units of guns and 10 units of butter.

But now we throw in the concept of comparative advantage and trade. Since A can produce more butter than guns in one month, it will specialize in butter, and vice versa for B. Even though A has an absolute advantage over B, B has a comparative advantage in producing guns. So, if the two countries specialize, in one month A produces 16 units of butter and B produces 10 units of guns. So the world supply gains six units of butter and loses one unit of guns when specialization occurs, for a net gain of 5 units of goods.

This is a very simplified model, but demonstrates the basic economic principle that if states focus on producing what they produce best and trade freely to acquire other goods, the whole global marketplace benefits. It isn't perfect, yes. Some businesses do suffer. But the increased efficiency benefits all economies, and can make up for or even surpass the jobs lost to foreign competition.

The economic argument for lower/no tariffs is a strong one in certain circumstances. The principle of comparative advantage, like much else in economics, exists within a vacuum of perfection. Unfortunately we do not live in a perfect world.

Granted, in Europe, and elsewhere in developed (REAL) world, the removing of tariff and non-tariff barriers has been fairly successful in furthering the free movement of goods, services and labour and generally improving Europe's economy. Sure enough, the wealthier states do to a certain extent support some of the economically weaker Mediterranean ones (hence places like Norway have not joined because there is no real net economic benefit given the relative weakness of other European economies), but generally speaking the implementation of the single market is a success story.

However, we have to recognise that Europe is largely homegeneous, at least economically (indeed it must be, given the EU) and therefore conducive to blanket policies. It would be naïve to think that blanket economic policies would be prudent in the world as a whole, be it the real world or NS-world – different stages of economic development requires different market structues. Protectionism will in some cases be necessary. For instance, developing manufacturing industries will not be as efficient as developed ones – these need to be protected until they are able to competitive in the world market, and THEN truefree market policies can be sensibly pursued.

Unsurprisingly, competitiveness is needed to compete. By reducing barriers to trade to the extent this proposal suggests, we deprive some states of an opportunity to become competitive in the first place. We need to reconcile theory (competitive advantage) with practical realities (a non-homogeneous developing world) – this proposal pursues one at the expense of the other and is as such unrealistic and unworkable.

If you're going to go the "no tariffs" route, I would suggest further modifying clause 2 so that it sets tariff rates to no more than 50% of the tariff rates two months prior to the resolution's passage. That way nations wouldn't be able to double their tariffs the night before the resolution goes through and then "comply with the resolution."

Otherwise, it's been a while since an overall well-written free trade proposal was put together. I'd probably approve it for debate, whether I ultimately agreed with it or not.

Hey, Asshellmetta, remember me?

Anyway, with regrad to the proposal. I proposed a resolution very similar to this a while back, and, it was believed that that it was not a good idea on the grounds that it would infringe on economic sovereignty too much, a bit like this one, really.

Also, it was argued that protectionist policies were a useful tool in protecting fragile economies from potentially damaging competition which might create unemployment.
OOC:

You managed to make my name even more insulting. I like it.

I may have argued the first point, but I would have been wrong. Tariffs and import quotas are not directly dealt with by the game - they exist in role play only. This makes the national sovereignty argument much less weighty, in my mind.

I think it was DLE who argued the second point, and posted a mistaken analysis of the steel industry in RL USA to back it up. But his history was wrong, so his argument falls apart. The reason the steel industry in the US collapsed was because deomestic mini-mills recycling scrap metal learned how to make better and better steel, and they had huge cost advantages.

Tariffs are a bad idea, even in the case of government-subsidized dumping. Clintonian retraining assistance for laid-off workers is a much better defense against dumping.

The economic argument for lower/no tariffs is a strong one in certain circumstances. The principle of comparative advantage, like much else in economics, exists within a vacuum of perfection. Unfortunately we do not live in a perfect world.

