NationStates Jolt Archive

The following proposal is offered in draft form for commentary and (we hope) improvement. PLEASE DO NOT WASTE TIME DECLARING THIS RESOLUTION TO BE ILLEGAL ON THE BASIS OF SECTION 4 OF RESOLUTION #105 ("NATIONAL SYSTEMS OF TAX"). We know that this is a problem and are planning on submitting this only after the repeal of said Resolution. You may of course point out problems other than this, and it is hoped that people will.

The Common Market

Category: Free Trade
Businesses Affected: All
Effect: Strong
Proposed By: Allemande

RECOGNISING that free trade benefits all nations by permitting each to specialise in those endeavours where they are most productive, BUT ALSO

WISHING to allow Member nations the maximum possible leverage in negotiating outside trade arrangements,

THESE UNITED NATIONS DO HEREBY DECLARE

THAT, we Members as a whole, we shall NOW AND HENCEFORTH constitute a SINGLE COMMON MARKET, AND ALSO

THAT ACCORDINGLY, we Members shall impose no tariff, duty, import tax, quota, or any other trade restriction on goods originating from within this Common Market, save where provided below.

TO FACILITATE this Resolution, WE DO HEREBY DEFINE:

¤ A "good" as a product or service asked or offered as part of an economic transaction,

¤ An "economic transaction" as an exchange of valuables or future consideration of the same,

¤ "Importation" as the act of bring goods across a jurisdictional boundary for the purposes of conducting an actual or potential economic transaction,

¤ "Tariffs", "duties", or "import taxes" as fees assessed against imported goods, NOT INCLUDING

- Service fees, such as (but not restricted to) tolls, landing or harbour fees, loading or cartage fees, inspection or administrative fees, or other fees assessed in payment for the use of facilities or the costs of border transit, so long as the same fee schedule is used for all similar goods handled in the same way, regardless of origin, AND

- Transaction fees and taxes, such as (but not restricted to) sales or value added taxes, license or title transfer fees, or other liabilities assessed against goods involved in economic transactions, so long as the same fee schedule is used for all similar goods exchanged in the same way, regardless of origin, AND

- Equalisation taxes intended to compensate for differential tax rates in different jurisdictions, so long as the total burden of all taxes, after equalisation, is no greater than than the lowest tax burden imposed on any similar good asked or offered in the same way, regardless of origin.

¤ "Origin" as that jurisdiction, national or otherwise, in which over half the fair market value of a good was created or added.

¤ "Contraband" as EITHER

- Any good whose purchase or sale has been banned within the importing nation, so long as this ban applies equally to all such goods regardless of national origin.

- Any good whose origin is attributable to a nation or group of nations under embargo by the importing nations long as this ban applies equally to all such goods regardless of itinerary.

- Any good whose purchase, sale, or ownership is banned by any resolution of these United Nations.

¤ "Itinerary" as the path a good travelled in reaching the importing nation from its origin.

WE DO ALSO DECLARE THAT the Membership in this Common Market shall IN NO WAY PREVENT its Members from imposing tariffs, duties, import taxes, quotas, or any other trade restriction on goods originating in any nation outside the Common Market.

FINALLY, these United Nations HEREBY RESERVE THE RIGHT to expand upon these rules as needed in other Resolutions, so long as NONE of the above terms are thereby contradicted.

Character Count: 3197

<Argument to be inserted here>

- Allemande

You need a section about subsidies - If nation "A" provides financial help to its Widget Factories - it puts nation "B's" Widget guys at a disadvantage in the same way that a tarrif would.

There is no use in eliminating one without controlling the other.

Greetings.

An interesting and fair proposal. We note it has a few typographic errors and minor problems which mar an otherwise excellent piece of legal prose.

1. If we are not in error, this proposal does not allow members of the NSUN from imposing many kinds of trade restrictions on our own products when exporting them to non-NSUN states. It allows us to impose restrictions on imports from non-member states. Although in theory we can use one to balance the other, it would mean that a tradeable good from NSUN member X to NSUN member Y could have no restriction such as 'Y cannot resell to Z (a non-member state)'.

2. Third paragraph from bottom, ""Itinerary" as..."

3. Second last word, "...thereby..."

You need a section about subsidies - If nation "A" provides financial help to its Widget Factories - it puts nation "B's" Widget guys at a disadvantage in the same way that a tariff would.

