[rootoronpunty]

It'd be better if they'd use their energy to get the WTO negotiations going again.

[11Pecepebra]

A Trans-Atlantic Economic Union, which included the EU, Canada, Mexico, and the US is something I have long hoped for. I'm glad people are talking about ideas that are baby steps in that direction. Nice.



-=Vel=-

[iroxmxinau]

Nah. Screw that...

[barsikjal]

What's the point?

The US only respects the parts of free trade they like. Any parts they don't will be ignored. See softwood lumber 'free trade'.

[FoetAgerhot46]

They subsidize thier lumber and are pissed we slapped a tarrif on it.

[wonceinee]

The French would never go for this. Sorry.

And if they did go for this, they would also go for another round of WTO liberalization, making the NATO economic zone have limited value.

[DownloadMan]

It's not only about trade, it's about economic strength overall, and this has political impact. This is in fact one of the main reasons for the existence of the EU.

[GrottereewNus]

Originally posted by Arrian
That really is a big deal up there, eh? I know precisely nothing about it (other than you all seem pissed about it).

-Arrian If a foreign government had stolen 5 billion$ from you and was now generously offering to give 4 billion back wouldn't you be pissed too?

[FelixQY]

What makes you believe that China will alway be nice and fair?

[jisee]

shut up indian !

pay the children that labour in your factories properly and maybe markets will open up...

[Dabdklwu]

The original NAFTA was proposed by Eisenhower in the 1950's only instead of meaning the North American Freetrade Agreement Eisenhower was proposing a North Atlantic Free Trade Agreement. The Europeans balked at the idea and France especially prefered to work on a European Free Trade Zone.

[Fdhwzctl]

Originally posted by VetLegion
Errr, Mexico?

EU + Canada + US would be smooth though Mexico would be a bigger economic benifet to a North Atlantic Free Trade Zone then a certain small Balkan country you hail from.

[eduptultyt]

Originally posted by Colon™
Ok, now that I have time to elaborate: free trade deals that are restricted in territorial extension are inherently worse than global free trade deals, and may even be worse than no free trade deals at all. Why? Because it may lead to trade diversion rather than trade expansion and this diversion may not favour those that produce a given good most efficiently.

Example: country A can buy hammers from country B and country C. It mostly chooses to buy from country B because they produce those hammers 20% more cheaply. Country A also raises an tariff of 30% to all imports of hammers.
After a while country A and country C decide they want a closer relationship and therefore negotiate a free trade deal that removes all tariffs on the imports of hammers from country C. This means country C is now 10% cheaper than country B and the result is that country B sees its exports of hammers fall, even though they're a more efficient producer.

That's trade diversion, and it makes a mockery of the principle that the most efficient producer should win out, no matter where it's located. Granted a transatlantic free trade zone would be somewhat less worse than a bilateral one, because it involves more producers, but it's still inferior to a global free trade zone. The WTO is dedicated to removing trade barriers world-wide. A transatlantic zone may be good mercantilistic politics but it's not good economics. Exactly. QFT.

Trade diversion

[Mmzmptvk]

Originally posted by VetLegion
Errr, Mexico?

EU + Canada + US would be smooth though Cant we just invite Canada to the EU?

pay the children that labour in your factories properly and maybe markets will open up... Beats working in an asbestos mine without protection

[Wvq9InTM]

Originally posted by Arrian


Stolen?

If a friend, ally, neighbor (say, oh, Canada) had put tarrifs on US goods and then offered to meet us 4/5th of the way in order to resolve the dispute I don't think I'd be all that pissed off, unless perhaps it cost me or someone I knew a job.

Again, not knowing the exact details, perhaps I'm wrong. Canada's position I take it is that the US had absolutely no justification whatsoever for the tarrifs?

-Arrian Its very complicated. The NAFTA panels generally supported Canada, but WTO panels supported the US position, and the legal questions about the various panels, who had authority, etc were rather complex IIUC. That it ended with a compromise was probably best for all concerned, but certain Canadians like to whine, on the presumption they are 100% right in a complex case. Since the compromise was implemented by a particular Canadian govt, I suspect many opinions about it are tied to internal Canadian politics, among other things.