Granted, in Europe, and elsewhere in developed (REAL) world, the removing of tariff and non-tariff barriers has been fairly successful in furthering the free movement of goods, services and labour and generally improving Europe's economy. Sure enough, the wealthier states do to a certain extent support some of the economically weaker Mediterranean ones (hence places like Norway have not joined because there is no real net economic benefit given the relative weakness of other European economies), but generally speaking the implementation of the single market is a success story.

However, we have to recognise that Europe is largely homegeneous, at least economically (indeed it must be, given the EU) and therefore conducive to blanket policies. It would be naïve to think that blanket economic policies would be prudent in the world as a whole, be it the real world or NS-world – different stages of economic development requires different market structues.
The EU is anything but a free trade bloc. The EU is a huge market-distorting parasite, taxing success and propping up ineffective and unworthy "local" competition.


Protectionism will in some cases be necessary. For instance, developing manufacturing industries will not be as efficient as developed ones – these need to be protected until they are able to competitive in the world market, and THEN truefree market policies can be sensibly pursued.

Those 2 sentences embody most of what's economically wrong with the EU.

yes, this was all OOC since the topic was the EU.

2. REQUIRES all member states to reduce their import and export tariffs by a minimum of fifty percent (50%) within six months of the passage of this resolution;


I believe I mentioned the last time around that this number means literally nothing, as the nations who see the resolution coming or who are just joining the U.N. can A) Raise their tariffs by 200 percent a day before the resolution passes, and B) Re-raise their tariffs after reducing them. In other words, it doesn't do anything. Other than that, the proposal doesn't really do anything.

Free trade capitalizes on the principle of comparative advantage, which I will briefly explain. Supposing we had a world of two states, A and B, and the only two goods in the world are guns and butter. Let's say that A can produce 12 units of guns or 16 units of butter in one month, and that B can produce 10 units of guns or 4 units of butter in one month. A has an absolute advantage over B: it can produce more guns or butter than B can. So, in one month A can have 6 units of guns and 8 units of butter, and B will only have 5 units of guns and 2 units of butter. The world has a total of 11 units of guns and 10 units of butter.

But now we throw in the concept of comparative advantage and trade. Since A can produce more butter than guns in one month, it will specialize in butter, and vice versa for B. Even though A has an absolute advantage over B, B has a comparative advantage in producing guns. So, if the two countries specialize, in one month A produces 16 units of butter and B produces 10 units of guns. So the world supply gains six units of butter and loses one unit of guns when specialization occurs, for a net gain of 5 units of goods.

This is a very simplified model, but demonstrates the basic economic principle that if states focus on producing what they produce best and trade freely to acquire other goods, the whole global marketplace benefits. It isn't perfect, yes. Some businesses do suffer. But the increased efficiency benefits all economies, and can make up for or even surpass the jobs lost to foreign competition.

Firstly, never, ever, ever use the words "butter" and "guns" in the same sentence. There's a very complex reason why involving a terribly bad metaphor and the NRA, but I have absolutely no interest in explaining it. Just.. use some other example. Please.

And that's... not simplified at all, really. You could use either numbers or number words as opposed to both and it might hurt the eyes slightly less. 4 and five and 23 and forty is kind of tricky to coherently piece together at 10:30 at night.

As to what your confusing example is actually saying, there's still the problem of having 37,000 nations in the U.N. world (and billions elsewhere) as opposed to about 200 where this this theory actually comes from, or the two that you used. With 2 nations, it seems possible, and everyone has plenty of buttery guns to go around. But keep in mind that you are talking about, oh 18,500 times that number of nations and an equivalent or greater growth in all of the problems that you state will happen. There's enough economic powerhouses to specialize in anything worth getting and the poor nations aren't going to be able to compete with anyone. You're not just talking about "some businesses", you're talking about hundreds of thousands because the NationStates universe is substantially larger than the world.

Plus, it doesn't reduce tarriffs outside the U.N. which also causes problems.