There is no use in eliminating one without controlling the other.I disagree.

The omission was deliberate.

First, in 3000-3200 characters, it is impossible to handle both tariffs and subsidies. You could write a Resolution banning subsidies, but I would vote against it. :)

And thus on to my greater point: I think that a great deal of what is wrong with the framework of "free trade" that we have erected in Real Life™ lies in the misguided attempt to religiously eliminate subsidies. Not that we have a choice, having started down that path: a cash subsidy isn't really any different than a tax subsidy, which isn't any different than a so-called structural subsidy. And down that path lies anarchy.

Think about it: does it make a difference if I give a farmer $1,000 an acre, or give him a refundable tax credit of $1,000 a acre? Not really. But it goes further still: if I pass laws requiring (or forbidding) certain kinds of economic actions, can't that be construed as a subsidy? Indeed, it can.

Thus, in Real Life™, the home mortgage deduction on the US 1040 Schedule A could be seen as a subsidy for the U.S. construction industry; college tuition credits or health care deductions could be seen as subsidies of America's universities (which are an important source of import revenue for the U.S., BTW) and her health care industry (which is another important source of import revenue for the U.S.). Under Real Life™ W.T.O. rules, both could be challenged and both could be banned.

The E.U.'s objections to American farming practices (and especially the use of hormones in animal husbandry and genetically altered foods in cereal agriculture) could be seen as an attempt to protect European farmers from American competition. Do away with them!

And from there, it gets worse: workplace safety regulations? Environmental regulations? Labour rights? All obstacles to trade!

I could even make a case that civil liberties are an obstacle to trade. Chinese companies face an extraordinary burden in attempting to purchase and operate American affiliates, since they can not legally use the same management techniques they use back home. Preventing them from shooting troublemakers or using slave labour is a violation of their right to compete on an even playing field in the highly lucrative game of corporate acquisitions, mergers, and buyouts.

At the end of the day, governments are left with the power to regulate nothing under our wonderful Real Life™ "free trade" rules. All because someone screamed about someone else getting a subsidy.

<deep breath>

Now, putting on my Real Life™ cap as a person who got a Bachelor's in economics, I will state the following (which you are, of course, free to dispute): subsidies always introduce economic inefficiency into a society's economy. There are no exceptions to this rule. From a microeconomics P.O.V., the subsidy may benefit a particular class of individuals, but others in society always suffer an even greater loss as a consequence of this.

In Real Life™, we seek out and destroy subsidies to be fair to individual businesses faced with competition. But if you stop and take the collective P.O.V. (IOW, if you look at things from a macroeconomics, or national P.O.V.), our response to subsidies should be glee at the fact that our competitors have shot themselves in the foot by partaking of them. As their competitors, or position is the inverse of theirs: a few of our citizens are harmed by their subsidies, but the many benefit far more than those few suffer.

Thus, the appropriate policy response to a subsidy is to offer aid to those harmed, and help them transition to a new line of work. That allows us to enjoy the benefits of other nation's foolishness while minimizing the impact to those few among our citizens who got harmed by other nations' failure to "play fair".

Allowing subsidies maintains each nation's independence of action; it permits each country to choose their own poison, so to speak - to suffer from the adverse consequences of their own preferences. Allemande subsidizes its auto industry because cars are an important part of our culture, and because we want that industrial capacity available to us as part of our "military-industrial complex". You can do the same, if you want - or not. But this way, it's your choice - and that's a good thing.

Let me pay the price of my own convictions, and you can pay the price of yours. That is the Federalist/NatSov P.O.V., and its one that I wanted to respect in crafting this resolution. So no ban on subsidies here, by design.

If we are not in error, this proposal does not allow members of the NSUN from imposing many kinds of trade restrictions on our own products when exporting them to non-NSUN states.We'll look again, because that was not our intention, but we believe the actual fact of the matter is that we don't speak of them. By inference, our position (which we will certainly be willing to reconsider based on what others say), is to adhere to the old adage that "what is not explicity forbidden is allowed" (or "silence is acquiesence", if you prefer). So, unless we made an error, such limitations should still be permitted.
It allows us to impose restrictions on imports from non-member states. Although in theory we can use one to balance the other, it would mean that a tradeable good from NSUN member X to NSUN member Y could have no restriction such as 'Y cannot resell to Z (a non-member state)'.Hmmm. Again, we in Allemande think that the fact that we're not addressing exports means that in fact you could impose such a limitation.

