Gary Coffman wrote:
On Thu, 13 Nov 2003 06:06:27 GMT, "Ed Huntress" wrote:

IIRC, the way it went was that the US first made a claim that the stumpage
fees were artificially low because they were based on a cost basis that, as
you say, "paid expenses." In other words, no real-estate amortization costs,
no insurance costs, no profit on the capital represented by the land's
principal value.


Since the Canadian government didn't pay anything for the land, or the
air above it, or the water that flows across it, or the sunshine that falls
upon it, there are no real estate amortization costs. There are no insurance
costs because governments self-insure, and can only be sued if they
*permit* themselves to be sued. Governments aren't supposed to be
profit making operations so no need to make a profit either.

Note that all this applies to US government owned timber lands too.
If the US government *chooses* to charge more than the costs of
administering the sales, it is profiteering. If the US government
*chooses* to refuse to allow timber sales, it is perpetuating the
causes of the wild fires that recently swept through California, ie it
is causing an unconscionable build up of fuel, promoting a tree
density that fosters disease, and virtually guaranteeing catastrophic
fires.

Ideally, the governments of both nations would allow the unowned
resources of both their nations to be taken up into private hands
(homesteaded) so ordinary market forces could work.

Gary
Gary

Hi , well the Gov here does not own the land so it can sell logs but so
that we can have a place to camp, fish, hunt, hike etc . I sure would
not want them handing it over into private hands . This way I know my
grandkids will have the freedom to go enjoy what I have always had .
Trees regrow and will always be there .
Ken Cutt

"Larry Jaques" wrote in message
...
On Sat, 15 Nov 2003 02:25:48 GMT, "Ed Huntress"
brought forth from the murky depths:

My guess is that most of the readers here don't know much about New
Zealand's economy, and it would be useful here to inset a capsule
summary.
This is from Nationmaster, and I think it was written in late '01 or
early
'02:

"Since 1984 the government has accomplished major economic restructuring,
transforming New Zealand from an agrarian economy dependent on
concessionary
British market access to a more industrialized, free market economy that
can
compete globally. This dynamic growth has boosted real incomes (but left
behind many at the bottom of the ladder), broadened and deepened the

Wow, they have become JUST LIKE US!
(I wish the best of luck to the Kiwis for that.)



Many US sourced products are uncompetitive in the
world market anyway.

Right. That's why we have higher levels of exports than any country in
the
world.

I love that 180° agreement, Ed.

When you here a statement like the one above, it's almost always an
eye-opener to step back, think about what it means, and then look at the
actual numbers.

It's not a good idea to do this with the current Budget Office predictions
for US deficits or Social Security over the next five or ten years, however.
It will make you turn blue in the face. g

Ed Huntress

On Fri, 14 Nov 2003 18:03:42 GMT, "Ed Huntress" wrote:
"Spehro Pefhany" wrote in message
.. .
Mmm.. are there not licensing barriers for Professional Engineers,
construction contractors and such like? I think there are *some*
barriers, just not that many.

They really aren't barriers. They're just cases in which you may have to be
licensed in the state in which you practice. My wife went through that with
her teaching certificate. It's just a duplicative bureacratic procedure, not
a barrier against practicing her profession.

It would seem to be a violation of Article IV section 1 of the US Constitution.
That requires each state to provide full faith and credit for the acts of other
states. That's why, for example, your driver's license is good in any state,
not just in the state which issued it.

By the same measure, professional licenses obtained in one state should
be honored by all other states. But they aren't, because the licenses are
primarily a way of implementing state taxes on professionals. (Nearly two
thirds of the questions on the state electrical contractor's exam I took
were about taxes, and the forms required to be filed to allow the state
to collect them.)

Gary

On Sat, 15 Nov 2003 23:53:03 +1300, Malcolm Moore
wrote:


We can afford to import more from you but there are other countries
also vying for our business, and if you aren't marketing to us or if
your products are too expensive or if they are badly designed then
we'll buy from someone else. Simple as that.
Your suggestion above would involve a massive bureaucracy to monitor
trade flows in and out, and issue licenses. We don't have that level
of regulation.
Upon the subject of "import licensing" - any New Zealander who
remembers the 1960s and 70s will shudder at the thought. THey made a
few people very, very rich - those with the magic paperwork. You
couldn't bring in a car unless you had "overseas funds" (eg money in
the UK). The local assembled rubbish was on a take it or leave it
basis, with limited supply. heaters and radios were high priced
options. It was not unknown for dealers to buy back a 1 year old car
for more than the new one, as there was a shortage, and of course,
could charge whatever they wanted for an old heap of rubbish (or a now
one).
I can't see the US consumer or the large retailers standing for that
very long.
Geoff

"Gary Coffman" wrote in message
...
On Fri, 14 Nov 2003 18:03:42 GMT, "Ed Huntress"
wrote:
"Spehro Pefhany" wrote in message
.. .
Mmm.. are there not licensing barriers for Professional Engineers,
construction contractors and such like? I think there are *some*
barriers, just not that many.

