Trade wars and deals

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NDPP
Trade wars and deals
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NDPP

EU To Introduce 2.8 Bn EUR Retaliatory Tariffs Against US Goods - Report

https://on.rt.com/97mo

"The EU will levy goods coming from America with tariffs worth 2.8b EUR ($3.3 billion) after Washington applied tariffs on steal and aluminum from Europe, AFP and Reuters have reported..."

Mr. Magoo Mr. Magoo's picture

The new game from Hasbro!

Strike a deal about aluminum!  Tweet your rejection about iron!  Roll the dice and move your mice!  Is it a war?  Is it a deal?  Collect all the tokens and YOU DECIDE!!

NDPP

After Delivering Veiled Takedown of US Protectionism, Freeland Says NAFTA Talks to Continue Through Summer

http://www.cbc.ca/news/politics/freeland-nafta-speech-yeats-1.4705912

"We all know we will be strongest with America in our ranks - and indeed in the lead,' she told the crowd of diplomats and academics. 'But whatever this great country's choice will turn out to be, let me be clear that Canada knows where it stands. [ it's place.]

NDPP

Italy Won't Ratify EU Free Trade Deal With Canada Says New Farm Minister

http://www.cbc.ca/news/politics/italy-ceta-canada-food-1.4705622

"All 28 European states must approve the agreement for it to take full effect."

Could Canada be so lucky? Despite the best efforts of its sellout leadership and propagandized public, to be saved by T-rump from NAFTA and CETA scuppered by Italy?

progressive17 progressive17's picture

I agree. No trade is definitely better than trade. Who needs a job anyway?

Sean in Ottawa

This should not be an ideological question. We are not against trade deals becuase it is trade. We are concerned that the trade systems are designed to concentrate wealth, exploit people and drive social and environmental standards to the lowest common denominator.

Those who are ostensibly against this trade are in favour of a power approach that is nothing to do with local economies and everything to do with greater exploitation and domination. The chickens are coming home to roost with NAFTA in part becuase of the dependency it created.

Those against these deals from the right now have the same objective as those who promoted them in the 1990s.

The collapse of these deals will not provide a relief nor a benefit. The only thing that can is an industrial policy designed to make us less reliant on these deals.

This is just an evolution of the same process -- create the deal -- build dependency --once dependency is there, then make the realtionship more exploitative by altering or ending the deal completing the economic domination.

FTA-NAFTA is more like a drug pusher making you dependent and then withdrawing the favourable pricing so that you are ruined but due to dependency cannot get away.

The objective should not be to crash the deal but to as quickly as possible attack the dependency and then back off the deal.

NDPP

NAFTA 2.0 - Time To Get It Right Or Kill It  -  by Dr Pamela Palmater

https://twitter.com/Pam_Palmater/status/917766825320108032

"The perceived benefits of NAFTA are far outweighed by the significant harm to people and the planet. If Trump kills the deal, the world won't end. Trade between the three countries would continue.

We must keep in mind that this deal impacts the lands, waters, resources and safety of First Nations in Canada and legally this deal cannot go ahead without their free, prior and informed consent..."

Got it? No consent No NAFTA. Got it? Good!

NDPP

Liberals Table Legislation To Ratify Trans Pacific Free Trade Deal

http://www.cbc.ca/news/politics/liberals-table-tpp-legislation-1.4707115

"The agreement will enter into force 60 days after at least six of the partner countries complete their respective ratification procedures. Critics of the deal say, however, that it could cost tens of thousands of Canadian jobs, harm farmers and allow corporations to sue Canada at will..."

Yes, this was the one you heard about way back, didn't pay much attention to and haven't paid attention to since. But of course 'Canada needs trade' and 'Canada needs jobs' and you support those, right? And since Trump killed the deal for USA, it must be good now, right? Never mind, the NDP who has been silent all along will suddenly ask all the right questions now, no doubt. Now that there's no chance of stopping it.  Then it will pass. Congratulations Canada!

http://stop-tpp.ca

NDPP

Council of Canadians Worried that TPP May Be Fast Tracked Through Parliament

https://canadians.org/media/council-canadians-worried-tpp-may-be-fast-tr...

"According to Agence France Press reports, Minister Champagne [who just 'extended' Free Trade with Israel!] has said that he wants to ratify the deal as quickly as possible, some suggest before Parliament adjourns for the summer on June 22."

And to Ottawa you're just along for the ride...

NDPP

"The investor-state dispute settlement (ISDS) clause in NAFTA, and other trade deals such as CETA that Canada has signed, allows foreign companies to challenge domestic laws that threaten their profitablility. US President Trump has proposed scrapping the ISDS clause in NAFTA and Canadian negotiators were willing to follow suit.

But Prime Minister Justin Trudeau stubbornly insists that ISDS be maintained in both NAFTA and CETA. When asked to explain this anomaly, Celia Olivet, head of the Economic Justice Program at the Netherlands-based Transnational Institute responded: 'In my view, the only way to explain the Canadian government pushing for ISDS is because it is defending the privileges and interests of Canadian multinational corporations that could benefit from the system..."