As pointed out above, the foregoing does not exclude other trade-related resolutions, such as one on subsidies - or, in your case, export restrictions.


Third paragraph from bottom, ""Itinerary" as..." and ... (s)econd last word, "...thereby..."Noted and corrected! Thanks!

I disagree.

The omission was deliberate.

First, in 3000-3200 characters, it is impossible to handle both tariffs and subsidies. You could write a Resolution banning subsidies, but I would vote against it. :)

And thus on to my greater point: I think that a great deal of what is wrong with the framework of "free trade" that we have erected in Real Life™ lies in the misguided attempt to religiously eliminate subsidies. Not that we have a choice, having started down that path: a cash subsidy isn't really any different than a tax subsidy, which isn't any different than a so-called structural subsidy. And down that path lies anarchy.

Think about it: does it make a difference if I give a farmer $1,000 an acre, or give him a refundable tax credit of $1,000 a acre? Not really. But it goes further still: if I pass laws requiring (or forbidding) certain kinds of economic actions, can't that be construed as a subsidy? Indeed, it can.

Thus, in Real Life™, the home mortgage deduction on the US 1040 Schedule A could be seen as a subsidy for the U.S. construction industry; college tuition credits or health care deductions could be seen as subsidies of America's universities (which are an important source of import revenue for the U.S., BTW) and her health care industry (which is another important source of import revenue for the U.S.). Under Real Life™ W.T.O. rules, both could be challenged and both could be banned.

The E.U.'s objections to American farming practices (and especially the use of hormones in animal husbandry and genetically altered foods in cereal agriculture) could be seen as an attempt to protect European farmers from American competition. Do away with them!

And from there, it gets worse: workplace safety regulations? Environmental regulations? Labour rights? All obstacles to trade!

I could even make a case that civil liberties are an obstacle to trade. Chinese companies face an extraordinary burden in attempting to purchase and operate American affiliates, since they can not legally use the same management techniques they use back home. Preventing them from shooting troublemakers or using slave labour is a violation of their right to compete on an even playing field in the highly lucrative game of corporate acquisitions, mergers, and buyouts.

At the end of the day, governments are left with the power to regulate nothing under our wonderful Real Life™ "free trade" rules. All because someone screamed about someone else getting a subsidy.

<deep breath>

Now, putting on my Real Life™ cap as a person who got a Bachelor's in economics, I will state the following (which you are, of course, free to dispute): subsidies always introduce economic inefficiency into a society's economy. There are no exceptions to this rule. From a microeconomics P.O.V., the subsidy may benefit a particular class of individuals, but others in society always suffer an even greater loss as a consequence of this.

In Real Life™, we seek out and destroy subsidies to be fair to individual businesses faced with competition. But if you stop and take the collective P.O.V. (IOW, if you look at things from a macroeconomics, or national P.O.V.), our response to subsidies should be glee at the fact that our competitors have shot themselves in the foot by partaking of them. As their competitors, or position is the inverse of theirs: a few of our citizens are harmed by their subsidies, but the many benefit far more than those few suffer.

Thus, the appropriate policy response to a subsidy is to offer aid to those harmed, and help them transition to a new line of work. That allows us to enjoy the benefits of other nation's foolishness while minimizing the impact to those few among our citizens who got harmed by other nations' failure to "play fair".

Allowing subsidies maintains each nation's independence of action; it permits each country to choose their own poison, so to speak - to suffer from the adverse consequences of their own preferences. Allemande subsidizes its auto industry because cars are an important part of our culture, and because we want that industrial capacity available to us as part of our "military-industrial complex". You can do the same, if you want - or not. But this way, it's your choice - and that's a good thing.

Let me pay the price of my own convictions, and you can pay the price of yours. That is the Federalist/NatSov P.O.V., and its one that I wanted to respect in crafting this resolution. So no ban on subsidies here, by design.

I'm not sure you've thought about this enough... ;)

Seriously though - that's a good argument - I think you and I come at this from different directions.