They really aren't barriers. They're just cases in which you may have to
be
licensed in the state in which you practice. My wife went through that
with
her teaching certificate. It's just a duplicative bureacratic procedure,
not
a barrier against practicing her profession.

It would seem to be a violation of Article IV section 1 of the US
Constitution.
That requires each state to provide full faith and credit for the acts of
other
states. That's why, for example, your driver's license is good in any
state,
not just in the state which issued it.

"Full faith and credit" applies primarily to judicial proceedings.
Misinterpretation of Article IV is rampant. Take a look at 28 U.S.C. Sec.
1738-1739 for laws that reflect Court doctrine on the subject of "full faith
and credit." It's all about legal proceedings and court judgments.

You're more likely referring to the "priviledges and immunities" clause,
which is in Sec. 2. That's applied mostly to states discriminating against
non-residents in licensing, not in the states' authority to license.
Essentially, licensing is a states' rights issue, and the supposed
constitutional issue regarding states respecting each others' driving
priviledges is primarily a matter of practice that grew up without Court
challenges, and is today called the "driver's license model" of comity under
Article IV. The Court has never directly ruled on it as far as I know.

In other words, you'll find no legal comfort there, nor any Constitutional
history to support your view.


By the same measure, professional licenses obtained in one state should
be honored by all other states. But they aren't, because the licenses are
primarily a way of implementing state taxes on professionals.

That's a supposition on your part. Firstly, professional licensing has a
history that goes back to common law, and there is nothing in the
Constitution about it. So the states enact licensing laws for a variety of
reasons, under the doctrine of states' rights.

(Nearly two
thirds of the questions on the state electrical contractor's exam I took
were about taxes, and the forms required to be filed to allow the state
to collect them.)

Maybe you can be a tax consultant now. g

Ed Huntress

On Sat, 15 Nov 2003 03:05:00 -0800, Ken Cutt wrote:
Gary Coffman wrote:
Ideally, the governments of both nations would allow the unowned
resources of both their nations to be taken up into private hands
(homesteaded) so ordinary market forces could work.

Hi , well the Gov here does not own the land

That's true, it doesn't, but the arrogant bureaucrats of the BLM, Forest
Service, and Park Service act as if they do, at least until it is time to pay
the property taxes. Then they sing a different tune.

Gary

"Malcolm Moore" wrote in message
...

And all I did was point out that balance of trade figures are cyclical
and as in the past you will be ahead again one day. If you are worried
then get out and do something to improve your export figures, don't
just slap on tariff's.

There's nothing to worry about, Malcolm, except with countries that are
operating under mercantile policies and that are running surpluses with the
US that are at least 30 or 40 times larger than that of NZ. And how do you
"improve" the world's highest volume of exports? For that to happen, a lot
of economies would have to grow a lot stronger.


I interpret Geoff's "returning the favour" as asking for the US to
refrain from imposing tariff's at the drop of a hat. We don't and we
ask that you don't either.

The irony here is that, not long ago, you had exceptionally high tariffs.
Your entire economic policy reversed itself over the course of a decade. Now
you're true believers -- barrier-free-trade converts -- who happen to be
left with some very high, targeted tariffs in textiles and a few other
barriers, and you're objecting to a lower targeted one in the US on lamb --
which no longer exists, by the way. Is the pot calling the kettle black?

I have no idea what the basis of that lamb/sheep-product tariff/quota may
be, by the way (but see below, I looked it up after writing this). That was
never the issue in this discussion. It may be totally unjustified for all I
know. The point was Geoff's silly and inaccurate accusation about US
economic policies as a whole.

There is no reason why trade between two countries needs to be
balanced in any calendar year. If we sell more to the US but you sell
more to Aust and Aust sells more to us, then whats the problem. Add a
few more countries in there and things even out. The only problem is
if you consistently end up in the red, but then your dollar falls and
so you are more competitive and you get your act together and your
exports increase again.


Thank you, Milton Friedman. g The are few economists today who use(d) that
"dollar falls" line -- Hayek, Samuelson, and Friedman are the best known --
but it's basically a 30-year-old doctrine that's out of touch and out of
favor.

The dollar isn't likely to fall more than a few percentage points, and that
will only affect our trade at the margins. No country in the world wants it
to fall (NZ is high on that list), and, for the most part, we don't, either.
The Japanese, the Chinese, the Asian Tigers, and even Europe are ready to
pump it up if it shows signs of hurting their exports. In fact, most of them
do it all the time.

What's different now is that anything more than a small decline in the
dollar would precipitate a worldwide recession. Our Treasury Dept. is
playing with fire right now, in fact, letting it drop against the euro, and
the Europeans know it and don't like it a bit. Neither do the Japanese.
There's some brinksmanship going on here and it makes me nervous because our
Treasury Dept. is run by political ideologues, not by objective economists.

No problem. You said you favored that offsets idea. Buy what you can from
us, and we'll buy the same amount from you. That will keep your exports
in
line with what you can afford to import. Fair enough?