I appreciate that opinions may differ on the EU, but referring to it as a 'huge market-distorting parasite, taxing success and propping up ineffective and unworthy "local" competition' is not arguing, it's making a statement. I would like to know how you explain Europe's staggering economic development since a common market in coal and steel between France, Italy, Germany, and the Benelux states was created more than fifty years ago. And also what you make of the 19 other states who since then thought that the EU was such a good idea at the time that they decided to join it?

Note I have said nothing about political and social integration, which is HIGHLY contentious in the context of the EU, but against the argument that the EU has done well in improving trade between its member state, there is little rebuttal. What it has done is create a trade bloc with barriers to trade against the world as a whole, but this has simply been a necessary component of making the European economic project as successful as it has been.

So, Asshelmetta (forgive typing error), you do remember me. Yes, we were talking about free trade a while back, when I proposed a resolution similar to the one we're talking about here.

It seems that you have done something of a U-turn with regard to your arguments about a free-trade resolution infringing on national sovereignty. I for one, remain in favour of free trade, because of compartive advantage and the benefits for consumers. I would like to see a resolution passed to this end.

OOC - with regard to the EU, we are in serious danger of going off topic here. I spoke about the EU because it is a trade block with a common external tariff. Clearly, common external tariffs are contradictory to the ideals of free trade, therefore, I believe that the 4th clause should be amended with this in mind. I would suggest you amend this clause to:

4. URGES the formation of regional free trade zones that further reduce and/or eliminate tariffs between states;

Note the replacement of the trade block, with the free trade zone. The difference between trade blocks and free trade zones is that free trade zones do not adopt common external tariffs with regard to nations outside the trade zone. The formation of regional free trade zones, will of course, mean that non-UN member states within such regions will be required to remove their tariffs.

It seems to me that with all the footsie that is being played with the wording here, it may just be simpliar to propose a ban on tariffs, and then provide reasons, and offer suggestions as to how to benefit from the lack of tariffs (ie banning together in a free-trade zone). It feels like we're argueing too much semantics here and not enough meaty resolution.

Plus, it doesn't reduce tarriffs outside the U.N. which also causes problems.

do not even think about asking us to drop our tariffs, the tariffs stay because we have to protect our automotive industry from the neo Marxist world conspiracy.

do not even think about asking us to drop our tariffs, the tariffs stay because we have to protect our automotive industry from the neo Marxist world conspiracy.

Who cares about you? You're not in the UN and your nation is likely going to be deleted for an insulting name.

Who cares about you? You're not in the UN and your nation is likely going to be deleted for an insulting name.

Well, I think he was responding to a perceived threat for the UN to try to enforce resolutions upon non-UN members (which is illegal, of course), and even if he weren't, as long as he's not flaming or flamiebaiting or trolling (or spamming or post-whoring, etc.) then my experience is that his opinion has full right to be here.

A good example is Iakeokeo, who, shortly after joining the UN and becoming active in the forum, quit the UN and denounced all it stood for. While his rhetoric tended to be derivative and he didn't really contribute much most of the time, he had a right to post here--so long as it was on topic and within forum rules. You can't ask anyone to stop posting in United Nations just because he or she is not a member. Well, you can, but no one will, or should, heed you.

Well, I think he was responding to a perceived threat for the UN to try to enforce resolutions upon non-UN members (which is illegal, of course), and even if he weren't, as long as he's not flaming or flamiebaiting or trolling (or spamming or post-whoring, etc.) then my experience is that his opinion has full right to be here.

A good example is Iakeokeo, who, shortly after joining the UN and becoming active in the forum, quit the UN and denounced all it stood for. While his rhetoric tended to be derivative and he didn't really contribute much most of the time, he had a right to post here--so long as it was on topic and within forum rules. You can't ask anyone to stop posting in United Nations just because he or she is not a member. Well, you can, but no one will, or should, heed you.

*hands PC his glasses*

Do point out where it is stated he can't post, by me.

As its not present, I would ask you to stop putting words in my mouth.

Thank you.

*hands PC his glasses*

Do point out where it is stated he can't post, by me.