At the end of the day, governments are left with the power to regulate nothing under our wonderful Real Life™ "free trade" rules. All because someone screamed about someone else getting a subsidy.

The above quote well represents my viewpoint. I would favour much less gov't involvement in regulating trade / business / life.

That being said - I accept your decision to not include subsidies - and will support your effort.

I would also support another's efforts to introduce a limit to domestic subsidies.

Cheers.
W.

That being said - I accept your decision to not include subsidies - and will support your effort.My grateful thanks, good sir (or madame).

My grateful thanks, good sir (or madame).

Should National Systems of Tax be repealed and this reach the floor, I would most definitely lend my support to this. Well done; obviously you've put quite a bit of effort into this.

While I understand that a great deal of effort has gone into this, I cannot support. I remain unconvinced of the value of free trade, particularly to a non-capitalistic nation such as Enn.

While I understand that a great deal of effort has gone into this, I cannot support. I remain unconvinced of the value of free trade, particularly to a non-capitalistic nation such as Enn.Let us make an effort to persuade you.

Let us assume - and you can correct us if you'd like - that Enn is a socialist society in which all economic activity is controlled by the government or agents thereof. Presumably, there's a Ministry of Trade that handles all imports and exports, and individuals are either forbidden from engaging in economic transactions (as we have defined them) or lack the means to do so (because your tax rate is 100% and people are provided goods [as we have defined them - which would include housing if we've written our definition properly] directly rather than being given cash or cash subsidies with which to "buy" what they need to survive; indeed, you probably don't even have cash).

Consequently, your society already complies with the resolution as written, insofar as there are no tariffs, duties, import taxes, quotas, or other trade restrictions in place under your nation's laws. This is because the only "buyer" or "seller" of goods in your country is the government, and it can - like any other consumer or vendor - buy or sell what it pleases, at whatever price it desires or can negotiate, in whatever quantities it wishes. The resolution doesn't hurt you or require you to change anything at all in the way your nation operates on a day to day basis.

But we will go further than saying that this resolution doesn't harm you, to make the claim that it actually helps you - by making other nations more prosperous and productive, and thus making you more prosperous and productive.

To do this, we will rely on a Real Life™ argument by a Real Life™ economist, Adam Smith. Smith, along with Ricardo, Hume, and Locke (the other "classical" economists) laid the foundations of trade theory back in the 18th Century. We don't know if you are Marxist, but we do know that virtually all of the work in the field of economics done by Marx was based directly on the work of the "classical" economists we've mentioned. Indeed, Marx not only fails to refute their findings - he doesn't even try; he embraces them and uses their work as the foundation for his own!

If there is one striking aspect, then, of the field of economics, it is this: no one challenges the work of the Smith and his peers. Left, right, centre, up, down, or strange, these works are the foundation of all modern political-economic systems.

In The Wealth of Nations, then, Smith establishes this simple principle: free trade permits optimal specialization among national players in the field of international trade. Without trade, each nation must attempt to fend for itself, providing its people with all of the goods they need for survival or desire for creature comforts. Lands with short growing seasons must still grow food, even if this requires an exorbitant amount of effort or resources on their part. Lands without skilled craftsmen must accept poorer quality finished goods and live with the consequences.

But with trade, nations may specialise according to their resources and talents. The example that Smith uses is of England trading wool for Portuguese wine; the exchange permits England to enjoy better wine and Portugal to enjoy cheaper wool.

What is interesting is that where trade is conducted strictly between nations - as would be the case among socialist states - rather than individuals, it is easy to demonstrate via Smith's logic that each nation benefits from the trade. Only when we introduce the complication of individuals acting within the marketplace as individuals do we run the risk of seeing some people "hurt" by "unfair" competition from overseas. In short, the problem of unemployment due to foreign trade is strictly a capitalist problem.

Reducing barriers to free trade will allow Enn to focus its productive resources on those things Enn does best (productive specialisation). If all nations do this, and then offer the goods they produce "barter" (IOW, trade) to other nations within the general free trade system, all will find themselves with more of everything, resulting in an increase in the general standard of living.

I like it.