We can afford to import more from you but there are other countries
also vying for our business, and if you aren't marketing to us or if
your products are too expensive or if they are badly designed then
we'll buy from someone else. Simple as that.

Simple as that? Well, look at the numbers. The US is already the
second-largest supplier of your imports, after Australia. Your imports from
the US are running 25% higher than those from Japan, 212% higher than those
from the UK, and 494% higher than those from Germany (all 2002 figures). It
looks like your market is pretty well saturated with US goods, in terms of
the percentage of it that our goods represent, and your current levels of
spending on imports. If we're too expensive or too badly designed, you must
be a bunch of patsies, buying all of our overpriced junk. g

In other words, it isn't "as simple as that." In fact, the round-robin of
trade you describe is perfectly reasonable, and that's the way it usually
goes, within limits. We're now at or beyond the limits, however, with a $460
billion trade deficit in goods ($418 billion in combined goods and
services).

Indignant demands that we accept even more imports are going to meet with
even more indignant demands that you balance up your accounts before we'll
do so. Otherwise, US politics are going to lead to a closing of some import
doors, and the WTO can go **** up a rope before we'll keep gutting our
manufacturing.

No one really knows what the long-term consequences will be from running
such huge trade deficits because they're unprecedented. But many economists
believe that we're now approaching a kind of structural limit, in which
widespread dislocations resulting from huge deficits are starting to hurt
our economy more than the overall level of trade is helping. Your per-capita
average income (for working-age adults) is around US$17,600. Ours is
US$33,000. We aren't interested in heading in your direction.

I realize that you're dependent on the world's most frustrating and
intransigent sector of trade, which is agricultural products. My sympathies,
that one's a bitch to deal with, and the big potential high-volume
consumers, including Japan, China, the EU and the US, all have horrific
tariffs and subsidies. The best thing I can offer is what the WTO has been
telling you: get your manufacturing going faster so that you aren't
dependent on agriculture for 62% of your exports. You're up against a wall
on that one. The 22% hit you took on agricultural land values from 1984 to
1990, when you dropped your own ag tariffs and subsidies, will never fly in
the big economies. We'd all have wide-ranging bank collapses and some
serious social disorder if we tried to wean off of those protections too
quickly. Well, China could handle it, but not the rest of us, because the
rest of us do our farming on privately held land. And the Chinese banks
already are running on smoke and mirrors anyway.

You may have missed the original conversation that Geoff resurrected in his
first comment in this thread. He said that he thought the idea of universal
offsets -- in other words, zero balances of trade -- was a good one, using
the opportunity to sarcastically remark that the US has one of the most
protective economies in the world.

Firstly, Geoff probably didn't know at that point that NZ was running a
substantial surplus with the US, or he wouldn't have been so favorable to
the offsets idea. Secondly, he must have a sheep-induced bias g, because
the US most certainly is not a protective economy compared to the other big
ones (and most of the small ones are FAR more protective than any of us, the
screams of poor countries at Cancun notwithstanding). When we *do* put a
tariff on something, the world screams bloody murder -- not because they
don't do it themselves, often to a greater degree, but because their
economies depend on being able to sink a large amount of their production
into the US market.

Your suggestion above would involve a massive bureaucracy to monitor
trade flows in and out, and issue licenses. We don't have that level
of regulation.

It's basically a concept to stimulate thought, not a specific plan. As for
"regulation," you most certainly *do* have it, unless you're letting
products flow on and off your shores with no accounting for them. But it
would be clumsy to implement, even if the data and the tracking of trade
shipments by virtually every trading country in the world are minutely
detailed -- except for drugs and guns.


More to the point, if you want to reduce the trade
deficit, get out and sell stuff. It is a world market, and you have to
be competitive,and unfortunately, in my experience, US companies are
largely domestic focused, and don't realize there is a world outside
the US borders.

The most interesting thing to me in this discussion is the insular,
parochial view you (and perhaps the other New Zealanders) have of what's
really going on in world trade. Geoff, the US is the world's largest
exporter of goods, and the world's largest exporter of services. We "get
out
and sell stuff" quite a lot; a lot more than any other country.

You are the world's largest exporter in dollar terms but that is
meaningless.

Oh, jeez. So, what would be "meaningful"? I think your wiggling around the
obvious is a little...er...obvious. g

You have a large population, large landmass and lots of
natural resources. Of course you export lots.

Thank you! A little recognition of reality here is a big help...

What is more meaningful
is the value of goods and services as a percentage of GDP. The WTO
gives NZ exports as 32% of GDP in 1992 and US as 23.6% in 1996. If you
can find more recent figures I'd be interested to see them but I don't
think you can accuse us of not knowing about world trade.

What is this, Fun With Statistics Day? Your figure for NZ is roughly
accurate (it's 36% now) but you must have copied the figure for the US
wrong. It's around 10%, and has been in that range for a while. The 23%
figure is about right for total trade, imports and exports combined.