As its not present, I would ask you to stop putting words in my mouth.

Thank you.

You suggest that his voice is not important in this forum by asking "Who cares about you", and you state "If you are not a member, do leave" in another thread. Stop acting like you have some sort of authority over other posters here. You don't.

No, thank you.

OOC - with regard to the EU, we are in serious danger of going off topic here. I spoke about the EU because it is a trade block with a common external tariff. Clearly, common external tariffs are contradictory to the ideals of free trade, therefore, I believe that the 4th clause should be amended with this in mind. I would suggest you amend this clause to:

4. URGES the formation of regional free trade zones that further reduce and/or eliminate tariffs between states;

Note the replacement of the trade block, with the free trade zone. The difference between trade blocks and free trade zones is that free trade zones do not adopt common external tariffs with regard to nations outside the trade zone. The formation of regional free trade zones, will of course, mean that non-UN member states within such regions will be required to remove their tariffs.

Thanks Adamsgrad, that's a great idea.

ASSERTING that it is economically inefficient for a state to try to produce all the goods and services it needs;

Not entirely true. DLE manages it and has an economy that can crush you. Get efficient.

RECOGNIZING that the use of comparative advantage in production, combined with trade, increases economic efficiency for all states involved, creating greater consumer choice at lower cost;

By having nations which produce inferior products at far cheaper prices being able to edge out corporations that have to deal with native standards. It's also cheaper to buy products of the same quality from nations not quite as scrupulous as yours about employee payment practices.

MAINTAINING that trade is most efficient when unrestricted between states;

I've found it woefully inefficient. If a nation I am depending on has a natural disaster and is unable to sell what I buy from them, they're not the only ones hurt. Top it all off, my nation is situated in an area that is a military dream and a diplomatic nightmare. I've heavily defended by both my military and by nature, but the natural defenses don't discriminate between friend and foe. Every nation I try to deal with is extra resources I must devote to reaching them and getting the products to them. Producing everything myself has turned out to be far more efficient in both runs. Plus, my economy is strengthened.

DETERMINING that tariffs, defined on an added tax on the value of a good or service imported from or exported to another state, restrict trade between states;

Which is why some like them.

CONCLUDING that it is in the best interest of all states to increase their economic efficiency and take part in the global marketplace, this resolution:

1. DECLARES that removal of import and export tariffs is in the best interest of all member nations;

2. REQUIRES all member states to reduce their import and export tariffs by a minimum of fifty percent (50%) within six months of the passage of this resolution;

3. CREATES an oversight committee to monitor compliance of member states;

4. URGES the formation of regional trading blocs that further reduce and/or eliminate tariffs between states;

5. ENCOURAGES member states to reduce non-tariff barriers to trade.

Don't expect me to go along with #5. Unless you can prove to me your products are worth my time, don't expect trade.

I think it was DLE who argued the second point, and posted a mistaken analysis of the steel industry in RL USA to back it up. But his history was wrong, so his argument falls apart. The reason the steel industry in the US collapsed was because deomestic mini-mills recycling scrap metal learned how to make better and better steel, and they had huge cost advantages.

Which would have driven native steel companies that produce new steel down a few pegs, but wouldn't have exterminated them. You can only recycle so much steel in a year, and quite a bit goes unrecycled due to a variety of reasons. The recycling steel mills would have begun to notice a decreasing supply of scrap and be forced to rely on the steel mills producing new steel. That is where the foreign mills come in and deliver the deathblow.

I don't ignore obvious details such as that.

You suggest that his voice is not important in this forum by asking "Who cares about you", and you state "If you are not a member, do leave" in another thread. Stop acting like you have some sort of authority over other posters here. You don't.

No, thank you.

Dear me, but listening to you, one would think you have some sort of authority over what I or anyone else can post.

Seeing as you do not, pbbbbbttttthhhhpppppbbbbt!

Dear me, but listening to you, one would think you have some sort of authority over what I or anyone else can post.