'Bypassing Dystopia' Could Free Canada From the Clutches of Neoliberalism

https://buff.ly/2xIzSE2

Martin N.

Lost in all the anti-American hubris and general pro patria stupidity is the fact that trade and jobs are necessary to maintain our standard of living. Mr. Dressup has managed to reduce a professional negotiating position between nations into a political circus to shore up his reelection prospects. By sucking up to Quebec dairy farmers for votes and overreacting to Trump provocations for political purposes, he jeopardizes future trade relations with the US.

Supply management and government subsidies are levers that all nations employ. They need to be negotiated by competent professionals and deliberated in sober debate, not bandied about in media stunts by a moron more concerned about his image than his country.

I agree that Canada needs to expand its trading horizons to mitigate reliance on the US but trashing our existing trade deals is a much more costly method of doing so.

NDPP

China: 'The US Has Launched A Trade War'

http://money.cnn.com/2018/06/15/news/economy/china-us-trade-war/index.html

"The world's two biggest economies are now at war over trade. China accused the US of firing the first shot on Friday when the White House said that it would impose tariffs of 25% on $50 billion worth of Chinese goods..."

 

FM Spokesperson Lu Kang's Remarks on the US' Announcement of Trade Measures Against China

http://twitter.com/globaltimesnews/status/1007631486315573248

"China doesn't want a trade war. However, confronted by such short-sighted acts that hurt both US itself and others, China has no choice but to fight back forcefully, to firmly safeguard the interests of the nation and its people and uphold economic globalization and the multilateral trading system.

We will immediately take tariff measures of the same scale and intensity. All economic and trade outcomes of the previous talks will now lose effect. Waging a trade war doesn't conform to global interests nowadays. We call on all countries to take collective actions to firmly curb such outdated and regressive moves and steadfastly safeguard the common interests of mankind."

Sean in Ottawa

We all know Trump is a lazy man who does not like to know the facts beneath the headlines. This is causing him to start trade wars without understanding the relationships and dependency.

So let's consider a few things about Canada's relationship with the US that provide context to a trade war between Canad and the US:

First the US is a mixed economy with over 35% of GDP coming from manufacturing. They are opening a trade war on a country, Canada, with which they already have balanced total trade. We all know this. But the less considered difference is that Canada is primarily a resource/commodity and service based economy with only 10% of GDP coming from manufacturing.

This means a few things: dollar for dollar, equal trade tariffs on the border mean that the US risks more jobs since our trade is somewhat less employment intensive than theirs. Also, commodity markets tend to be more global and so it is somewhat easier to replace lost trade in commodities with a new partner than it is trade lost in the manufacturing sector. Therefore, while short-term damage to Canada will be severe, long-term damage to the US could be harder to recover from.

When you consider trade between the two countries in manufacturing alone, it is characterized by integrated supply chains where damage to Canada would be mirrored in the US. The US has a massive surplus in this sector so is more vulnerable.

Much of what Canada sells to the US they need and must continue to buy in order to keep their economy going. Much of what we buy from the US is more replaceable from other countries or not as needed.

The US is setting up a sympathetic political dynamic among the countries Trump is bullying. The public nature of the dispute means that these countries' populations believe they have a mutual need to replace lost trade. This means that many countries outside of the US are more open to trade on favourable terms with each other than they may have been a couple years ago. As a group, these countries provide competitors for many of the trade items that Trump's trade wars will restrict both in terms of buying and selling in and out of the US. Some of these coutnries are more aligned when it comes social and environmental sustainabily required for the long term.

The US by its size has bullied and dominated many countries in the past -- the fiction of the US being a loser in deals is purely Trumpworld imagination. As the US takes on the world all at once, a couple things may happen: first, more relationships between equals who are more able to manage each other could develop. Second, in a protracted trade battle, the US economy could shrink relative to other countries and trade blocks. Many countries would find their relationships with the US more beneficial and balanced if they are able to reduce dependence on the US and increase their relative economic clout. As other relationships progress, the US would find itself outside blocks that would negotiate as a single unit agaisnt the US rather than as individual states. In all three cases the US would find they have a reduced negotiating position.

US politics is far more localized and divided. This means that targetting tariffs to do the most damage politically to the GOP and Trump is much easier for Canada when it is almost impossible for Trump to do the same since there is not a significant number of Canadians (outside partisan Conservatives) inclined to blame the present government for this situation (even if they propose alternate responses).

The whole growth model for economies is problematic and unsustainable. Over the longer term, countries cannot get out of the holes they dig themselves through unsustainable growth. The US capital expansion model is becoming obsolete. More of what is produced in value will be intangible and traded as information. The US view of the economy itself is as distorted as its view of trade.

Likely Trump is far more destructive to US long-term interests than most in the US realize and the US is more vulnerable than they know.

Canada would be wise to consider reducing dependence on the US not just becuase they are unreliable and are bullying but also because they are a falling star.

 

iyraste1313

I agree that Canada needs to expand its trading horizons to mitigate reliance on the US but trashing our existing trade deals is a much more costly method of doing so.......

