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Nafta Renog...tariffs help whom?
January 5, 2017 - 8:31am
Just a thought. Supposing NAFTA is scrapped by the US. Would not imposimg countervailing tariffs (or any tariffs of any sort for that matter) be such a terrible idea?
My own guess is that if Trump looks like he's actually gonna scrap NAFTA, he'll be quickly reined in by the Republicans in Congress, most of whom depend on donations from people who are very much in favour of NAFTA. They'll probably still allow him to tweet a bunch of empty populist threats against a few multinational companies, just to keep his base under the illuison that he's really taking action.
That said, if NAFTA were to be scrapped, I would assume that a lot of people on the left would favour re-introducing at least some tariffs, since preserving tariffs was one of the main arguments against "liberalized" trade.
PMO Held Talks With Trump Team to Avert Trade War
http://www.theglobeandmail.com/news/politics/pmo-held-talks-with-trump-t...
"...Mr Trueau's principal secretary Gerald Butts, chief of staff Katie Telford and Canada's ambassador to the US, David MacNaughton, have met several times in Washington, in what have been described as bridge-building talks with Jared Kushner, Mr Trump's son-in-law, and Stephen Bannon, chief strategist and senior counsellor to the incoming Republican president.
'This is big stuff we are trying to navigate here,' a senior Canadian government insider said."
A Trade Gamble Canada Can't Win
https://www.policyalternatives.ca/publications/monitor/trade-gamble-cana...
"Canada should be prepared to walk away from the NAFTA negotiating table, even if that means Trump makes good on his threat to pull out of the agreement."
Would not imposimg countervailing tariffs (or any tariffs of any sort for that matter) be such a terrible idea?
....in a sane world where regional and national self reliant ecoomies to gurarantee social development with justice and respect for the ecosystem, tariffs are a must, which would in effect finance governments instead of income and service taxes...in other words the alternative to a neoliberal new world order...but of course sanity does not prevail in Canada thanks to the ever vigilant neoliberal media and its apologists
Speaking about an ideal world.
I am not against free trade actually although I opposed the managed agreements. I am also not a nationalist.
In that context there is a policy I would like to see if we became free of the existing trade agreements.
I do not support flat tariffs as I do not think they help workers in general very well (the tariff increases the price of the good and so the percentage the worker gets of the final price is reduced.
So instead I would prefer a system where we had import tariffs that functioned as adjustments:
1) A minimum wage to the workers consistent with wages here (or better)-- the difference form a tariff
2) An environmental conduct comparable to the legislation here (or better)-- the difference form a tariff
I would support tariffs designed to make up the difference. In some cases that would be dramatic.
So if workers in source x are paid $4 below the lowest Canadian minimum wage to produce a unit of a product that product should have a $4 tariff per unit imposed. If they saved $2 by following standards below our own then I would level a tariff of $2. Otherwise I would trade openly without penalty.
In some cases this would be effectively a free trade offer to countries with comparable wages and environmental standards and with those companies in other countries who want to raise those standards and wages to be able to avoid our tariffs.
This would serve to respect not only our workers but those of other countries. It would mean a company wanting to export to Canada woudl ahve the choice to pay their workers or our government.
In the end if everyone had the same environmental standards and wages, I would have no problem with not having any tariffs. That is becuase I do actually support free trade. Just not trade with competition subsidized by workers of any country.
border towns in Canada may have more jobs soon. :D
i think Trump is going to switch and target Canada for the wall building and scrap nafta too.
nexus cards will be gone too.
and what the hell are the dismal duo doing down there and not the Ministers its job it is to do so?
We would default to the WTO rules if NAFTA is rescinded. I think if Trump gives the 6 months notice to leave it will cause our chattering classes heads to explode.
https://en.wikipedia.org/wiki/World_Trade_Organization
And a worker and environment friendly trading dynamic I suggested above is not likely to show up as the will does not exist in Canada or the US -- and really little evidence elsewhere.
Here is a good example of a bad investment by the government potentially leading to a tariff war with another country.
Screwed up as our economy may be, poor Canadians would be completely fucked if this sort of magical thinking was put in place.
Tariffs are basically a tax on imported goods. All evidence shows that tariffs impose a heavier burden on low-income households than high-income households, as poor households generally spend more on traded goods (as a share of income).
In other words, tariffs generally function as a regressive tax that weighs most heavily on the poor. To propose replacing income tax (which is relatively progressive) with tariffs (which are hugely regressive) is little more than a Trumpian wet dream.
My understanding is that if NAFTA is scrapped we'd go back to the system that was in place prior to NAFTA. Under that, Mexico imposed far higher tariffs on US goods than the US imposed on Mexican goods.
As an observation - suppose Trump does manage to impose tariffs on Mexican goods - that's going to depress the peso making Mexican goods even cheaper which is going to offset much of the impact of the tariff.