NationStates Jolt Archive


Everything You Need To Know About Trade

Euroslavia
15-06-2005, 23:14
Everything You Need To Know About Trade (and More!)

Table of Contents
• NS and RL Trade; Comparisons
• Imports and Exports
• Trade Deficits and Surpluses
• Tariffs, and their Effects on your Nation/Nations Trading with you
• Embargoes
• Blockades


NS and RL Trade; Comparisons
The comparisons between Nationstates trade, and Real Life trade has many differences, with plenty of nations declaring themselves completely independent of trade, in Nationstates. Within Nationstates, thousands upon thousands of nations exist, from modern to space tech; however, one thing that I, as well as others have noticed is the lack of the RP’ing of trade; though I do realize that some nations just imply that it is already happening, without the use of RP’ing.

Real Life Trade Organizations
• World Trade Organization (WTO).
• General Agreement on Tariffs and Trade (GATT).
• Free Trade Area of the Americas (FTAA).
• Western Hemisphere regional trade pacts.
• North American Free Trade Agreement (NAFTA).
• European Union (EU).
• East and Central Asian Markets (APEC and ASEAN).

NationStates Trade Organizations
• KIST: Trade Network Organization (http://forums.jolt.co.uk/showthread.php?t=329820)

Imports
-International trade is defined as trade between two or more partners from different countries (an exporter and an importer). Early international trade consisted mostly of barter transactions.
- To receive goods from a foreign country.


Exports
-In economics, an export is any good or commodity, shipped or otherwise transported out of a country, province, town to another part of the world, typically for use in trade or sale. Export products or services are provided to foreign consumers by domestic producers.
-commodities (goods or services) sold to a foreign country


For both imports and exports, each nation has to specify what their own country needs, and what their own country can afford to give to other nations who need that resource. In NationStates, there are thousands of nations that can supply you with trade, so take advantage of it, and trade with multiple nations. Trade is always a good ice-breaker, in getting to know another country diplomatically.

One thing that you need to remember is to keep it realistic. If you look at this thread: http://forums2.jolt.co.uk/showthread.php?t=390671 by Praetonia (List of Imports/Exports), specifically looking at his first post, you'll see this:



Produces:
Oil [30% of national requirement]*
Tea [5% of national requirement]*
Gold [530% of national requirement]
Iron [210% of national requirement]**
Coal [155% of national requirement]**
Staple Foods [21% of national requirement]*
Luxury Foods [87% of national requirement]*
Uranium [124% of national requirement]
Nickel [84% of national requirement]*
Zinc [102% of national requirement]
Plutonium [123% of national requirement]
Titanium [234% of national requirement]
Platinum [94% of national requirement]*
Natural Gas [76% of national requirement]*
Silver [110% of national requirement]**
Steel [670% of national requirement]**


* = Looking for imports
** = Available for export

If you notice this, you'll see that Praetonia has certain products that it has an overabundance of, such as Steel, titanium, gold, and iron, while there is a need for natural gas, staple foods, tea, and nickel.


Trade Routes: All by sea (island).

Imports / Exports:


Staple Foods [Artitsa; 82% of national requirement]
Luxury Foods [Artitsa; 75% of national requirement]
Oil [Hamptonshire; 24% of national requirement]
Tea [Sarzonia; 42% of national requirement]
Oil [Ottoman Khaif; 12% of national requirement]
Tea [Ottoman Khaif; 25% of national requirement]
You'll also notice here that Praetonia lists their current trading routes, with the nation they are trading with, and what they are trading for/sending out.


Trade Deficits and Surpluses; and Their Effects
Trade deficits and surpluses are a bit more complicated than the previous categories. I’ll use a RL example to explain what each will do to you, and nations you trade with.

With the USA’s current trade deficit, markets all across the world, mainly in Asia, where most of the nations in that region depend on US exports more so than in other areas of the world. Contrary to popular conception, the trade deficit is not caused by unfair trade practices abroad or declining industrial competitiveness at home. Trade deficits reflect the flow of capital across international borders, flows that are determined by national rates of savings and investment. This renders trade policy an ineffective tool for reducing a nation's trade deficit.


One of the most politically volatile consequences of the financial and economic turmoil in the Pacific Rim will be a rising U.S. trade deficit. Plunging growth rates in the region will mean less demand for U.S. exports, while falling foreign currency values will make Asia's exports to the United States more affordable, spurring demand by American consumers. The result, widely predicted by economists, will be a mercantilist's nightmare: a growing gap between the value of the goods and services we import and the value of what we export.