Let's see, NZ has US$27.5 billion in exports (goods and services), and the
US has US$974 billion in exports, and, somehow, that translates to more
knowledge of trade in New Zealand? What do you do, distribute knowledge
based on per-capita export amounts, a proportionate amount to each brain? Do
you pass any on to the sheep? g

If you want more recent statistics, your Stats New Zealand government
service looks pretty good, and it tends to agree with WTO and World Bank
stats:

http://www.stats.govt.nz/domino/exte...acts+-+Economy

For the US, there is a veritable wonderland of statistics available, but the
trade stats you want can be found he

http://www.census.gov/foreign-trade/...ical/gands.txt


As far as parochialism goes, check out the percentage of US citizens
who have never left your boundaries as compared to other countries. I
recall seeing the figure for your national politicians as being only
about 40%, I'd be very surprised if ours was less than 100%. I think
you can expect the general population to be proportionately less than
that in both countries.

I posed that as a question, and I referenced it to things that Geoff was
saying (sorry again, Geoff). I don't know how much Geoff or other New
Zealanders know about trade, but there are some very narrow focuses there,
at least. Do your fellow New Zealanders complain as Geoff does about
American "protectionism"? Do they know how our average tariffs compare with
those of some of your other trading partners, for example? Your doing around
$20 billion in product exports, 62% of which is ag exports, most of that
being meat, doesn't encourage one to think so.



Well don't complain that we don't buy enough of your products. We have
the whole world to choose from.

I'm not complaining about what you buy. I'm complaining about people
bitching because we don't buy more of *your* products, when we already buy
more than you buy from us. If you were running a deficit and you bitched,
that's human nature. If you're running a surplus and you bitch it isn't
bigger, then what the hell is going on here?


A little explanation: New Zealand had a post-colonial economy until the
mid-'80s, at which time it decided to join the developed world. Tariffs
were
high, foreign investment was low, and the country had neither the
resources,
the technology, nor the economic structure necessary to grow into the
world
economy on its own.

I think perhaps you need to widen your sources of information!

I have the numbers here, Malcolm. Your dollar was in the tank, you had state
ownership of many industries and transfer payments and subsidies all over
the place, a shortage of capital, and few sources of technological
self-development. After '84, the numbers changed slowly at first, and then
more rapidly. In 1975, according to your own trade minister and to the OECD
data, NZ had the highest effective rate of protection (ERP) among all OECD
countries -- the very worst, by a factor of more than two. To quote your
ambassador from the latest WTO meetings, this year, "New Zealand was the
only developed country to have had a comprehensive system of import
licensing, to kep out competitive imports, until it was finally abolished
in the late 1980s...Tariffs had also been reduced, from an average rate of
around 30% in the late 1980s to 4.1%." You made a lot of progress in short
period of time, but you were coming out of a very deep hole to begin with.
Just look at your exchange-rate currency valuation over that time, and your
GDP growth. They tell the story.


The obvious difference between NZ and the US is that we have not had
any tariff's considered by and judged illegal by the WTO. The only
tariff I can recall being imposed recently was against Korean
whiteware manufacturers who were clearly dumping product here.

Of course not. When your entire population is less than that of Brooklyn and
Queens, and when you already produce excess dairy products, eggs, and some
other protected products for export, who is going to bother?

Mostly they wag their fingers at you. At the last WTO meeting, more than
half the countries crabbed about your "sanitary" restrictions on cheese,
milk products, and eggs. You have roughly zero imports of those items;
you've erected a brick wall based on a non-tariff barrier. But it isn't
worth enough money to anyone to launch a case with the WTO.

And you have industries that you protect, including footwear and apparel,
with tariffs running around 15% and, in one case of women's clothing, 30%.
Are they justified? Only if you're protecting industries, and the WTO is
letting you get away with it, largely because you've reduced other tariffs
so much -- from a very high starting point.

(Why, BTW, do you keep initiating dumping claims and then dropping them
before they come to a hearing? The WTO really let you have it over that at
the last meeting. g)

Look at your tariff schedule on textiles. You still have some remnants of
highly protective tariffs, but note that your drop from 30% average tariffs
occurred all in one decade. Suddenly you got economic religion. And like
sudden converts of all kinds, now you're becoming a bit sanctimonious. g


The evaluation happened this year, the tariff reductions are to
continue, beginning 2005 as previously planned.

Because NZ is so dependent on ag exports, it also dropped ag tariffs to
1.8% -- as a tactic to leverage lower tariffs from its trading partners
more
than anything, because the effect of lower tariffs on ag *exports* is
many,
many times the effect on ag *imports*. The purpose was to gain freedom to
increase ag exports, in other words. It is one of the lowest ag tariff
rates
in the world. It was a smart move.

Another thing the NZ government did was to actively solicit foreign
investment (US investment is only 13% of the total). They also encouraged
high-technology workers to move to NZ, to boost the technological base of
industry. Thus, a good deal of the industrial infrastructure is now
foreign-owned. The benefit to NZ, in both job production and in improving
the standard of living, has been high, and the government is encouraging
even more of it.

