Dear America, Protectionism Gets You Nowhere

[silverpig]

Economist Article

Canada has done a decent job recently of diversifying the markets for its products. When the US started putting import duties on timber from BC, Canada fought it through NAFTA and the WTO, but despite a string of decisions in Canada's favour, the US continued to impose tariffs on Canadian timber. The logging industry here in BC was decimated and many mills closed.

Canada spent a lot of effort in developing the Chinese market, and now Asian markets make up a significant portion of exports from BC. While the American forestry industry is protected from cheaper Canadian logs coming in, the American housing construction market is stuck paying artificially high prices for timber when they could be getting it cheaper.

Protectionist measures and the collapse of the American housing market have ravaged what used to be British Columbia’s biggest employer and export earner. With sales to the United States dropping by 58% from their peak, mills have closed, thousands of workers have been laid off and companies have bled money. “It was the worst and longest…period of decline our industry has ever experienced,” according to John Allan, an industry leader.

But over the past two years 24 mills have reopened and 10,000 workers have been rehired to fill orders from China. That is the pay-off for a marketing effort involving the industry and government: Canada has helped to revise China’s building codes, set up colleges there to train workers in timber-frame construction, and forged ties with distributors.

 

[Infohawk]

I don't necessarily see why these tariffs are a good idea (sounds like they are illegal), but Canada's interests are far more aligned with the US than with China. History shows that merely being a supplier of raw materials to a manufacturing power isn't a great goal.

I'd like to see free trade among democratic countries who respect intellectual property and tariffs imposed on countries like China that are authoritarian and who steal and copy every chance they get.

 

[Schadenfroh]

IMO, those tariffs violate NAFTA (at least the spirit of it). They should be lifted.

 

[wuliheron]

Write a letter to your congressman, oh I forgot, you're Canadian. Anyway, just ask any congressman who gets money from the beef industry or whoever if protectionist policies pay. I'm sure they'll all adamantly deny it while they cash their checks.

 

[silverpig]

IMO, those tariffs violate NAFTA (at least the spirit of it). They should be lifted.

And this has been the result of the numerous NAFTA and WTO decisions that have come from Canada bringing up the issue, yet the US continued to levy the tariffs. When the federal Conservative party here came to power in 2006, they agreed with the US to basically maintaining the status quo, much to the chagrin of BC. They continue to this day.

 

[silverpig]

I don't necessarily see why these tariffs are a good idea (sounds like they are illegal), but Canada's interests are far more aligned with the US than with China. History shows that merely being a supplier of raw materials to a manufacturing power isn't a great goal.

I'd like to see free trade among democratic countries who respect intellectual property and tariffs imposed on countries like China that are authoritarian and who steal and copy every chance they get.

Yeah I know it isn't a great goal, but if you have the resources and others want them, you might as well make money off of it in the short-term. Smart policy would use the proceeds of that to develop other aspects of the industry vertically (manufacturing), and quality of life (education). It can be a fantastic resource if used well.

 

[silverpig]

Write a letter to your congressman, oh I forgot, you're Canadian. Anyway, just ask any congressman who gets money from the beef industry or whoever if protectionist policies pay. I'm sure they'll all adamantly deny it while they cash their checks.

We don't have congressmen, but we do have members of parliament and members of the legislative assembly which function in the same way.

Canada has been fighting the tariffs for a long time and won many decisions, but the US still charges them.

Former prime minister Jean Chretien had something to say about the tariffs (paraphrased due to not being able to find the exact quote):

"Maybe Canada will just stop exporting oil to the US. They will have to start buying more softwood lumber to heat their homes."

 

[wuliheron]

We don't have congressmen, but we do have members of parliament and members of the legislative assembly which function in the same way.

Canada has been fighting the tariffs for a long time and won many decisions, but the US still charges them.

Former prime minister Jean Chretien had something to say about the tariffs (paraphrased due to not being able to find the exact quote):

"Maybe Canada will just stop exporting oil to the US. They will have to start buying more softwood lumber to heat their homes."

You wouldn't have to stop exporting oil when you can just charge higher tariffs like the US!

Gee, I wonder why nobody's thought of that? Maybe because the US is the eight hundred pound gorilla in this relationship. Sucks to be you.

 

[NoWhereM]

I suppose this is one of the reasons builders in the US are using so much pressed wood crap in building anymore. I see people using this for anything from sheathing under siding to manufactured joists and I have to wonder what they're thinking.

I know that crap is supposed to last as long as real lumber but I've seen to much of it falling apart after just a couple of years to believe that.

A tariff on the importation of timber from Canada hurts a lot more American's than it helps. I don't suppose the people profiting from the tariff worry about that, though.

 

[freegeeks]

the US screams free trade when it suits them, the whole Boeing / EADS tanker drama showed that nationalism and protectionism kicks into high gear when American companies can not compete

 

[boomerang]

Economist Article

Canada has done a decent job recently of diversifying the markets for its products. When the US started putting import duties on timber from BC, Canada fought it through NAFTA and the WTO, but despite a string of decisions in Canada's favour, the US continued to impose tariffs on Canadian timber. The logging industry here in BC was decimated and many mills closed.