As Mexico prepares its tariffs on US corn and soya, with Lopez Obrador waiting to assume power....NAFTA is finished....

what could possibly be more costly, than the total destruction of a sustained rural lifestyle of the indigenous and non indigenous especially south Mexico...which now is bringing on a revolutionary moment for them!

NDPP

Remember Jan 2, 1994 and be careful what you are told to wish for. The chickens shouldn't be cheering on the chopping block.

The First Declaration of the Lacandon Jungle and the Plan of Ayala: Laying Out A Movement

http://zapataproject.org/content/first-declaration-lacandon-jungle-and-p...

"The Zapatistas rose up against the Mexican government in 1994 only to discover that the Mexican government didn't exist; instead they found themselves fighting against the structures of global capital.'

These structures are the result of neoliberalism. 'The shift from state orchestrated to market mechanisms of distribution' meant that more control of the economy would rest in the private sector. The Zapatista movement takes issue with the North American Free Trade Agreement (NAFTA) as a dramatic leap by the Mexican Government further into neoliberalism..."

Rest assurred, NAFTA 2.0 will be a further leap into neoliberalism. For Mexicans and Canadians.

NDPP

IMF Warns US of 'Macroeconomic Impact' of Trade Policy Changes

http://www.informationclearinghouse.info/49649.htm

"IMF predicts an economic crash by 2020 due to the cycle of retaliation tariffs likely to follow President Donald Trump's tax hikes on tariffs..."

NDPP

Ramifications of a Trade War

https://twitter.com/natnewswatch/status/1008468783407738887

"An expert looks at the numbers...A new analysis of escalating trade disputes involving the US warns that a deterioration into an all out global trade war would knock North America's economies into recession..."

Pondering

A different take:

http://business.financialpost.com/opinion/counterpoint-mad-at-trumps-tar...

ariffs aren’t optimal for an economy, but they come pretty close, given what passes for a free market today. Tariffs are certainly not the demons they’re made out to be, and that especially goes for U.S. President Donald Trump’s proposed “reciprocal tariffs” that infuriate America’s G7 trading partners.

Those who characterize tariffs as taxes that harm consumers by raising the costs of imports are giving us only half the story. While tariffs hit consumers, they relieve taxpayers, because the revenue governments raise through tariffs displaces money governments would otherwise raise through income taxes.

A century and more ago, when federal governments relied on tariffs for their revenues, there were no income taxes. The United States developed the greatest industrial economy on earth in less than a century under a tariff-based economic system, as did the United Kingdom before it. Those accomplishments were no coincidence.

kropotkin1951 kropotkin1951's picture

Despite its merchandise trade surplus, Canada consistently records cross-border trade deficits in services and investment flows from direct and portfolio investment ($14 billion in services and $30 billion in investment income). The merchandise trade surplus in most years is sufficient to more than offset these deficits, giving Canada a current account surplus in its balance of payments with the US ($9.9 billion in 2014). The US is by far Canada's largest source of direct investment and debt capital, and by far the largest destination for Canadian investment abroad.

Trump is focused on the merchandise trade.  We don' need NAFTA to trade with the US. It was our largest trading partner before NAFTA and it still is. It is a two way relationship that benfits both parties. Under NAFTA we still got hammered on a trade issues in softwood lumber and phoney agriculture bans while being sued by US companies for wanting to defend our local environment.

The problem with trade deals is every country sends corporate lawyers to defend the interests of their national corporations and they far out number any people at the table who are focused on the peoples interests. Canada under both the Conservatives and Liberals want trade deals not to help our economy but to give our corporate elite the right to screw people in other countries when they object to an extraction project. The lawyers we send to the trade table don't give a flying fuck about the average Canadian or any local control over the economy or environment. The model is a death spiral not progress.

Pogo Pogo's picture

We got hammered on softwood long before NAFTA and for that matter Can/US Free Trade. NAFTA was supposed to resolve the dispute and of course was no help whatsoever.

josh

Martin N. wrote:

Lost in all the anti-American hubris and general pro patria stupidity is the fact that trade and jobs are necessary to maintain our standard of living. Mr. Dressup has managed to reduce a professional negotiating position between nations into a political circus to shore up his reelection prospects. By sucking up to Quebec dairy farmers for votes and overreacting to Trump provocations for political purposes, he jeopardizes future trade relations with the US.

Supply management and government subsidies are levers that all nations employ. They need to be negotiated by competent professionals and deliberated in sober debate, not bandied about in media stunts by a moron more concerned about his image than his country.

I agree that Canada needs to expand its trading horizons to mitigate reliance on the US but trashing our existing trade deals is a much more costly method of doing so.

This may shock some people.  But there actually was trade before these trade deals.And you know what. Things worked pretty well.  Economic inequality was much less than today and you didn’t need a post-graduate degree to make good money.

Sean in Ottawa

josh wrote:

Martin N. wrote:

Lost in all the anti-American hubris and general pro patria stupidity is the fact that trade and jobs are necessary to maintain our standard of living. Mr. Dressup has managed to reduce a professional negotiating position between nations into a political circus to shore up his reelection prospects. By sucking up to Quebec dairy farmers for votes and overreacting to Trump provocations for political purposes, he jeopardizes future trade relations with the US.