In other words, the US imports from Asia will be cheaper, and the US exports to Asia will become much more expensive, leading to a huge gap in what is deemed as an equal trade.

To sum it all up, the United States has basically been importing more than it has been exporting, which gives the US a trade deficit with trading partners world-wide; however, that doesn’t mean that the US has a deficit with each individual country that it trades with. A better example would be China, who had a trade deficit in 2004 world-wide, but still had a trade-surplus with the USA, because the products that they export to the US are products that are mass-purchased, such as clothing, shoes, etc; whereas the US exports a smaller amount of items that are much more expensive, such as computer technology.

A creative way to determine if your nation is at a trade surplus or deficit is to go here: http://nseconomy.thirdgeek.com/ and type in your nation in the “Find Nation” category, and Third Geek will be able to determine if you have either of the two. This isn’t the only option though, you can choose to roleplay your nation as having either one, whichever you would find more interesting.

Knowing this, you could always roleplay an economic crisis for your nation, in which the trade deficit reaches the highest mark in your nations’ history, and your currency begins to lose its power. At the same time though, if your economy is growing extremely fast, you could always roleplay a surplus and have your currency gain against your rivals.

Tariffs, and their Effects on your Nation/Nations Trading with you
A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. A revenue tariff is set with the intent of raising money for the government. A protective tariff, usually applied to imported goods, is intended to artificially inflate prices of imports and "protect" domestic industries from foreign competition. The distinction between protective and revenue tariffs is moot; revenue tariffs offer protection, and protective tariffs produce some revenue unless they are prohibitive in which case little or nothing is imported of that product, thus resulting in trivial or no revenue.

Tax, tariff and trade rules in modern times are usually set together because of their common impact on industrial policy, investment policy and agricultural policy. A trade bloc is a group of allied countries agreeing to minimize or eliminate tariffs against trade with each other, and possibly to impose protective tariffs on imports from outside the bloc. A customs union has a common external tariff, and, according to an agreed formula, the participating countries share the revenues from tariffs on goods entering the customs union.
If a country's major industry collapses due to foreign competition, the loss of jobs and tax revenue can severely impair parts of that country's economy. Protective tariffs have been used as a measure against this possibility. However, protective tariffs have disadvantages as well. The most notable is that they increase the price of the good subject to the tariff, disadvantaging consumers of that good or manufacturers who use that good to produce something else: for example a tariff on food can increase poverty, while a tariff on steel can make automobile manufacture less competitive. They can also backfire if countries whose trade is disadvantaged by the tariff impose tariffs of their own, resulting in a trade war and disadvantaging both sides.
Some economic ideologies hold that tariffs are a harmful interference with the laws of the free market. They believe that it is disadvantageous for a country to artificially maintain an inefficient industry, and that it is better to allow it to collapse and to allow a new one to develop in its place. The opposition to all tariffs is called the free trade principle; the World Trade Organization aims to reduce tariffs and to avoid countries discriminating between other countries when applying tariffs .
This is another thing that really isn’t talked about when trade takes place between 2+ nations in NationStates. If you want to get specific, and into the trading aspect of the game, I’d suggest you do some research on tariffs, and the current rates that the US places tariffs on their imports.

Embargoes
In international commerce and politics, an embargo is the prohibition of commerce and trade with a certain country.
It is usually declared by a group of nations against another one, in order to isolate it and to put its government into a difficult internal situation, given that the effects of the embargo are often able to make its economy suffer from the initiative.
The embargo is usually used as a political punishment for some previous disagreed policies or acts, but its economical nature frequently leaves space enough for doubts about the real interests that the prohibition gives advantage to.
With thousands upon thousands of nations across NationStates, a declaration of an embargo by one nation really won’t do much (if it isn’t the other nations’ closest ally). If you’re trying to have some sort of effect on an enemy nations’ economy, you’re going to have to get together a decent group of nations to join you, and embargo the enemies’ products.

