Going local and the myth of free Trade

The more I think about the logical progression of trying to go local is that the so called free trade idea should be binned . I give you four examples .
Generic drugs are available for between an quarter of the price and in some cases less than a tenth of the price in europe than in the USA . They quality is no different . So why ?
Mobile phones are seen as an essential thing these days yet none are manufactured in the USA and very few in Europe , are people in the USA or Europe incapable of such work ? nope instead we have Apple with a platoon of accountants moving money round the world to avoid tax ( never mind the destablisation of the congo where some of the raw materials come from)
The usa supports the price of rice grown in Texas ( govt speak for subsidises ) and sells the excess in West Africa undermining the lively hood of local small farmers.  

I note with some amusement the recent USA govt announcement to level charges on solar panels and washing machines.

I think govt should be encouraging local production where ever practical  .  What do othe folks think ?

David

I'd like to see many more things produced locally. I think the number one way to do this would be to have huge tariffs on things that are typically produced elsewhere. I don't care what that does to the economy anywhere, or who loses money. We could call it a fuel tax or a carbon tax or whatever. If it gets shipped across the planet, tax the hell out of it.

At my local supermarket, the least expensive lamb is from New Zealand and the least expensive fruit is often from Chile. I'm in Canada, so there's some distance involved. A distance tax would raise the prices on those foreign products.

But distance isn't everything. It takes about one tenth of a kilogram of fuel to ship a kilogram of lamb from New Zealand. If it were grown organically, it would still be a far better choice than stuff growing right down the street. Some meats produced right here, take 3 Kg of fuel per kilogram of finished meat.

I was rather surprised to learn, that wild caught fish, averages 1 kg of diesel burned for every kilogram of fish landed, as a worldwide average. Farmed tilapia from India is often grown using less than 1/100 of a kilogram of fuel per kilogram of fish produced. So, in this case, the farmed fish from Halfway Around the World, is less environmentally harmful, than many other choices.

So, I'm in favor of taxing out the most wasteful choice, no matter where that product is from.
......
Another thing for me is environmental standards and labor standards. Unless those standards are somewhat equivalent, we can't have any sort of real fair trade. I'd be happy to pay much more for products from places that are polluting themselves to death. This would tend to punish bad behavior and reward manufacturers and countries who are doing a better job.

You can't change anything whithout changing the money flow. Pay cash go to credit unions (if at all). Avoid big banks like the plague. Unfortunately you can't avoid governments.

No but you can change them :-)

David Livingston wrote:The more I think about the logical progression of trying to go local is that the so called free trade idea should be binned . I give you four examples .
Generic drugs are available for between an quarter of the price and in some cases less than a tenth of the price in europe than in the USA . They quality is no different . So why ?

The difference is almost all because of government, not the market.

David Livingston wrote:Mobile phones are seen as an essential thing these days yet none are manufactured in the USA and very few in Europe , are people in the USA or Europe incapable of such work ? nope instead we have Apple with a platoon of accountants moving money round the world to avoid tax ( never mind the destablisation of the congo where some of the raw materials come from)

Again, the main reason is government, with the market trying to route around the damage government causes.

David Livingston wrote:The usa supports the price of rice grown in Texas ( govt speak for subsidises ) and sells the excess in West Africa undermining the lively hood of local small farmers.

Another case of government being the problem.

David Livingston wrote:I note with some amusement the recent USA govt announcement to level charges on solar panels and washing machines.

More government being the problem.

David Livingston wrote:I think govt should be encouraging local production where ever practical  .  What do othe folks think ?

David

The reason most of these problems exist is that well intentioned people who don't understand or trust other people (i.e. the free market, which is just everyone making their own choices) try to impose their will land values on everyone else by using government. Add in Regulatory Capture (i.e. producers trying to use government to protect their business) and you get a messed up situation.

As has been pointed out, shipping expenses are real but often small. In comparison to the excess cost of government shipping costs are trivial and can effectively be ignored. But if we remove government's costs from the equations, the shipping costs will become more important to minimize for businesses, which will result in more local production. That will be far more effective than trying to get random bureaucrats whose jobs don't depend on getting things right to encourage local production.

A large portion of The People have way more power than they realize, all they have to do is vote with their wallet.

I don't think there's inherently anything wrong with free trade, but I agree with the aforementioned point that we have to be using the same standards for things like labour and environmental protection standards.

Basically any company or country that is able to do the same things North American manufacturing can do at a cut rate is damaging something. It falls either on the environment or on the people.

So by buying cheap trade goods at Wal-Mart or Joe Fresh, as an example, we are indirectly exploiting poor people and the environment around the world, just so we can have our cheap 5-pack of t-shirts and socks.

And then subsidies are offered to local companies or interests, just to remain competitive. Who pays for these subsidies? Who else, but the taxpayers?

I think that we should have free trade, but only with countries that seek to meet our expectations with regards to labour and environmental protection standards.