Supply management and government subsidies are levers that all nations employ. They need to be negotiated by competent professionals and deliberated in sober debate, not bandied about in media stunts by a moron more concerned about his image than his country.

I agree that Canada needs to expand its trading horizons to mitigate reliance on the US but trashing our existing trade deals is a much more costly method of doing so.

This may shock some people.  But there actually was trade before these trade deals.And you know what. Things worked pretty well.  Economic inequality was much less than today and you didn’t need a post-graduate degree to make good money.

That was then. You cannot assume that removing NAFTA puts us back in that position unless you overlook what was lost in the FTA-NAFTA years that cannot come back automatically.

Canada now likely has only two paths -- 1) to give in on trade and take a bad deal or 2) For the goververnment to bail and institute an industrial plan with considerable government investment to build replacements for what was lost entering these deals and what was in them.

Independent economy for Canada is not going to come without some pain given the last few years. As well, this is not a neutral end to NAFTA but one in the midst of a trade war following significant adjustments to those deals.

That said, Canada may find that this is the best opportunity to reduce dependency on the US but the pain will not be inconsiderable. The result of trade action by the US with all countries could be a deep global recession. If the government of Canada spends to invest in this cycle it might come out with a slightly different economy and a stimulous. It will also may have a smaller economy and a deeper debt.

alternately, if a trade deal is workable, the federal government should take the steps to make Canada less dependent  as soon as possible, within a less dramatic meldown of the arrangement.

NDPP

Trump Raises Stakes in Trade War with China, Targets Further $200 bn Worth of Imports with Tariffs

https://on.rt.com/97wu

"The US has initiated a trade war and violated market regulations and is harming the interests of not just the people of China and the US, but of the world,' the Chinese ministry said in a statement..."

NDPP

TRNN: Trudeau Imposes Retaliatory Trade Tariffs Against the US (and vid)

https://t.co/aVQo1Y3Ot9

"It is  in the long-term interest of Canada to unravel the intertwined economy between the two countries says Dimitri Lascaris:

'...If there's a breakdown in NAFTA - in the long-run that may actually be beneficial to Canadians. But here the punditry is talking about it as though it's some sort of a nightmare scenario that must be avoided at all costs.."

NDPP

Ten Reasons Canada Should Get Out of NAFTA  -  by David Orchard

https://www.globalresearch.ca/ten-reasons-canada-should-get-out-of-nafta...

"For months Canadians have been inundated with claims from the government, various and sundry industries, and the national punditry, that NAFTA is good for our country, even necessary, and that 'renegotiated' it will be even better. In the aftermath of US President Trump's recent visit to Canada, virtually the entire Canadian political class has completely abandoned the vision of an independent, sovereign Canada.

From the prime minister on down they rush to Brian Mulroney, the architect of the integration of Canada into the US, for direction and advice on how to 'save NAFTA'. The door is now wide open for our country to take a different route, to reject NAFTA and build a nation which controls its own economy and destiny. Here are 10 reasons why Canada should free itself from NAFTA, not enter more deeply into it..."

NDPP

Foreign Affairs Minister Chrystia Freeland Misses the Point About American Power

https://buff.ly/2tm4TYT

"In this fragile trade climate, Foreign Affairs Minister Freeland told her American audience what it wanted to hear. The US has played and could play again as beneficial role in the world. 

At some point, Canada needs a government that will connect the dots between made-in-USA international rules and world economic inequities, and instead of hoping for enlightened US leadership will join with other countries to create a just world economic order."

josh

Trump says Canadians are smuggling US goods into Canada to avoid tariffs: “They buy shoes and they wear ‘em. They scuff ‘em up to make ‘em sound old, or look old.”

https://twitter.com/EamonJavers/status/1009115616798797830

Sean in Ottawa

Orchard is nobody you should be going to for advice, logic or direction. His ten reasons have contradictions built right in that many people who are not as out to prove a simplistic point are aware of.

First -- look at his point 7: the deal makes us less independent. Yes. That should give you pause. The real situation is that Canada lacks independence and walking away from something we are depending on is going to hurt badly: by definition. After nearly 30 years of "free trade" integration, Canada has to do more than declare economic independence.

Now let's remember that Orchard is a right wing farmer when you read what he has to say about tariffs. Orchard longs for the days of tariffs supporting the federal government. He skips over the minor detail that income taxes came many decades before free trade and that since income taxes were instituted we also got a lot more from government like social welfare, health care, and public pensions. Instead of looking at what income taxes pay for, he blames free trade for the existence of income tax. Orchard is a simplistic nationalist right-winger. He should never be lauded on a progreessive site -- even if you happen to agree with him the NAFTA and the FTA are not positive. Just becuase they are not positive it does not mean that we can drop these deals instantly and a full restoration of what used to be and could have been would occur.

His contention that no deal with the US would mean reversion to the WTO suggests he has been living under a rock for the last year. The US is not following WTO rules.