One benefit of foreign investment in commercial enterprise is that the
benefits nearly ALWAYS exceed the value of any profits that are taken
out,
at least while a country is developing its technological base. Without
the
foreign investment, there would have been no returns to take out in the
first place, because the jobs and the economic output wouldn't be there,
either. (This is vastly different from the foreign investment being made
in
US government securities, for example, which saddle us with future tax
liabilities.) The only problem with this will come if you maintain a high
rate of foreign ownership *after* you've developed into a world leader in
industrial efficiency, and if your growth rate slows down for an extended
period while that is going on.


Many US sourced products are uncompetitive in the
world market anyway.

Right. That's why we have higher levels of exports than any country in
the
world.

See my comments above regarding GDP.

Hmm. That's twice. Why don't you tell us why you buy so damned many of them,
if they're so "uncompetitive," relative to what you buy from Japan or
Germany?

Apparently your anecdotal example proves that the WTO world trade data is
all wrong. g

No, but it may explain why you are rightly concerned by the US
performance.

I have no concern about US performance, Malcolm. As the World Bank will tell
you, we have the highest productivity in the world, the highest level of
exports in the world, and one of the highest personal incomes in the world.
Which performance indicator are you thinking about? Our agricultural
exports?

As I said, people in a small country so dependent on exports are likely to
have a parochial view of world economics. The fact is, exports are only a
small part of our economy, partly because we already have the largest single
share, and partly because commerce within our own borders is so active and
so lucrative that the higher costs of doing business overseas don't make
sense for many of our industries. And in those areas in which per-capita
incomes go directly to the bottom line of manufacturing costs, and where
technology is a commodity that anyone country buy (much of metalworking, for
example), the result of chasing the manufacturing costs of low-wage
countries is a race to the bottom. No thanks.


I could add an anecdotal piece about working on a piece of US
manufactured equipment this last week but I don't think it's worth the
effort.

Probably not. Your anecdotes will be more meaningful in another thread,
right here in this NG. g



Finally, complaints about trade deficits are a bit thin, when it
doesn't include repatriated profits.

So, if you don't like it, don't accept the foreign investment. Do you
have
an objection to the foreign investment in New Zealand? Do you believe
that
those investors shouldn't take out profits? And, most importantly, how
does
that investment replace jobs or economic activity that you had going on
before?

Actually it was you who was complaining about trade deficits.
I
believe Geoff was pointing out that if you total your export receipts
to us, and repatriated profits from here, then you are in the black.
Not usually a thing to complain about.

No, you probably missed the beginning of this, from another thread, which
Geoff just resurrected. Gary C. and I were debating whether offsets were
protectionism, and Geoff piped in with this:

Sounds good - so when is the US going to take more New Zealand
imports? When are they going to stop tarrifs and limits on sheep meat
from Australia and new Zealand - as ordered by the WTO 3 times? For
the average US citizen, sheep are wooly animals that damn few
americans know about, or grow, but they have some powerful friends in
Congress. Offsets sound good to me - of course it goes both ways...
The US is one of the most protected markets in the world
Geoff

I'm all for offsets, Malcolm. So when is NZ going to start investing more in
the US?

Oh, BTW, I looked up the lamb situation out of curiosity. Yesterday marked
the second anniversary of the day on which the US dropped its lamb
tariff-rate quota on NZ and Australian lamb. What the hell is it that Geoff
is complaining about?


Obviously, it doesn't, or NZ wouldn't be welcoming all of that
investment.
When you run big trade deficits, however, you *may* experience job losses
and other problems. That's where the US is right now -- not because of
NZ,
of course, but because of the aggregate numbers.

And the constructive solution is to improve your performance, not
impose tariff's like the steel one which is the topic of this thread.

sigh You have a very narrow view of "performance." Trade isn't an end in
itself. The purpose of trade is to raise one's standard of living. Our
incomes average well over US$30,000. How about yours? They're about half of
that. From what basis are you giving this advice, in other words? Do you
think the US should behave like an island country with a population of less
than 4 million? Or do you think that perhaps another standard of
"performance" applies? Hmm?

As for your surpluses with the US, no one except a few sheep farmers
complains about them here. Just don't YOU complain that you aren't getting a
bigger dollar value of our market pie. You already are getting a lot more
than you're giving. And if you weren't benefitting more from foreign
investment than the profits that are being returned to the investing
countries, you wouldn't be encouraging it. I see no sign that it's an act of
altruism on NZ's part.


The lamb tariff's I referred to the other day are an interesting
example of some thinking in the US. I think you'll agree that sheep
meat is not a large selling product in the US. When it became obvious
that the US sheep farmers had succeeded in getting government support
for the tariff, the NZ lamb marketing company approached the US
industry body and suggested they form a joint venture to actually
raise the profile of sheep meat in the US and grow the market. A win
win situation for both parties. The US farmers weren't interested. As
predicted the tariff's were judged illegal and eventually removed, and
the US farmers are still where they were, struggling.

