Transatlantic Free Trade Zone?

[LordShiva]

Originally posted by VetLegion
Trade diversion, like job losses, is going to be concentrated in some industries without the ability to turn the net welfare increase (for a country joining a free trade zone) negative.

Trade diversion doesn't result in a concentrated loss (except in the country away from which the trade is being diverted, and they actually see no benefit, so it's not a case of concentrated loss vs. diffuse benefit over there, either) - the loss is in the form of foregone tarriff, the magnitude of which may or may not be larger than the consumer surplus from the lower price.

Well, I guess that could be a concentrated loss, if the tarriff revenue is going into someone's pocket.

[lord of the mark]

Originally posted by TCO


Read some Milton Freedman, you mercantilist, Democrat butt****. Who cares if they subsidize dump, pay for us to use it whatever. Let the buyer decide. THat is free enterprise. You commie.

well yeah. As a US consumer Id have been delighted if we had caved on softwood lumber. But thats not the point, the point is does the US position on softwood lumber show its not worth entering a FTA with the US, cause the US will ignore it whenever it suits the US govt. I believe thats incorrect - to prove that you have to show not that letting Canada subsidize is net good for the US, nor even that Canada is substantially in the right, but that there wasnt a trace of legitimacy to the US position, and that it was 100% arbitrary. Given the mixed rulings, controversies over makeups of the NAFTA panels , etc. I think thats hard to sustain. Now as someone who values our relations with our northern neighbors I dont want to belabor the point, and id have been pleased had we offered them a better deal than we did. But I DO contest the notion that FTA with the US offers no advantages to trading partners. If what our Canadian friends are saying was so, then they should go to the various industries that lobby in Washington AGAINST particular FTA's that they are wasting their time and resources, since the US will ignore the FTA's anyway. I suspect theyd be laughed off of K street, since the lobbyists know that it will be very hard for THEIR industries to make as strong a case wrt subsidies as the US softwood lumber industry did.

[Wezil]

The US softwood industry has deep pockets to lobby your government. They now have $1 billion more to continue the assault (this deal is very short term).

[lord of the mark]

Originally posted by Wezil
The US softwood industry has deep pockets to lobby your government. They now have $1 billion more to continue the assault (this deal is very short term).

The textile industry has very deep pockets also. Why dont they just stop making such a stink against FTA's? Cause theyd be countered by the retail industry? But then the home construction industry has deep pockets as well.

[VetLegion]

Originally posted by LordShiva Trade diversion doesn't result in a concentrated loss - the loss is in the form of foregone tarriff, the magnitude of which may or may not be larger than the consumer surplus from the lower price.

Concentrated as in - it may be the case with automobiles, or bananas (which is an actual case in EU), and/or a couple of other products - but it can't be true across the board for all of goods traded.

[Dinner]

Originally posted by Flubber

hmmm-- if we auction off timber rights in an open auction that anyone can bid , isn't the resulting bid at market rates pretty much by definition?

The claim isn't that the auction price isn't fair market but that the "stumpage fee" is unfairly low. That is, the price of the stumpage fee is set by administrative action instead of by copetitive bid. The stumpage fee is what is charged in order to pay to have the forest replanted. In most of the world the logging company must pay the market rate to hire subcontractors to replant the logged forest but in Canada the government sets the fee.

The claim is that the set fee is way below fair market rate and that the government takes a loss on this in order to subsidize local timber production. The US is demanding that the replanting costs be competitively bid so that the true market costs are taken into account.

[pchang]

Its not Canada's fault

that the US government doesn't have squads of trained squirrels replanting our forests.

[notyoueither]

Originally posted by Oerdin


The claim isn't that the auction price isn't fair market but that the "stumpage fee" is unfairly low. That is, the price of the stumpage fee is set by administrative action instead of by copetitive bid. The stumpage fee is what is charged in order to pay to have the forest replanted. In most of the world the logging company must pay the market rate to hire subcontractors to replant the logged forest but in Canada the government sets the fee.

The claim is that the set fee is way below fair market rate and that the government takes a loss on this in order to subsidize local timber production. The US is demanding that the replanting costs be competitively bid so that the true market costs are taken into account.

Reforestation costs are generally paid by the logger in Canada.

Stumpage fees are a royalty on the trees cut, on top of the money paid for the rights to log on that land. It is generally pure 'profit' for the Crown.

Please explain this 'loss'.

[OzzyKP]

Whoa, I thought I clicked on the "world's most famous motor race" thread. I was thinking "holy **** this is the most derailed thread I've ever seen".