Seeing as you do not, pbbbbbttttthhhhpppppbbbbt!

Think what you want, as you always do. It's not the people who whine and degrade other posters that make this forum effective, though you're free to have whatever ego trip you feel like. I however, am not interested in an insult contest with, of all people, Vastiva. So, I'm just going to ignore your accusation, your habitual, unwarranted hostility to any and all ideas not to your liking, as well as the spittle you've just launched at my cheek.

But still, you should really think about a breath mint now and then ;).

Think what you want, as you always do. It's not the people who whine and degrade other posters that make this forum effective, though you're free to have whatever ego trip you feel like. I however, am not interested in an insult contest with, of all people, Vastiva. So, I'm just going to ignore your accusation, your habitual, unwarranted hostility to any and all ideas not to your liking, as well as the spittle you've just launched at my cheek.

But still, you should really think about a breath mint now and then ;).

Gee, thanks mom. *tosses you a walnut*

You suggest that his voice is not important in this forum by asking "Who cares about you", and you state "If you are not a member, do leave" in another thread. Stop acting like you have some sort of authority over other posters here. You don't.

No, thank you.

Vastiva has issues.

I like the way Vastiva quotes teachings from Sufism. You'd never know it reading Vastiva's posts.

Son, quit while you're behind.

Son, quit while you're behind.

Oh, I feel faint, is it getting dark in here? Vastiva just scolded me.

Vastiva
Sp@mQueen advisor

Join Date: Jul 2004
Location: Antarctican, and p-p-proud of it!
Posts: 3,999

Ooh, Ooh, Vastiva's about to give his 4000th post!

What will it be?

Who will it be to?

*Women swoon throughout the UN building, lobbing undergarnments onto the stage: "Pick me! Pick Me!"*

ouch... my head hurts from reading this. I'm off for an aspirin!

I appreciate that opinions may differ on the EU, but referring to it as a 'huge market-distorting parasite, taxing success and propping up ineffective and unworthy "local" competition' is not arguing, it's making a statement. I would like to know how you explain Europe's staggering economic development since a common market in coal and steel between France, Italy, Germany, and the Benelux states was created more than fifty years ago. And also what you make of the 19 other states who since then thought that the EU was such a good idea at the time that they decided to join it?

OOC:

I had forgotten that post.
I'm pretty proud of that line, in retrospect.

"[that's] not arguing, it's making a statement"... Of what does debate consist, if not making statements?

How do I explain western Europe's "staggering" economic development in the last 50 years?
1. by pointing out that the starting point was the aftermath of WW II, and just getting back to a normal level of economic activity was enough of a jump to throw off the statistics.
2. by calling it "tepid" rather than "staggering".
3. by pointing to the billions of dollars the US spent to jumpstart european economies in the 1950's.

The other 19 members are joining because of what I said originally - the EU is a mechanism for transferring wealth from the wealthy nations to the poor ones.

I think it was DLE who argued the second point, and posted a mistaken analysis of the steel industry in RL USA to back it up. But his history was wrong, so his argument falls apart. The reason the steel industry in the US collapsed was because deomestic mini-mills recycling scrap metal learned how to make better and better steel, and they had huge cost advantages.


Which would have driven native steel companies that produce new steel down a few pegs, but wouldn't have exterminated them. You can only recycle so much steel in a year, and quite a bit goes unrecycled due to a variety of reasons. The recycling steel mills would have begun to notice a decreasing supply of scrap and be forced to rely on the steel mills producing new steel. That is where the foreign mills come in and deliver the deathblow.

I don't ignore obvious details such as that.
OOC:
I think the mini-mills produce far more steel than is imported today.
I stand by my analysis.

Ooh, Ooh, Vastiva's about to give his 4000th post!

What will it be?

Who will it be to?

*Women swoon throughout the UN building, lobbing undergarnments onto the stage: "Pick me! Pick Me!"*

You worry me sometimes, PC.

The rest of the time, we import your women.