His solution which is to give up on a free trade agreement now is a complete contradiciton to what he said in the late 1980s. At that time, he stated that you could not get out of these agreements easily and that was a reason not to go into them. He was correct about that at the time.

Canada desperately needs to reduce dependence on the US to pursue a more independent industrial and economic policy. However, Orchard is more like a right wing "Brexit" for Canada not considering any of the present implications.

His point six speaks of integration and yet Orchard does not allow that since this integration is well advanced that abrupt change without preparation will do significant damage that may compromise any movement towards independent actions.

Let's look at this without the simplistic blinders for a moment: NAFTA and the FTA were not uniformly bad in result. No serious person at that time or since has said that there were no assets in the deal. The arguments then and now are that the deal was not worth it becuase we were giving up things of greater value than what we were getting. What Orchard proposes is giving up what we have now in a disordered manner without any return of what we gave up. It also does not acknowledge the cost of the disruption to the integration that he admits happened.

What he is calling for is not an unwinding of the dependence in an ordered transition (as much as possible) followed by a disengagement with this particular deal. He is calling for a torching of an integrated economic system that may be less than what we could have had -- but it it exactly what we have now.

Orchard makes no suggestion of what direction Canada should go in or what independence looks like. He is limited to the arguments of 1988 and a presumption that he can make Canada great again by an abandonement of the relationship we have without any concept of what has to be rebuilt to replace it or how long that might take. The fact that he has confidence that we can walk from NAFTA and use the WTO is truly something scary.

Canada does not need an Orchard answer. It needs an answer coming from the left if we want to get out from the dependence. It requires an industrial policy to move Canada from a mostly service-commodity economy to a developed mixed economy. It requires the kinds of investments that Orchard, as a Conservative, would never want to make.

It also requires a policy of managing the relationship with the US to mitigate damge and buy enough time for Canada to have some alternatives.

Most here are clear that I am no fan of Trudeau, however, the policy of standing up to the US while trying to get some kind of short-term mitigation of what Trump is doing is correct. The issue of dependence on the US is a serious one but it is a long-term problem that cannot be fixed by walking away right now. Trudeau's investment in the pipeline is misplaced. Canada should be investing not in delivery of commodities (perhaps moving dependence from one customer to another) but the development in Canada of an economic policy that will use our resources rather than export them all in raw form and that will support industries and workers not just to compete in Canada but globally.

Orchard and others who fought the battles of 1987-1989 must recognize that they lost the battle then and the battle now is different. We cannot go back in time and right the wrong of those agreements.  In the context of those agreements, we have to find a way forward to reduce dependence and rebuild the choice we gave up 30 years ago. We will not be able to replicate what was lost forever but we can with time put ourselves in a better position to live without NAFTA than the circumstance we would find today.

And, if we have no choice but to walk now, we need people thinking about what we need to do urgently rather than cheering the torching of these deals without acknowledging the difficulty we face in leaving them so abruptly.

Also let's not pretend that Orchard had the answer then either: at the time he was insistent that we not enter the FTA but he was never an advocate of the kind of economic investments Canada needed then or now. He is, after all, a Conservative in outlook. He is more akin to Trump and a Brexiteer (although I do not believe Orchard is a racist), than an advocate of the kind of Caanda most here want to see.

josh

I don’t believe Orchard is right wing.  He’s more in the Red Tory tradition.  As for losing the argument in ‘87-‘89, a majority in the ‘88 election voted for parties opposed to the FTA.

NDPP

Trump Assails Canadian Tariffs, Accuses People of Smuggling US Goods Home

https://www.cbc.ca/news/politics/trump-canadian-tariffs-smuggling-1.4713012

"Freeland met last week with Trump's trade czar Robert Lightizer and spoke to him Monday by phone. She also spoke with US Secretary of State Mike Pompeo over the weekend. She said Canada, Mexico and the US will continue negotiating NAFTA through the summer and that she is convinced there is 'goodwill' moving forward.

Earlier Tuesday, the Official Opposition called for an emergency debate in the House of Commons over the future of the Canada-US trade deal. Conservative foreign affairs critic Erin O'Toole said Canadians need to see their elected representatives addressing what is the biggest economic crisis in their lifetime - but Commons Speaker Geoff Regan said the issue did not meet the requirements for an emergency debate."

NDPP

Opinion: Should Canada Give Up on NAFTA? YES.    -   by Gordon Laxer

https://www.thestar.com/opinion/contributors/2018/06/18/should-canada-gi...

"NAFTA is not about free trade and no tariff barriers - it's a corporate rights agreement that hinders Canadian rights on the environment and energy policy...It's rigged against Canada."

progressive17 progressive17's picture

Maybe sector-by-sector deals is the future of trade with the US. We have stuff they want. What they have, we can buy in many other places, and at the same or better quality for the same price. Love him or hate him, Jean Charest is now a bigshot lawyer, and he says there is quite a bit of work being done to do some deals with Europe. Quebec has wanted access to Europe for a very long time, and Europe is the natural overseas market for Atlantic Canada. From Ontario, stick it on a boat and send it down the river. A very old trade route indeed.

