This past weekend, I watched on C-Span discussions of the new free trade agreement with EU, TTIP, and the proposals for a NAFTA-2 agreement. Particularly, I found instructive the discussion at the Center for Strategic and International Studies in Washington.
During negotiations for NAFTA-1, I had a tiny window of input; and overall, I was encouraging of the developing treaty for the North American Continent. Currently, there's a plethora of free trade agreements in effect or in circulation, including Mexico's outreach market ploy to corral South American countries into its free trade pact.
Support for these free trade agreements has never been enthusiastic. I think the public is aware that there are costs to it; and these don't seem part of the agreement! I describe these costs, viz., what I regard as opportunity costs, as defrayed, usually paid for by the people of the countries through their governments' participation in some free trade agreement.
Key to understanding these defrayed costs is to start with a transaction between two corporations (i.e., a memo of understanding) that establish a free trade agreement for some product, one ordering the product to be produced, the other agreeing to manufacture the product (or, in some way produce it) for a set sum of money; and each corporation head-quartered in a country other than the other.
What are these opportunity costs which are being defrayed? In the country where the product is produced, these involve use of natural resources--water and land--which, if polluted are not satisfactorily cleaned up. In the country losing sites of production and manufacturing, these involve workers who are displaced and have lost income; and in many cases must be subsequently re-trained, perhaps, even re-located. In that the governments, acting on behalf of the businesses involved, have provided the opportunity for international trade, they must be compensated for the incursion of demands upon their workforce and resources because of the free trade transaction.
Accordingly, I argue for an export tariff tax: when the value is added to the product being produced within the boundaries of a country, that country should tax the value that was added to the product in goods and services provided within its borders. Secondly, while companies bear no responsibility to workers who migrate into their country to become part of its labor force so as to benefit possibly from an additional call for skilled workers, they should discourage worker migration cross borders. For one thing, migration drains the indigenous worker pool (witness what happened in Mexico and Central America, when migrants drifted north to the US). For another, it places undue and uncompensated demand on social services in the producing country.
What principle I appeal to for backing to these shifts toward paying for the free trade opportunity is the recognition that for the transaction to benefit each participating corporation, all parties must assume responsibilities as operating businesses in partnership in the production process.
A related point to make: Internet Point of Sale
It is true that the Internet spans many, many countries; and there's a tremendous surge in sales of companies doing selling over the Internet. Typically, these are "mom-and-pop" or "husband-and-wife" operations, but their costs are minimal--amounting to cost to produce the product or engage in the service; and shipping charges via Fed-Ex; and costs to meet relatively minimal regulatory standards within one country or another where the transaction and sale is recorded.
Obviously, many Internet companies are thriving, capable of meeting the responsibilities of business to pay their share to government. Accordingly, there should be a sales tax instituted, possibly by the federal government or certainly by the province or state government where the point of sale is recorded. Failing to impose this responsibility upon small businesses, primarily, is to my mind providing undue advantage to those involved in Internet selling over the more usual customer selling.
Monday, December 30, 2013
Sunday, December 8, 2013
The Ukrainian Developing Nation!
It's been many years since I was in Russia to discuss the construction of a constitution for the Russian Federation of Independent States, some discussions in some of which I participated. I'm lucky enough to be still living to see how these Independent States are faring. The current struggle in the Ukraine over how close this Nation is to be tied to Russia is something that we had anticipated at that time.
That each federation state is a nation with independent status, to my mind, is a precious property--one that should be retained. Negotiating with Russia to extend a strategic partnership relationship ought not mean giving up nor sacrificing the independent character of the Ukrainian people, for which right they voted in approving the new Constitution in 1991.
I take it, should the Ukraine join the customs union the country would remove all passport controls, much as is essentially the case for a country in the E.U. The question really is what does the Ukraine gain in so doing and what of its independence does it give up. From the EU's beginnings, it is true, a citizen of one member state could freely travel to any other. The reason (I believe) for this fundamental free travel feature stems from a desire by the large states for cheap labor: a citizen of one of the EU countries can migrate to any other in order to look for, or find work. Now that the EU countries are experiencing a recession lasting for several years, the more prosperous states are seeking to restrict entry to migrant workers from the poorer states.
But there's more to the EU. It wants its own currency. The UK has shied away from going along with this feaature. Another--it is committed to remedying the financial deficits of member states. Germany has tried to resist EU's pressure for its own country's wealth to help Greece and Spain maintain solvency. I can't fathom that the Ukraine wants to get involved in Western European financial problems. No, to my way of thinking, the EU is no answer. Add to this how scandalously EU has treated Turkey's steps to join the EU, when I don't believe the EU has any intention to give it member status!
Now, there are international organizations that can be useful to the Ukraine, and maybe it already has sought help from them or belongs as a member state of some of them. Best by far is the World Trade Organization (WTO). This organization is dedicated to lower tariffs among its members. While a member state may not have all its tariffs reduced, it sets up trade agreements with trading partners to economically benefit both the member country and its partners. It is the case that the EU handles tariff reductions among member states, but be it observed, that the US trades with all European nations and does not belong to the EU! It is also the case that the US belongs to several regional trading blocs whose purpose is to reduce tariffs among its members. That the Ukraine may have a free-trade agreement with Russia ought not preclude, nor rule out, its making some free-trade agreement with another country anywhere else in the world!
