> Behalf Of John D. Giorgis
> I'm talking about things like special treatment under laws, tax breaks, > below-market access to federal resources, etc. > Australia's farmers would love for US subsidies to inefficient US farmers be dropped. Sugar, beef, you name it. Still haven't seen a lot of movement from the US on lamb quotas applied to Australia, even though we won the WTO court case AND the appeal. Of course, even better would be for Europe to stop its subsidies. > >Well, because it would put our balance of trade even more out of wack. I > >realize that we can afford the present imbalance, but it seems that > >unilarerally dropping trade barriers would invite high trade barriers > >against our goods, because the countries that did this would end > up gaining. Australia has been unilaterally dropping trade barriers for the last 25 years. Not always sensibly. For example, we used to have a whole lot of local manufacturing industries that, since the barriers went have now disappeared - everything from TVs and refrigerators to clothing and textiles. The many, many fewer companies that now exist in particular industries are far more efficient than they used to be but it has been achieved at a far cost in unemployment, bankruptcies etc. One problem, of course, is that those industries that have survived must take on overseas markets where they often find that their local competitors have trade barriers of one sort or another. Food exporters to Japan have to wend their way through various "quality" inspections, to Europe they have to compete against heavy subsidies. Elsewhere, we have to compete against US or European dumping of goods to prop up their (US/Europe) growers/manufacturers. > > Why do countries gain by place barriers to trading with us? For all the above, sometimes you do want to support an industry for national interest. For example, even though more expensive, Australia prefers to build its own defence equipment wherever possible, from Steyr rifles (ex-Austria) to Collins class submarines (bastardised Swedish design) Strategically, it means we develop and foster high tech industries instead of placing all our eggs in a somewhat unreliable basket. Our motor vehicle industry is also a case in point, one which Korea and Indonesia are also following. Our TV and radio regulations require some measure of local content, which means that there is support for local musicians and film workers. Yes, we pay a bit more for CDs and videotapes. But as well as cultural benefits (not everyone likes to hear American accents everytime they turn on their telly) it also means that we have facilities here that can be used to make overseas financed films. In essence, an export market where heaps of money comes into support Australian artists. For example, Pitch Black, Thin Red Line, MI-2, Matrix, etc > > Presumably countries who currently trade with us are not being made worse > off by the experience - if trading was making a country worse > off, we would > expect that they would simply stop trading! Depends what people want. If you want aircraft or military equipment or machinery then the US is pretty hard to ignore, even if you can't really afford it. There is a kind of economic imperialism going on with many countries who find themselves deeply in debt to the US, where US sourced goods are required but little or no counter trade occurs. Think of all those sugar exporting countries, for example, who've had to fight against US quotas. There are many other, mainly agricultural, examples that could be made. > > Personally, I love it when countries subsidize their own > industries to make > them more competitive in international trade. Essentially foreign > taxpayers are paying money to make good cheaper for Americans! Only > humans could argue against taking a deal like that. > Que? Brett