Blockades
A blockade is an effort usually (but not always) at sea, to prevent supplies from reaching the enemy.
A blockade is also the attritional aspect of a siege, with the besiegers preventing food supplies from reaching the besieged. If the siege lasts long enough, defenders and civilians are reduced to eating anything vaguely edible to avoid starvation—family pets, the leather from shoes, and even each other, if the effects of the blockade are that serious.
Blockades are roleplayed often on NationStates; however, most people don’t take into mind the full effects of how badly it can cripple your nation. A successful blockade by sea, and by land (if you are bordering any other nation(s)) would almost immediately send that nation into a buying frenzy, and has the possibility of sending the civilian population into revolt, to stop the blockade. There are many adverse effects of being on the receiving end of a blockade.

Closing Statement
It is with hope that if other people read this thread, that they become interested in the many faces of trade, and national decisions (such as tariffs, embargoes, and blockades; and their effects). These things are rarely roleplayed; however, they can prove to become some of the most interesting roleplays possible. Give it a shot, read a little more about trade, and come up with a great idea, such as roleplaying trade with your ally, discussing trade with a newly introduced national leader, or some of the many other ideas on here. Remember; don’t just declare a trade embargo or a blockade just because you want to. There needs to be some sort of political tension between you and the other nation for that to happen in the first place, realistically that is. Perhaps you and a friend could discuss having such an RP together.

OOC: I plan on adding much more, esp. NS examples of each, but Word tends to eat my documents, so I'm posting it here, so I can edit it in a bit.
Japanese Antarctica
15-06-2005, 23:29
Bravo Euroslavia. Don't forget to add in currency value and buying power later.
Euroslavia
15-06-2005, 23:31
Bravo Euroslavia. Don't forget to add in currency value and buying power later.

Great idea, I'll add those in asap.
Euroslavia
16-06-2005, 00:38
.::BUMP::.
Blessed Misfortune
16-06-2005, 01:11
bump
Euroslavia
16-06-2005, 14:26
.::BUMP::.
Japanese Antarctica
16-06-2005, 14:35
Another suggestion, though this one may be out of scope.

http://ingrimayne.saintjoe.edu/econ/LogicOfChoice/Figure7.3.gif

Give an explanation on "Guns and Butter" and the consequences of choosing one over the other.
Euroslavia
17-06-2005, 04:26
.::BUMP::.
The Macabees
17-06-2005, 04:39
[OOC: Nice job.]
Sanctaphrax
17-06-2005, 07:53
Brilliantly done as usual Euroslavia. Great job.
Lanquassia
17-06-2005, 08:23
Question:

Is there any guideline as to your nations imports/exports?
Vastiva
17-06-2005, 09:48
OOC Very nice.
Vastiva
17-06-2005, 09:50
Question:

Is there any guideline as to your nations imports/exports?

OOC: Well, I used what was actually in the land(s) I own, and my cultural needs as a basic template, modified by what my region and other trading partners want and what I've rp'ed. But you can do it however you want.
Lanquassia
17-06-2005, 10:03
OOC: Well, I used what was actually in the land(s) I own, and my cultural needs as a basic template, modified by what my region and other trading partners want and what I've rp'ed. But you can do it however you want.

OOC: Thanks. I've been awaiting a reply to that question for several hours. :headbang:

I thought as much. Mm. I might steal someone's.
Euroslavia
17-06-2005, 16:03
OOC: Thanks. I've been awaiting a reply to that question for several hours. :headbang:

I thought as much. Mm. I might steal someone's.

OOC: Apologies for not being at my computer 24/7. :p

But seriously, it probably isn't a good idea to steal someone elses. If you don't want to come up with a list of your own, check out some of the RL countries on www.cia.gov and check out the World Factbooks of each country, and which would suit you the best.
Vastiva
18-06-2005, 09:07
OOC: That would be our method. Though for some colonies, we had to work with approximations. See also the trade thread.
Euroslavia
19-06-2005, 17:33
.::BUMP::.
Euroslavia
21-06-2005, 22:56
.::BUMP::.
Intracircumcordei
19-12-2005, 09:48
I notice that I can't locate my state via that due to 'too many states in region' to load.


Is there a work around for this?

I'm geussing as stated the economic capacities are out of the original scope of the game?

I'm not going to do a include this include this as it is obviously known how expanding the system to include trade.. and to a lesser degree military can alter the actual game.

Also the 'size etc.. isnt' outlined. Any maps etc.. kicking around or is this totally unrealistic.. anyway.. I geuss I'll just make my own trade etc..
Praetonia
19-12-2005, 10:11
This is quite a nice guide. Some things I would mention:

1) Thirdgeek isnt terribly good at calculating trade surpluses / deficits. It seems to draw them up purely in inverse proportion to your GDP, which seems a little silly.