Our values, especially being much more open to immigrants, will ultimately give our domestic economy more home-grown growth. Once we hit about 40,000,000 people (which is not long from now) we should hit a critical mass where we can be economically self-sufficient.

The markets outside the US are 3-4 times bigger than the US. They all want to deal. The time is now for restructuring away from US trade, and as we recover to previous levels, when the US taps go on again, we will only be to the good.

It's going to be a hard slog for many of us, but it should hopefully turn out for the good. CANADA! OPEN FOR EXPLOITATION! CALL D. FORD!

WWWTT

Here’s a link to the most famous trade war in human history. Funny how relevant it is still today

http://www.sacu.org/opium2.html

Sean in Ottawa

josh wrote:

I don’t believe Orchard is right wing.  He’s more in the Red Tory tradition.  As for losing the argument in ‘87-‘89, a majority in the ‘88 election voted for parties opposed to the FTA.

The election was lost and the result was it came in -- that is losing the argument -- even if you had more people on your side. The argument was settled by that election when it came to policy.

Red Tory is a bit of a fantasy -- Orchard is in favour of smaller government. He is imagined to be a red Tory (whatever that means now) becuase of his views on trade. By that definition so is Trump? I heard his appeals in his leadership bid. He is to the right of centre. Not as far as Harper but that is a meaningless distinction. His views are not compatible with the vision of the country represented here. He should be no hero here.

Sean in Ottawa

NDPP wrote:

Opinion: Should Canada Give Up on NAFTA? YES.    -   by Gordon Laxer

https://www.thestar.com/opinion/contributors/2018/06/18/should-canada-gi...

"NAFTA is not about free trade and no tariff barriers - it's a corporate rights agreement that hinders Canadian rights on the environment and energy policy...It's rigged against Canada."

Laxar is to the left unlike Orchard but he is not clear on how Canada can get from here to the promised land of independent economics. Nobody is talking about this. Seems all we get are retreads of the old debate with the contradiction that the same people who said we could not get out easily when they were speaking in 1988 now pretend we can.

We are in a bad deal but management of our situation is complicated by the reality of those arguments made in 1988. An abrupt torching of the present agreement is not beneficial. Canada needs a wind-down of the deal. Call it a soft "canexit" if you like. The government needs to plan a recovery -- almost a Marshall Plan scale since the economy placed all its eggs in this basket that is about to be overturned.

I see a bunch of happy warriors all with delusions of magical solutions to the Canadian economy on a pull-out from NAFTA/FTA.

Canada needs a plan B and to buy time to get there. There is no sign of either right now. Not even a discussion from the people who warned us that we would be in this position. That is tragic.

Let me predict this -- the argument in favour of Canadian economic independence will be lost if those advocating it pretend that it will not come at a cost and need a very significant plan given our present position.

NDPP

Trump Tariffs Slam Canada, EU - Not China

https://www.cfr.org/blog/trump-tariffs-slam-canada-eu-not-china

"...Trump appears to be targeting allies as a means of rupturing their mindset - convincing them that they are no longer deserving of American coddling just because of their geopolitical status. The big question Canada and the EU must answer for themselves, now, is whether Trump is an unfortunate temporary anomaly, or merely the first in a continuing succession of 'America First' presidents."

iyraste1313

Laxar is to the left unlike Orchard.....

This is a fundamental flaw to your queries....left vs. right politics has long been irrelevant what with the cooptation of the left by neoliberalism long ago!

Also this is diservice to the nature of David Orchard and his partner, Marjalena Repo a long time independent marxist scholar!

True he made serious strategic errors, as in the case of his candidacy for the "Progressive Conservatives"...but his history, above all in Vancouver shows his true political nature.....in every way, in his private and work life he remains a radical...

No it is not left vs. right, but rather neoliberalism vs. decentralization....

This is where the true alternative to globalization must focus...building community, local autonomy and independence, based on the principles of ecology....all principles heartily endorsed by David and Marjalina, built from the indigenous communities, rural peoples of the land, small business, built on respect for the land!

First step no doubt is to end our dependency on the treaties of globalization....and no doubt there will be pain.....

as if the collapsing neoliberal system is not exerting pain?

NDPP

Canada's Economy 'Under Attack' by US Says National Chamber Head

http://calgaryherald.com/business/energy/varcoe-canadas-economy-under-at...

"...We have one customer who buys 75 per cent of what we sell', Beatty said in an interview. 'That customer, who has been our best friend and ally is now looking how to inflict damage on the Canadian economy. We need to take that very seriously. We've got to learn the lesson from this, that it's very dangerous for us to be dependent upon one customer..."

NDPP

NAFTA's Fate Could Change Timing of 2009 Federal Election: Expert (and vid)

https://globalnews.ca/news/4291092/trump-nafta-trudeau-timing-2019-feder...

"An expert in Canada-US relations says he could see Prime Minister Justin Trudeau triggering a federal election earlier than planned next year if the trade war with the US continues to escalate and NAFTA falls to pieces.