Canada spent a lot of effort in developing the Chinese market, and now Asian markets make up a significant portion of exports from BC. While the American forestry industry is protected from cheaper Canadian logs coming in, the American housing construction market is stuck paying artificially high prices for timber when they could be getting it cheaper.

Thanks for the lecture. We're used to being the bad guys here. It's been a worldwide pastime for many, many decades. Despite contributing our tax dollars to help support over 150 nations in the world, we're still no good rotten SOB's. Keep up your rhetoric and we may just wise up and cut the world off. We absolutely can't afford it anymore.

We'll let you smart guys pick up the slack.

http://www.youtube.com/watch?v=_ocVj6UWiDI

 

[wuliheron]

the US screams free trade when it suits them, the whole Boeing / EADS tanker drama showed that nationalism and protectionism kicks into high gear when American companies can not compete

Or when they simply kickback enough money to congress. What's the point in doing business in places like the US if you can't buy an uneven playing field?

 

[silverpig]

You wouldn't have to stop exporting oil when you can just charge higher tariffs like the US!

Gee, I wonder why nobody's thought of that? Maybe because the US is the eight hundred pound gorilla in this relationship. Sucks to be you.

1. He was saying it as a joke.
2. We *COULD* do that, but it too would violate NAFTA.

 

[silverpig]

Thanks for the lecture. We're used to being the bad guys here. It's been a worldwide pastime for many, many decades. Despite contributing our tax dollars to help support over 150 nations in the world, we're still no good rotten SOB's. Keep up your rhetoric and we may just wise up and cut the world off. We absolutely can't afford it anymore.

We'll let you smart guys pick up the slack.

http://www.youtube.com/watch?v=_ocVj6UWiDI

Lecture? What? This is about protectionism hurting nations that institute it.

 

[Anarchist420]

"You don't need treaties for free trade" ~Murray Rothbard.

 

[Matt1970]

Canada has a Value Added Tax (VAT) on all it's imports. What's the difference?

 

[Throckmorton]

LOL!! Protectionism gets you nowhere... the economists and businesspeople shout this from the rooftops even while our jobs are fleeing the country.

What they really mean is that protectionism is bad for the robber barons.

 

[Throckmorton]

"You don't need treaties for free trade" ~Murray Rothbard.

When you graduate you'll realize that you can't get a job. All you'll be able to do is sit in your parents' house and read books on economic theory while America turns into a third world cesspool outside your window.

 

[MovingTarget]

the US screams free trade when it suits them, the whole Boeing / EADS tanker drama showed that nationalism and protectionism kicks into high gear when American companies can not compete

It isn't so much nationalism so much as it is political clout of Boeing. EADS was partnered with Northrop Grumman, a very prominent defense company in the US dating back to pre-WW2. I've physically stood in the place that they and EADS would have been building the tankers - not in Europe, but in Mobile, AL.

EADS/Northrop, and now only EADS, had the better, more proven tanker and was going to be building a new facility in the US to build them - and they still lost. Boeing simply has gotten too large and been allowed to lobby too much.

 

[freegeeks]

It isn't so much nationalism so much as it is political clout of Boeing. EADS was partnered with Northrop Grumman, a very prominent defense company in the US dating back to pre-WW2. I've physically stood in the place that they and EADS would have been building the tankers - not in Europe, but in Mobile, AL.

EADS/Northrop, and now only EADS, had the better, more proven tanker and was going to be building a new facility in the US to build them - and they still lost. Boeing simply has gotten too large and been allowed to lobby too much.

that's my point, I know that planes would have been built in the USA. Just look at the comments in the Boeing / Airbus thread. It's clear nationalism playing up there, even some members of congress made comments in that sense. It's the whole USA number 1 thing...

 

[freegeeks]

Thanks for the lecture. We're used to being the bad guys here. It's been a worldwide pastime for many, many decades. Despite contributing our tax dollars to help support over 150 nations in the world, we're still no good rotten SOB's. Keep up your rhetoric and we may just wise up and cut the world off. We absolutely can't afford it anymore.

We'll let you smart guys pick up the slack.

http://www.youtube.com/watch?v=_ocVj6UWiDI

spare me the drama, Europe, Japan, Australia and other rich countries are equally spending billions helping other countries but it's always the americans with the "we are saving the world" rhetoric. It's not because you say it all the time that it is the truth

 

[Anarchist420]

When you graduate you'll realize that you can't get a job. All you'll be able to do is sit in your parents' house and read books on economic theory while America turns into a third world cesspool outside your window.

I already did graduate.

 

[silverpig]

Canada has a Value Added Tax (VAT) on all it's imports. What's the difference?

We have it on all our domestic stuff too. If the US taxed their own softwood lumber industry at the same rate, it'd be moot.

Oh, and the 2006 agreement between Canada and the US ended up with the US saying they'd drop the tariff, but that Canada had to self-impose an export tax on softwood lumber in the same amount. It's still a crappy deal for the Canadian forestry industry, but at least Canada keeps the tax money now.

 

[Throckmorton]

I already did graduate.

Do you have a job?

 

[her209]

"You don't need treaties for free trade" ~Murray Rothbard.

Do you support free trade where a company is allowed to sell weapons to its nation's enemies?