2) I take your point on embargos, with there being thousands of nations, but I would probably call it bad form for a nation to claim that they can get out of any affects of an embargo by claiming unRPed trade with non-RPing nations, or nations that only RP on other forums. I would have thought that a major RPing nation embargoing someone would have an affect, and an embargo by an alliance would have a major affect.

3) Not sure if it's within the scope of this thread, but you could add something about RP ettiquette and trade. Such as, it's bad form to claim that you have every possible raw material in your nation, and also add something about the ill-effects of not trading even if you have all these raw materials, being that you cant export your goods so your economy will be weak, and you cant import so stuff will be more expensive.
Antanjyl
19-12-2005, 10:38
::Tag::
Iuthia
19-12-2005, 14:34
2) I take your point on embargos, with there being thousands of nations, but I would probably call it bad form for a nation to claim that they can get out of any affects of an embargo by claiming unRPed trade with non-RPing nations, or nations that only RP on other forums. I would have thought that a major RPing nation embargoing someone would have an affect, and an embargo by an alliance would have a major affect.

It's been generally accepted by many RPers for quite some time that embargoes don't have any serious effects to your nation unless the two nations have previously RPed such trade or simply agree and want to roleplay it's effect.

As for 'bad form' thats really down to the individual, while some may be annoyed that their economic might is being ignored, others like myself accept that frankly there are too many nations that are willing to trade with pretty much anyone because they like to think of themselves as completely free trade. Easy examples of this using RP nations alone include 24 nations (easily concidered 'major RP nations' simply because they are large nations who RP) in KIST that have registered as Free Trade.

Personally, I wouldn't expect someone to care about an Iuthian embargo unless they were in my region (and thus likely trading with me to some extent) or they had RPed with me such connections such as seen in my own trading threads and OOC agreements with players. Though it's worth noting that in such cases it works both ways and a lose would be seen in both nations unless you prepared before it... which would give hints as to your intentions.

As always, it's down to the individual players to work out how important an embargo is to them. I couldn't care less if some inflated ego assumes they have influence over my economy if they haven't at the very least done some back checking to make sure.
Iuthia
19-12-2005, 14:50
I geuss I'll just make my own trade etc..

Best bet, I find, is to more or less think about what your nations concept and try and think what it is mostly likely to produce and need. As for exact figures... personally I have given up on being exact as my nation is constantly growing (I'm still concidering whether or not I should RP a lower population) and frankly I don't have the will or the background knowledge required to exactly state my nations budget.

So long as your aren't going out of your way to be better then anyone else or trying to win the game, then it simply doesn't matter that much. You get a basic idea of your nations economic power from the Nationstates page, if its Frightening then there is a good chance you have a powerful enough economy to hold your own again most nations. Leave the specifics to the number chrunchers I say and get on with RPing your nation, using the basics as a indicator to build around... if you aren't happy with those basics then you can use the game to change them using issues, it's what NS is about.

But meh, 'tis just my opinion. I'm tired of getting caught in the minutae of budgets, designs and logistics... so long as we're reasonable and we don't forget the basic lessons inherant in all of them (such as you don't have unlimited resources, your tank isn't invincible and your army needs supplies to keep working) then it shouldn't be too important if we aren't 100% correct.
Bertling
29-03-2006, 01:53
frankly I don't have the will or the background knowledge required to exactly state my nations budget.

There are several sites that will do this for you. http://www.pipian.com/stuffforchat/gdpcalc.php?nation=?????? is one. Delete the questionmarks and insert your nation's name.

BTW, thanks to Sarzonia for giving me a few pointers. It is appreciated:)
Franberry
29-03-2006, 02:08
Excellently Done
Blouman Empire
11-12-2007, 16:33
This is excellent work but you just talked about tariffs as an impendiment to trade that is imposed by the home country, you should also include an Non Tariff Barriers to Trade (NTBT) these iclude but not limited to:
Import Quota/Voluntary export restraint
Traiff Quota
Loca content and mixing requirements
Product and Technical standards
Import licensing
Government Procurement
and forgotten the proper name but restrictions on imports due to some precieved or real defect with the imported product this is placed on food e.g fireblight on apples foreign apples are not allowed to be imported from countries with this disease as it may risk the local industry