You neglect to mention that Aus. and NZ flooded the US market with lamb in
the '90s, more than doubling their exports in less than five years. That's
what they call an import "surge." Most countries protect against surges with
quotas and tariffs. The US has a trade act that provides for it (Sec. 201,
it's called), which was invoked in the case of the lamb surge. The WTO has a
very weak set of rules for protecting against surges. That's one reason I
think the WTO is living on borrowed time.

Again, if you'll track the course of this discussion, no one here was
bitching about the trade situation with NZ until you started bitching
that
the US was "protectionist" and unfair to small countries, all the while
you're running a half-billion-dollar trade surplus with the US. It isn't
that NZ is an annoyance that's on our minds all the time. It's just the
grating reaction we have when a country that's already running a surplus
with the US says they want more, and that we're "hypocrites" for not
giving
it to them.

As I said before, I think you are misinterpreting. We don't want more
exports to the US unless we can win the sales openly and fairly.
Slapping tariff's on at your whim is being hypocritical because you
profess to be against them.

Whether exports based on wages that run around half those of the US is
"fair" is an interesting question. It's come up in a very big way in our
trade relations with China. It would never come up in relations with NZ in
the absence of our China situation, partly because the gap is much smaller
but largely because your economy is relatively small.

But the question is, what's the *consequential* difference between trading
with a country that's "dumping," versus one that has low wages? The answer
is, nothing, if the country has some structural control over wages (as China
does) that keeps them low, and that doesn't allow the market to drive them
up.

NZ isn't in that situation, and one hopes that we both maintain a goal of
reducing trade barriers to let the market drive your incomes up as you
integrate with the world market. As the WTO says, you have a tough row to
hoe, with so much of your exports based on agriculture. Even among your
manufactured products, the largest single group actually is food products.

I'm sure you grasp the concept of dumping and its relation to wages, as you
initiate so many dumping actions yourself. g And you have a number of
countervailing duties and other actions in effect, mostly against Europe and
South America, with a couple against South Africa. And, of course, you have
those protectionist tariffs and non-tariff barriers on apparel, eggs, and
dairy products. So you know about dealing with surges and the damaging
effect of some types of competition.

As for which "we" is against tariffs, you'll find that "our" ideas in this
area are hardly uniform, nor have they ever been. China and India are
forcing us to refine some of them. That's what Buffet's idea is about: an
idea tossed into the ring, to deal with overwhelming imports and outsourcing
with low-wage countries.

I think that Geoff needs to think about it some more before saying he favors
it, however. NZ would be in a bit of a jam if it was applied across the
board. g

--
Ed Huntress
(remove "3" from email address for email reply)

On Sun, 16 Nov 2003 19:00:47 GMT, "Ed Huntress"
wrote:

"Malcolm Moore" wrote in message
.. .

snip

The irony here is that, not long ago, you had exceptionally high tariffs.
Your entire economic policy reversed itself over the course of a decade. Now
you're true believers -- barrier-free-trade converts -- who happen to be
left with some very high, targeted tariffs in textiles and a few other
barriers, and you're objecting to a lower targeted one in the US on lamb --
which no longer exists, by the way. Is the pot calling the kettle black?

Is 40% regarded as high? That's what the US placed on lamb outside the
quota. Now quotas are an interesting concept!!
I had already stated the lamb tariff's had been removed.

snip

We can afford to import more from you but there are other countries
also vying for our business, and if you aren't marketing to us or if
your products are too expensive or if they are badly designed then
we'll buy from someone else. Simple as that.

Simple as that? Well, look at the numbers. The US is already the
second-largest supplier of your imports, after Australia. Your imports from
the US are running 25% higher than those from Japan, 212% higher than those
from the UK, and 494% higher than those from Germany (all 2002 figures). It
looks like your market is pretty well saturated with US goods, in terms of
the percentage of it that our goods represent, and your current levels of
spending on imports. If we're too expensive or too badly designed, you must
be a bunch of patsies, buying all of our overpriced junk. g

We'll buy what it suits us to buy. I get the impression that you think
we are dependent on imports from the US? The value of the USD relative
to our dollar at present makes your products reasonably cheap. Today
the rate is 63c to the dollar, the 2001/2002 average was 44c. The
value relative to Sterling and the Euro has been much more steady.

In other words, it isn't "as simple as that." In fact, the round-robin of
trade you describe is perfectly reasonable, and that's the way it usually
goes, within limits. We're now at or beyond the limits, however, with a $460
billion trade deficit in goods ($418 billion in combined goods and
services).

Indignant demands that we accept even more imports are going to meet with
even more indignant demands that you balance up your accounts before we'll
do so. Otherwise, US politics are going to lead to a closing of some import
doors, and the WTO can go **** up a rope before we'll keep gutting our
manufacturing.