I think that carbon taxes for shipping and travel need to accurately accounted for and offset the real cost to the environment. That way, if shipping and travel can be done in ways that cuts the amount of petroleum used, say as an example if cargo freighters employed those kite-like tethered sails that look like parasails, or if solar/thermal/electric heavy-lift airships were available, there's a clear economic incentive to take the cleanest route.

To vilify trade is nonsense, in my opinion. But we can't reasonably expect to invent something here, set up the manufacturing infrastructure on the other side of the planet where they might have so little extant infrastructure that it's being started from scratch, ship them raw and/or processed materials, and ship the finished product back across the planet, and expect to get it more cheaply than we could have had we done it ourselves, locally, without some part of the system as a whole being compromised.

To quote a wise man, "There ain't no such thing as a free lunch."

So as with most instances of systemic problems, I think the scope of the system being considered needs to be widened. If we are to have global free trade, the system we need to look at is the globe. If we fail to do that, we are essentially benefitting from the destruction of the planet and the enslavement of its people.

For cheap shit from Wal-Mart. What we need is some perspective.

-CK

Hi Ron I understand what you are saying however I believe something different . The constitution of the USA is a great document It starts with a wonderful phrase inspired my the great Thomas Paine I think , the first three words " we the people "  for me the implication is that the government is the will of the people we are the government in effect .
How this idea that the government is something independent of us the democratic voters I do not understand , I think it comes from those who are trying to undemocratically rule and control us , what I tend to think of as the confusopoly. Creating devision where there is none , making things complicated that should be simple , offering us false binary choices when other choices would be better . We can make a difference we should make a difference .

David

I forgot to mention I don't believe there is a free market either - the fix is in :-)
I don't believe the hype

David

James
Totally agree but don't forget to put your cross as well :-)

David

Chris
I would rather tax the imports to support local trade initiatives that tax me to support local initiatives . To me this seems fairer :-)
Thus I don't  believe in free trade as such .

David

If free trade was really a thing why would fair trade need to be a thing ?

Very few Americans are employed as farmers because we have given our jobs to technology/machinery/robots.
In fact most tangible manufacturing jobs have been given to automation machinery/robot and not to humans no matter the country.

We are now at the point were alot of service jobs are now being given to software/robot.

So I worry more about that it used to employ 100 people to make a XYZ in the old days but now 90 of those jobs have been given to automated machinery and we dont complain about that but we complain about the 5 that have been given to some foreign country. One could call that injustice.

I want to buy my food made from low-tech manure vs high tech fertilizer. Small batch hand harvested vs self-driving and harvesting farm equipment. I rather know that our collective $100 when to employ 10people and no machinery vs 1person and 10 AI-robot.

But Free Trade means the free movement of (1)money, (2)goods/services, and (3)people/corporation.
We should make it illegal for american companies to do any biz with Iran, North Korea or any country in the world, so no more microsoft software in EU or Africa and likewise we should stop those companies from other countries from doing biz here.
We should also stop americans from investing in other countries with our money and we should stop them from investing in our country too.  

I think most wars that have been fought, throughout history, could be considered trade wars in some way. I think that applies to the more recent foreign adventures of the United States, if you consider that Osama Bin Ladens main issue was concerned with distribution of wealth from Saudi oil. I'd like Canada to join the OPEC. We're sitting on a lot of oil.

We were told lots of bad things about Muammar Gaddafi. The African League is an organization that Muammar wanted to turn into a sort of OPEC for mineral producing countries. He was the most important member of that group. A cartel like this, could become the most important organization in the world. I believe that is why Muammar Gaddafi is dead.

I'm trying to see how the ideologies being discussed here would apply to someone who runs a website. Let's say an e-commerce website. Maybe a website that offers an innovative web-based software tool that makes computing heck a lot easier - something that everyone is dying to get.

I get so much traffic every second that I badly need more server power to sustain. I live in Sri Lanka. I figure if I host my stuff on Amazon servers, I would get more bang for the buck, and I can serve more people. Amazon likes to host my stuff, and I like to host with them as well. Yet we have some server providers in Sri Lanka too. If the government here (or let's say the people in Sri Lanka as a whole) figures what I'm after, should they force me to host it on Sri Lanka servers?

Time passes, and now there are ten other websites that offer services almost identical to what my website offers. They offer the same service at much lower prices. As more services emerge, the price goes even down. I, being a dumb and greedy one, don't want to knock off a bit of the original price. Eventually everyone moves away from my site to the other low-cost sites, and my business was all set to be bankrupt.

But the government of Sri Lanka moves to block those other sites here because, let's say, I lobby the Sri Lanka government. As a result, I get to keep my business running again and sell my web service at an even higher price. Should I be forced to sell my stuff at the same price set by the other ten providers? Or should the political structure be changed that I can't effectively lobby the government?