'If the prime minister feels that we're in a crisis in Canada-US relations and that everything's at stake - from the auto industry in Ontario to energy in the West and everything in between - I think he might well say he needs a strong mandate to deal with Trump,' Sands said.

On these terms, he might very well be able to be returned with a majority..."

NDPP

State of the Trade Wars

https://t.co/ynukGq7hd7

"Here's how the US Tariffs and international reprisals stand..."

progressive17 progressive17's picture

Canada has an investment problem over and above these trade problems. Investment is way down to the extent that we are now in a net FDI deficit.

Meanwhile $1.8 trillion sits in Canadian bank accounts uninvested, and more money is sitting offshore because they will not place investments here.

Money goes to where it will get the highest return. If we want to compete with the United States and other countries, we have to be more attractive to capital than they are. It has nothing to do with tariffs. 

If they are going to do a trade war, we have to do a tax war. We have to slash our corporate taxes to the lowest in the world. The advantage of this is we could abolish the dividend tax credit and make people pay regular income tax rates on the money they made from dividends. In turn, this will mean we can fire more people in the tax department who do not add any wealth to this country at all.

The parasitic middle management ranks can be thinned out to pay for this, with no loss of services to people in need. With the new investment, there will be plenty of jobs for them. If they don't want to work, that is fine too.

josh

Progressive??? 17

NDPP

Trump Tariffs on Steel, Aluminum a Major Peril to Canada's Economy, MPs Told

https://www.nationalnewswatch.com/2018/06/26/trade-committee-returns-to-...

"...The prospect of an all-out trade war is no longer an abstract notion - it's a full blown reality,' said Jerry Dias, president of Unifor. 'US trade attacks on Canada are a clear and present threat to our national economy, period,' he said."

progressive17 progressive17's picture

josh wrote:

Progressive??? 17

It will increase the Canadian deficit by 36% to buy the oil pipeline. Government seems to spend 10 times the value of things.  Granted, this may have been a Heisenburg Uncertainty Principle ploy by the Liberals, as the observers might unnecessarily deem the experiment of government intervention to be bad.

This is not what we can afford now we are at war with the United States which Donald Trump has declared.

With a few exceptions based on bulk buying, no government in Canada is capable of running a profitable business, especially in emergency situations. Government should provide necessary services it is impossible to make a profit on. Expecting them to invest in things like oil pipelines or steel mills takes their eye off of the ball of taking care of the people.

However government can build infrastructure, which it should do while the Trump is in power. However there will not be enough money to cover employment losses in the auto sector which will be coming next. In trade wars, as the history of the 20th Century shows, everything shuts down! Unemployment can go up to 30% in situations like this. Perhaps, some of the 30% can take time off, but not everyone can afford to do that.

Now the business owners in the steel and aluminum businesses are going to shut down unless they get government help. If the government gives them a specifically targetted tax rebate or subsidy, the USA can retailiate again, as they will be able to identify it. 

Worse still, this discriminates against every other worker in Canada, who should also get the same subsidy if the employment market is to stay fair. With targeted subsidies, workers may flow from industries to the steel and aluminum businesses, which will cause those other industries to lose production. With less production and the same external demand, the price will rise.

The USA has to be considered as completely malevolent. They have declared war on our economy. Now, according to the US Supreme Court, the US government could ban all travel from Canada at whim.

The US already took the move to undercut our corporate taxes. You can run a plentiful social democratic economy with very low corporate taxes and very high personal taxes levied on high incomes. They do it very well in Northern Europe.

The USA is attacking Canada's ability to earn a living. If they are going to give steel and aluminum subsidies, what are they going to do to compensate all of the areas of Canada where the workers are not employed in steel and aluminum? As we know, steel and aluminum are based in Ontario and Quebec. Why should people in BC and Alberta tolerate subsidies or tax breaks for Ontario and Quebec when there is no corresponding action for them?

Targeting subsidies and tax breaks will just make our situation worse. We need to incentivize investment. Investment creates jobs. I think, "I am going to hire someone for 3 months, and I need $12,000 or whatever to cover that. If it is paying me, I can hire them for another 3 months at the end, or whatever." We need to unlock those $12,000s. The money is not moving in the Canadian economy, even though there are trillions at hand.

Ok so say I hire 10 people at $12,000 for 4 quarters. That is $480,000. I decide that I only need them to break even to keep them on, as I know I am enjoying many intangible benefits from their labour.

Corporate tax 50%, $240,000 left to invest. 5 fired.
Corporate tax 40%, $288,000 left to invest. 4 fired.
Corporate tax 30%, $336,000 left to invest. 3 fired.
Corporate tax 20%, $384,000 left to invest. 2 fired.

As the corporate tax goes down, investment can go up. Because we are in a global economy, money can go anywhere in the world. The law of supply and demand dicates that we want the money to go here.

It is much easier to lower corporate taxes than to subsidize people. Workers will seek the highest profit, which is the way an economy should work.

progressive17 progressive17's picture

Oh - and one of the complaints of the Left is that dividend income gets a better tax rate than working income. Abolishing corporate tax would remove this advantage. Everyone would pay the same tax on the same income.