After all the OT threads in this ng over the last few years I am not
surprised by that attitude!
Must we come searching for things to buy? Perhaps you could get out
selling.

snip

You may have missed the original conversation that Geoff resurrected in his
first comment in this thread. He said that he thought the idea of universal
offsets -- in other words, zero balances of trade -- was a good one, using
the opportunity to sarcastically remark that the US has one of the most
protective economies in the world.

Well I've looked for it but the only post from Geoff that google
records on the date you gave seems to be a short post on pop-up ads?

snip

Your suggestion above would involve a massive bureaucracy to monitor
trade flows in and out, and issue licenses. We don't have that level
of regulation.

It's basically a concept to stimulate thought, not a specific plan. As for
"regulation," you most certainly *do* have it, unless you're letting
products flow on and off your shores with no accounting for them. But it
would be clumsy to implement, even if the data and the tracking of trade
shipments by virtually every trading country in the world are minutely
detailed -- except for drugs and guns.

Regulation implies a central system to give approvals to what can be
traded, and from where. Apart from the obvious illegal items and
sanitary measures I can't think of any, unlike in the past, as Geoff
mentioned.

snip

The most interesting thing to me in this discussion is the insular,
parochial view you (and perhaps the other New Zealanders) have of what's
really going on in world trade. Geoff, the US is the world's largest
exporter of goods, and the world's largest exporter of services. We "get
out
and sell stuff" quite a lot; a lot more than any other country.

You are the world's largest exporter in dollar terms but that is
meaningless.

Oh, jeez. So, what would be "meaningful"? I think your wiggling around the
obvious is a little...er...obvious. g

You have a large population, large landmass and lots of
natural resources. Of course you export lots.

Thank you! A little recognition of reality here is a big help...

What is more meaningful
is the value of goods and services as a percentage of GDP. The WTO
gives NZ exports as 32% of GDP in 1992 and US as 23.6% in 1996. If you
can find more recent figures I'd be interested to see them but I don't
think you can accuse us of not knowing about world trade.

What is this, Fun With Statistics Day? Your figure for NZ is roughly
accurate (it's 36% now) but you must have copied the figure for the US
wrong. It's around 10%, and has been in that range for a while. The 23%
figure is about right for total trade, imports and exports combined.

Yes, my mistake, Apologies. But the real figures makes my point even
more clearly.

Let's see, NZ has US$27.5 billion in exports (goods and services), and the
US has US$974 billion in exports, and, somehow, that translates to more
knowledge of trade in New Zealand? What do you do, distribute knowledge
based on per-capita export amounts, a proportionate amount to each brain? Do
you pass any on to the sheep? g

With the exception of the sheep, yes. What you are talking about here
are attitudes (parochial, insular). I'd hazard a guess that a higher
proportion of our population is involved in international trade and
that their resultant attitudes influence the rest of the population to
a greater extent than in the US, where the proportion of people with
direct experience is less, even though their numerical number may be
greater than here.

snip

As far as parochialism goes, check out the percentage of US citizens
who have never left your boundaries as compared to other countries. I
recall seeing the figure for your national politicians as being only
about 40%, I'd be very surprised if ours was less than 100%. I think
you can expect the general population to be proportionately less than
that in both countries.

I posed that as a question, and I referenced it to things that Geoff was
saying (sorry again, Geoff). I don't know how much Geoff or other New
Zealanders know about trade, but there are some very narrow focuses there,
at least. ....

From where you sit they may appear narrow but then you've just
admitted you don't now much about how we view trade. From where we sit
the US focus sometimes seems narrow, "if our producers are hurting
then we'll make things difficult." rather than "hey, we could do
things better".

.......Do your fellow New Zealanders complain as Geoff does about
American "protectionism"? Do they know how our average tariffs compare with
those of some of your other trading partners, for example? Your doing around
$20 billion in product exports, 62% of which is ag exports, most of that
being meat, doesn't encourage one to think so.

Sorry I don't understand what you're saying here. The fact that 62% is
primary produce means we don't know what other countries are applying
in tariff's?

Well don't complain that we don't buy enough of your products. We have
the whole world to choose from.

I'm not complaining about what you buy. I'm complaining about people
bitching because we don't buy more of *your* products, when we already buy
more than you buy from us. If you were running a deficit and you bitched,
that's human nature. If you're running a surplus and you bitch it isn't
bigger, then what the hell is going on here?

Because I don't think the bitch was that the trade is not bigger, it
was that you have at times applied tariff's to stop it growing, when
any growth is ultimately as a result of what your consumers seem to
desire.

To quote your
ambassador from the latest WTO meetings, this year, "New Zealand was the
only developed country to have had a comprehensive system of import
licensing, to keep out competitive imports, until it was finally abolished
in the late 1980s...Tariffs had also been reduced, from an average rate of
around 30% in the late 1980s to 4.1%." You made a lot of progress in short
period of time, but you were coming out of a very deep hole to begin with.
Just look at your exchange-rate currency valuation over that time, and your
GDP growth. They tell the story.