I've said this elsewhere, but today (and tomorrow) are a perfect time to submit a proposal from a telegramming point of view - 3 proposals in quorum with 200+ endorsements. It's a good proposal, so I think you'll get about a 50% success rate - which should get you to quorum if you telegram all of these (make a list so you don't duplicate).

I say go for it ASAP...

I like the idea, and it's actually international in scope, but something is bugging me about it and I can't put my finger on it. I'll need to give this proposal more thought, but congratulations to the fine nation of Allemande on an excellent idea for a resolution. We need more good ideas for those. :)

I like the idea, and it's actually international in scope, but something is bugging me about it and I can't put my finger on it. TG me when you put your finger on it. :)

OOC: Yipeeeeee! My 400th post. I am now "Sometimes Deadly"! :D

Allemande: That was one of the most eloquent and persuasive posts I have ever read. You've gained a supporter.

Allemande: That was one of the most eloquent and persuasive posts I have ever read. You've gained a supporter.
OOC: Indeed. I'm going to take this to the Coalition of AntiCapitalist Economies to canvass opinion, not least because I'm uncertain of how it affects the International Fair Trade Agreement.

Ecopoeia is not a supporter, but I wouldn't rule out a change of heart.

If there is one striking aspect, then, of the field of economics, it is this: no one challenges the work of the Smith and his peers. Left, right, centre, up, down, or strange, these works are the foundation of all modern political-economic systems.

"One of the great intellectual achievements of the twentieth century... was to establish the conditions under which Adam Smith's "invisible hand" worked. These included a large number of unrealistic conditions... Though everyone recognised that these assumptions were unrealistic, there was a hope that if the real world did not depart too far from these assumptions... then Adam Smith's invisible hand theory would still provide a good description of the economy. This was a hope based more on faith - especially by those whom it served well - than on science."

Quoted from The Roaring Nineties by Joseph Stiglitz, who is also critical of Smith's idea that "a rising tide lifts all boats". Stiglitz is a Nobel Prize winner for economics, a former World Bank president, and was head of the Council of Economic Advisors under Bill Clinton - clearly, someone who carries quite some credibility in the economic community. Perhaps this is not a direct challenge, but it is just as clear to me that Adam Smith's theories are not perfect and even if they were truly undisputed, should not in any case be relied on. Remember, for a long time it was undisputed that the Earth was flat and remained stationary while the Sun and the planets revolved around it and the stars were holes in a giant celestial colander outside which burned divine heavenly light.

You are correct, of course to say that Smith's work has formed the basis of modern economics, but that doesn't mean it is indisputably correct.

I am not, of course, opposed to the idea of trade, and neither will I dispute that it brings a great deal of benefit. But unfettered trade like you propose is not something that can or should be simply imposed on everyone. The first and most obvious is that the shock of a sudden imposition of free trade will be extremely damaging to economies. Just a casual glance at the havoc wreaked on the former Soviet economies by the sudden transition to capitalist economy is telling.

You argue that tariffs should be eliminated, but subsidies should not. However, I am not convinced at your explanation for this inconsistency. Surely they add up to the same thing? One restricts trade directly by taxing it, the other restricts it indirectly by disadvantaging it. You also imply that subsidies are not "playing fair". Yet surely you also recognise that in some cases, subsidies are introduced to make things "fair" and erode inherent competitive advantages certain imports might have? You acknowledge that for some reasons nations might want to preserve certain industries, yet you still argue:

Reducing barriers to free trade will allow Enn to focus its productive resources on those things Enn does best (productive specialisation). If all nations do this, and then offer the goods they produce "barter" (IOW, trade) to other nations within the general free trade system, all will find themselves with more of everything, resulting in an increase in the general standard of living.

So which is it you're going for? If you want everyone to be doing productive specialisation, you're going to have to let that car industry go, aren't you? It'd be easier if you clarify what your actual stance is.

ICly, Kelssek is a social democratic state, though more socialist that that term usually implies. As IFTA (International Fair Trade Agreement) members we refuse to trade with any nation not also a member, and membership requires the introduction of regulations mainly aimed at ensuring employees' rights, such as living wage legislation, limits on working hours, and worker safety. We would be interested, as would our fellow IFTA and CACE members if requiring certain standards of a trading partner and refusing to trade with other nations constitutes a violation of the proposal.