 

josh

progressive17 wrote:

josh wrote:

I guess 

Progressive??? 17

It will increase the Canadian deficit by 36% to buy the oil pipeline. Government seems to spend 10 times the value of things.  Granted, this may have been a Heisenburg Uncertainty Principle ploy by the Liberals, as the observers might unnecessarily deem the experiment of government intervention to be bad.

This is not what we can afford now we are at war with the United States which Donald Trump has declared.

With a few exceptions based on bulk buying, no government in Canada is capable of running a profitable business, especially in emergency situations. Government should provide necessary services it is impossible to make a profit on. Expecting them to invest in things like oil pipelines or steel mills takes their eye off of the ball of taking care of the people.

However government can build infrastructure, which it should do while the Trump is in power. However there will not be enough money to cover employment losses in the auto sector which will be coming next. In trade wars, as the history of the 20th Century shows, everything shuts down! Unemployment can go up to 30% in situations like this. Perhaps, some of the 30% can take time off, but not everyone can afford to do that.

Now the business owners in the steel and aluminum businesses are going to shut down unless they get government help. If the government gives them a specifically targetted tax rebate or subsidy, the USA can retailiate again, as they will be able to identify it. 

Worse still, this discriminates against every other worker in Canada, who should also get the same subsidy if the employment market is to stay fair. With targeted subsidies, workers may flow from industries to the steel and aluminum businesses, which will cause those other industries to lose production. With less production and the same external demand, the price will rise.

The USA has to be considered as completely malevolent. They have declared war on our economy. Now, according to the US Supreme Court, the US government could ban all travel from Canada at whim.

The US already took the move to undercut our corporate taxes. You can run a plentiful social democratic economy with very low corporate taxes and very high personal taxes levied on high incomes. They do it very well in Northern Europe.

The USA is attacking Canada's ability to earn a living. If they are going to give steel and aluminum subsidies, what are they going to do to compensate all of the areas of Canada where the workers are not employed in steel and aluminum? As we know, steel and aluminum are based in Ontario and Quebec. Why should people in BC and Alberta tolerate subsidies or tax breaks for Ontario and Quebec when there is no corresponding action for them?

Targeting subsidies and tax breaks will just make our situation worse. We need to incentivize investment. Investment creates jobs. I think, "I am going to hire someone for 3 months, and I need $12,000 or whatever to cover that. If it is paying me, I can hire them for another 3 months at the end, or whatever." We need to unlock those $12,000s. The money is not moving in the Canadian economy, even though there are trillions at hand.

Ok so say I hire 10 people at $12,000 for 4 quarters. That is $480,000. I decide that I only need them to break even to keep them on, as I know I am enjoying many intangible benefits from their labour.

Corporate tax 50%, $240,000 left to invest. 5 fired.
Corporate tax 40%, $288,000 left to invest. 4 fired.
Corporate tax 30%, $336,000 left to invest. 3 fired.
Corporate tax 20%, $384,000 left to invest. 2 fired.

As the corporate tax goes down, investment can go up. Because we are in a global economy, money can go anywhere in the world. The law of supply and demand dicates that we want the money to go here.

It is much easier to lower corporate taxes than to subsidize people. Workers will seek the highest profit, which is the way an economy should work.

I guess you haven’t seen the results of the U.S. corporate tax.  Almost all the money went for stock buy backs and bonuses.  Hardly a trickle made it for new hires or raises,  If you believe in trickle down economics, you should change your handle to Conservative17.

progressive17 progressive17's picture

You didn't even bother to read my post, josh. You would rather make a knee-jerk reaction. This is why the left is losing all of the political arguments and all of the elections. They don't listen, and they don't read, and they don't comprehend. 

I stated quite clearly higher income taxes for rich people can go with low corporate taxes. But you would not read that. You would only read what you want to read, and label it what you want to label it. A system which works well in Scandinavia would work well for Canada. 

You can label me Conservative 17. How about I label you Someone Who Cannot Read 17?

NDPP

'Justin, What's Your Problem, Justin?'

https://www.thestar.com/news/world/2018/06/26/justin-whats-your-problem-...

"Trump continued: 'I said, look, if you want to do that, we're going to put a little tariff on your cars..."

 

Retaliatory Trade Tariffs Targeting US Are Against The Rules - Trump's Trade Rep

https://on.rt.com/98l0

"America has the right to impose trade tariffs to protect its national interests. But when countries retaliate, they break the rules, says US Trade Representative Robert Lightizer..."

NDPP

As US Tariffs Hit Mills in Canada, Alabama Makes Steel For New Canadian Naval Vessels

https://t.co/zNLm4HVX2u

"The Canadian Navy's new supply ships are being constructed of US steel even as President Donald Trump punishes Canadian producers of the same product with a 25-per-cent tariff..."

Canadian warships made by a US company in Canada of American steel and yet Canada is declared a US national security threat. Why? Cancel the contract due to illegal US tariffs.

progressive17 progressive17's picture

I say take their investment capital in the manner described above. Hit them where it hurts.

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