And the effect of quotas is?

The obvious difference between NZ and the US is that we have not had
any tariff's considered by and judged illegal by the WTO. The only
tariff I can recall being imposed recently was against Korean
whiteware manufacturers who were clearly dumping product here.

Of course not. When your entire population is less than that of Brooklyn and
Queens, and when you already produce excess dairy products, eggs, and some
other protected products for export, who is going to bother?

The same reasoning could apply to your use of tariff's, but you did.

Mostly they wag their fingers at you. At the last WTO meeting, more than
half the countries crabbed about your "sanitary" restrictions on cheese,
milk products, and eggs. You have roughly zero imports of those items;
you've erected a brick wall based on a non-tariff barrier. But it isn't
worth enough money to anyone to launch a case with the WTO.

And does the US accept product from countries with agricultural
diseases and pests that would harm your producers if they got
established?. One of our comparative advantages is that we don't have
many of the diseases and pests that reduce production in other
countries. Asking us to risk that status is like expecting you to
reduce your standard of living to match your trading partners. We have
tried to accomodate overseas suppliers, check out the problems with
Californian grapes. They were exempted fumigation because they assured
they could supply clean product. After spiders were repeatedly found
when unpacking in supermarkets, even after renewed assurances they
would do better, the inevitable happened.

And you have industries that you protect, including footwear and apparel,
with tariffs running around 15% and, in one case of women's clothing, 30%.
Are they justified? Only if you're protecting industries, and the WTO is
letting you get away with it, largely because you've reduced other tariffs
so much -- from a very high starting point.

And because there is a continuing process to eliminate them.

(Why, BTW, do you keep initiating dumping claims and then dropping them
before they come to a hearing? The WTO really let you have it over that at
the last meeting. g)

Look at your tariff schedule on textiles. You still have some remnants of
highly protective tariffs, but note that your drop from 30% average tariffs
occurred all in one decade. Suddenly you got economic religion. And like
sudden converts of all kinds, now you're becoming a bit sanctimonious. g

Nah. The big boys in the gang put us up to it and now they're nowhere
to be seen.

Hmm. That's twice. Why don't you tell us why you buy so damned many of them,
if they're so "uncompetitive," relative to what you buy from Japan or
Germany?

Because at the moment it is cheaper to buy from the US than Germany
because your dollar has "fallen", or the rest of the world's
currencies have risen (ours included). That's how come the US
equipment that was in my workshop last week came to be there.

Apparently your anecdotal example proves that the WTO world trade data is
all wrong. g

No, but it may explain why you are rightly concerned by the US
performance.

I have no concern about US performance, Malcolm. As the World Bank will tell
you, we have the highest productivity in the world, the highest level of
exports in the world, and one of the highest personal incomes in the world.
Which performance indicator are you thinking about? Our agricultural
exports?

There seem to be quite a few in rcm that have concerns. I did get the
distinct impression that you were concerned about a deficit.

As I said, people in a small country so dependent on exports are likely to
have a parochial view of world economics.
The fact is, exports are only a
small part of our economy, partly because we already have the largest single
share, and partly because commerce within our own borders is so active and
so lucrative that the higher costs of doing business overseas don't make
sense for many of our industries. And in those areas in which per-capita
incomes go directly to the bottom line of manufacturing costs, and where
technology is a commodity that anyone country buy (much of metalworking, for
example), the result of chasing the manufacturing costs of low-wage
countries is a race to the bottom. No thanks.

In which case you should have no concerns whether people buy your
exports or not, it seems to be of trifling concern to you??

snip

I'm all for offsets, Malcolm. So when is NZ going to start investing more in
the US?

Well, we tried as a constructive way of avoiding lamb tariff's but
your farmers weren't interested!! Remember.

Oh, BTW, I looked up the lamb situation out of curiosity. Yesterday marked
the second anniversary of the day on which the US dropped its lamb
tariff-rate quota on NZ and Australian lamb. What the hell is it that Geoff
is complaining about?

As above, I did note the tariff's had ended.

sigh You have a very narrow view of "performance." Trade isn't an end in
itself. The purpose of trade is to raise one's standard of living. Our
incomes average well over US$30,000. How about yours? They're about half of
that. From what basis are you giving this advice, in other words? Do you
think the US should behave like an island country with a population of less
than 4 million? Or do you think that perhaps another standard of
"performance" applies? Hmm?

Chuckle, the big daddy argument!

snip

You neglect to mention that Aus. and NZ flooded the US market with lamb in
the '90s, more than doubling their exports in less than five years. That's
what they call an import "surge." Most countries protect against surges with
quotas and tariffs. The US has a trade act that provides for it (Sec. 201,
it's called), which was invoked in the case of the lamb surge. The WTO has a
very weak set of rules for protecting against surges. That's one reason I
think the WTO is living on borrowed time.

It well may be on borrowed time. Maybe the rules are intentionally
weak because measures such as Sec. 201 are seen as counter productive.

snip

regards
Malcolm.

--
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