[addifttiest]

Not wholesale mercantilistism, but it certainly contains a strong mercantalistic edge to it, since such a bilateral deal benefits the participants at the expense of the outsiders (even though this may not be the intention).
Bilateral deals may not be 2nd best, exactly because they may lead to an net outcome that's worse than the prior situation, due to trade diversion. And if we assume participants are better off than previously, there will still be missed opportunities, which are also costs.

Considering diplomats have limited resources and time, it'd be far better to invest these in seeking after global deals that may only partly lower trade barriers, than it would be to invest in seeking after bilateral deals that may fully lower trade barriers - because global deals solely lead to creation of trade and not to diversion.

In the case of a NATO free trade zone, such substantial energies would have to be devoted in reconciling the Franco-American positions, that you might just as well do it for the purpose of getting the WTO-negotiations going again.

[tattcasetle]

Originally posted by lord of the mark

Its very complicated. The NAFTA panels generally supported Canada, but WTO panels supported the US position, and the legal questions about the various panels, who had authority, etc were rather complex IIUC. That it ended with a compromise was probably best for all concerned, but certain Canadians like to whine, on the presumption they are 100% right in a complex case. Since the compromise was implemented by a particular Canadian govt, I suspect many opinions about it are tied to internal Canadian politics, among other things. Uhh, no.

To begin with, WTO have not generally agreed with the US position. WTO rulings have been mixed.

Meanwhile, other panels that have included Americans have unanimously agreed that the American case is baseless.

And actually, it really is pretty simple. Most lumber in certain provinces (including BC, our largest producer) is publically owned. The province auctions off rights to certain pieces of land for logging rights and also charges a rate per unit when the trees are actually cut.

The Americans argue that the fees charged are too low. We say bullshit, and both NAFTA and WTO rulings have generally gone our way. The rates are low because of basic economics. Supply and demand. There are oceans of timber in Canada, of course the fees charged for any given cut are low compared to those in a state that could be fit in a single stand of a Canadian forest.

Anyways, what has Canadians from coast to coast in a nose-out-of-joint state is that the US administration makes noises about ignoring NAFTA panel rulings whenever they don't agree with them. We win a ruling, we are told to come back to the negotiating table. Negotiate what? We should negotiate away the natural advantages we enjoy in an industry when it might be a lonely example of an industry where we have an advantage due to geography?

The spectacle of an American administration saying that NAFTA panel rulings mean squat leads many Canadians to have negative feelings about the prospects for 'free trade' with the US. And yes, it is political. There are now two significant parties campaigning on renegotiating or getting out of NAFTA. However, even supporters of free trade are pissed at how softwood has been handeled by your government(s).

The view is that America talks a good game of free trade, but when push comes to shove you can't walk the walk.

[zCLadw3R]

Originally posted by Arrian
That really is a big deal up there, eh? I know precisely nothing about it (other than you all seem pissed about it).

-Arrian It's been going off and on for 25 years and it makes America look hypocritical on the topic of free trade.

It is highly annoying and worrying given that we signed onto a deal that has seen us make large adjustments to participate in continental free trade.

[irrascaft]

Originally posted by Colon™
Not wholesale mercantilistism, but it certainly contains a strong mercantalistic edge to it, since such a bilateral deal benefits the participants at the expense of the outsiders (even though this may not be the intention).
Bilateral deals may not be 2nd best, exactly because they may lead to an net outcome that's worse than the prior situation, due to trade diversion. No. Net outcome can't possibly be worse. It's impossible to achieve a worse outcome by reducing barriers to trade, and it is completely irrelevant between whom the barriers are reduced, their relative size, and so on.

I don't know where you got "trade diversion" from, but it's got nothing to do with theory or practice of international trade

[allaboutauto.us]

Originally posted by VetLegion
I don't know where you got "trade diversion" from, but it's got nothing to do with theory or practice of international trade It does.


Originally posted by TCO
Colon any freeing of trade regardless of preferentiallity is beneficial to the overall system. Not in all cases - the additional benefit from the removal of tarriffs may be outweighed by the loss of tarriff revenue that the importing country enjoyed before trade diversion to the less efficient exporter.