There's the UN, which does monitoring of a country's internal elections; and has a distinguished record in this area. There's the many international accounting firms that can be hired to systematically audit a country's financial systems. These, I noted in my trips to Brazil, can be invaluable in handling issues pertaining to corruption in government. For money, the International Monetary Fund (IMF) has been designated principal agent to Eastern European countries. But there's also the World Bank, useful, I have seen, in establishing new industries within a country.
The point I'm trying to make is that the Russian Federation of Independent States has permitted trade agreements among members in the Federation and permitted trade agreements of a member with those outside the Federation, even with EU member states.
-------------------
An aside matter. When I was in Russia, I was asked whether I thought large-scale emigration of Jews living in the Ukraine, particularly in Kiev, was a good idea. Knowing that a new constitution was in the works in Russia, I thought Russia would find itself drained of an important educated, talent pool should that happen. In the States a few years back, I saw a motion picture that depicted the plight of some immigrant Jews who were sent into the desert to work at a bottle factory.
You know, Malcolm-X, a black leader in the US, advocated for awhile the position that blacks of slave ancestory in the US should found their own country, somewhere in the South--a country where they could be themselves. I'm glad that Malcolm-X changed his mind and they have worked together with whites and all other peoples in the US for justice and for unity among all. The blacks in the US have done so much to promote peace and equal opportunity for all by being included amongst us and championing the cause of justice with us all: As is said in the streets of Detroit and in the streets of Memphis and in the streets of San Francisco, "We shall overcome!"
That each federation state is a nation with independent status, to my mind, is a precious property--one that should be retained. Negotiating with Russia to extend a strategic partnership relationship ought not mean giving up nor sacrificing the independent character of the Ukrainian people, for which right they voted in approving the new Constitution in 1991.
I take it, should the Ukraine join the customs union the country would remove all passport controls, much as is essentially the case for a country in the E.U. The question really is what does the Ukraine gain in so doing and what of its independence does it give up. From the EU's beginnings, it is true, a citizen of one member state could freely travel to any other. The reason (I believe) for this fundamental free travel feature stems from a desire by the large states for cheap labor: a citizen of one of the EU countries can migrate to any other in order to look for, or find work. Now that the EU countries are experiencing a recession lasting for several years, the more prosperous states are seeking to restrict entry to migrant workers from the poorer states.
But there's more to the EU. It wants its own currency. The UK has shied away from going along with this feaature. Another--it is committed to remedying the financial deficits of member states. Germany has tried to resist EU's pressure for its own country's wealth to help Greece and Spain maintain solvency. I can't fathom that the Ukraine wants to get involved in Western European financial problems. No, to my way of thinking, the EU is no answer. Add to this how scandalously EU has treated Turkey's steps to join the EU, when I don't believe the EU has any intention to give it member status!
Now, there are international organizations that can be useful to the Ukraine, and maybe it already has sought help from them or belongs as a member state of some of them. Best by far is the World Trade Organization (WTO). This organization is dedicated to lower tariffs among its members. While a member state may not have all its tariffs reduced, it sets up trade agreements with trading partners to economically benefit both the member country and its partners. It is the case that the EU handles tariff reductions among member states, but be it observed, that the US trades with all European nations and does not belong to the EU! It is also the case that the US belongs to several regional trading blocs whose purpose is to reduce tariffs among its members. That the Ukraine may have a free-trade agreement with Russia ought not preclude, nor rule out, its making some free-trade agreement with another country anywhere else in the world!
There's the UN, which does monitoring of a country's internal elections; and has a distinguished record in this area. There's the many international accounting firms that can be hired to systematically audit a country's financial systems. These, I noted in my trips to Brazil, can be invaluable in handling issues pertaining to corruption in government. For money, the International Monetary Fund (IMF) has been designated principal agent to Eastern European countries. But there's also the World Bank, useful, I have seen, in establishing new industries within a country.
The point I'm trying to make is that the Russian Federation of Independent States has permitted trade agreements among members in the Federation and permitted trade agreements of a member with those outside the Federation, even with EU member states.
-------------------
An aside matter. When I was in Russia, I was asked whether I thought large-scale emigration of Jews living in the Ukraine, particularly in Kiev, was a good idea. Knowing that a new constitution was in the works in Russia, I thought Russia would find itself drained of an important educated, talent pool should that happen. In the States a few years back, I saw a motion picture that depicted the plight of some immigrant Jews who were sent into the desert to work at a bottle factory.
You know, Malcolm-X, a black leader in the US, advocated for awhile the position that blacks of slave ancestory in the US should found their own country, somewhere in the South--a country where they could be themselves. I'm glad that Malcolm-X changed his mind and they have worked together with whites and all other peoples in the US for justice and for unity among all. The blacks in the US have done so much to promote peace and equal opportunity for all by being included amongst us and championing the cause of justice with us all: As is said in the streets of Detroit and in the streets of Memphis and in the streets of San Francisco, "We shall overcome!"
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