OOC: This has been submitted. I will not be back online until Monday, when I will probably have to resubmit this.

Over the weekend, I hope to write an initial argument and answer some of the questions raised about this proposal. In the meantime, if you want to see any kind of trade protocol enacted, please vote to repeal NST!

OOC: Well, after careful consideration, I found the following.

1. I don't favor the style used, but the style isn't doing it any harm either so there's no need to change it to suit my personal preferences.

2. My major objection to this is that it will interfere in the roleplay of a certain intra-regional organization one of my puppet nations is a member of. The organization in question established a common market of its own and places restrictions on trade with nations outside of it, and some of those nations both within the organization and without it are members of the UN, which presents a potential problem vis a vis this proposal.

My major objection to this is that it will interfere in the roleplay of a certain intra-regional organization one of my puppet nations is a member of. The organization in question established a common market of its own and places restrictions on trade with nations outside of it, and some of those nations both within the organization and without it are members of the UN, which presents a potential problem vis a vis this proposal.Not much I can do about that, although I believe I was careful not to force players to break MFN or free trade agreements with non-UN states. For now it looks like the biggest problem would be nations that have arrangements with other nations that restrict or prevent trade outside of the arrangement.

As I don't see a way of reconciling such agreements with the proposed Common Market, I would just hope that nations in such agreements could accept the entire Common Market as a "participant" in these agreements. But obviously some won't, and they'll vote against it.

Do you have an alternate style that you think would work better? I'd be interested in seeing that...

Resubmitted

Tex, I'll still look at any proposed style changes you offer... I doubt we'll make quorum on this pass because I can't throw my weight behind a TG campaign until this weekend...

Bumpbed, because this s an important peice of legislation that would give some meaning to being in the United Nations.

Lanquassia supports this bill wholeheartedly.

Bumpbed, because this s an important peice of legislation that would give some meaning to being in the United Nations.

Lanquassia supports this bill wholeheartedly.Thanks. I'll re-submit. but I'm sorry to say that it's probably going to die. Reason: I can't realistically stay in the U.N. after Resolution #113 becomes law - not if I'm going to RP Allemande properly.

And Allemande's replacement isn't going to care much about Free Trade, I'm sorry to say.

Now, if you want, I'll stick around to argue in favor of both the Common Market and the Collective Security Framework. Someone else will have to sponsor them, however.

<pause>

Hmmmm. Maybe I can role-play having a "Public Interest Section" here as part of another nation's embassy.

Anyway, for now I'll stick around and massage my ideas (I have one other I'll offer as well), since I'm not resigning my seat at the NSO (which accepts both Members and non-Members).

Oh, and Lanquassia: check the Bioweapons Thread - there's information there relative to our emerging scientific and political relationship.

Thanks. I'll re-submit. but I'm sorry to say that it's probably going to die. Reason: I can't realistically stay in the U.N. after Resolution #113 becomes law - not if I'm going to RP Allemande properly.

And Allemande's replacement isn't going to care much about Free Trade, I'm sorry to say.

Now, if you want, I'll stick around to argue in favor of both the Common Market and the Collective Security Framework. Someone else will have to sponsor them, however.

<pause>

Hmmmm. Maybe I can role-play having a "Public Interest Section" here as part of another nation's embassy.

Anyway, for now I'll stick around and massage my ideas (I have one other I'll offer as well), since I'm not resigning my seat at the NSO (which accepts both Members and non-Members).

Oh, and Lanquassia: check the Bioweapons Thread - there's information there relative to our emerging scientific and political relationship.


If I could submit proposals, I would be happy to sponser them.... ;_;

And check the TG I sent you. I will, however, check the Bioweapons thread.

I've approved this, but once I withdraw Yelda from the UN the approval will disappear I suppose. I will re-approve it later as "Yeldan UN Mission".

It is sad so see such great nations seriously considering leaving the UN because of the travisties of this supposed bioweapons ban. I cannot see how protest by removing ones ability to vote out this bill if it passes accomplishes much, other than protecting our people. Is there no way to maintain UN Membership and be civily disobedient, as our people sometimes are, to protest laws we know to be illegal?

I would hope there is some way to keep up the good fight, and even though Galhøppigen may not support all of Allemande's resolutions, we do support the Common Market and Collective Security Framework.