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.
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.