Tag: free trade — For Free Trade

Збільшення “курячих” квот дозволить європейцям харчуватися дешевше

КИЇВ. 19 березня. УНН. Незабаром Україна отримає шанс збільшити експорт курятини в Європу. Це станеться, якщо Європарламент схвалить домовленість сторін про зміну угоди про зону вільної торгівлі. Від позитивного рішення ЄП виграє європейський споживач, який отримає великий вибір продукту за низькою ціною. Про це заявила представник “Центру вибору споживача” (Consumer Choice Centre) Марія Чапля, передає УНН з посиланням на Food and Drink International.

Згідно з попередньою угодою, Єврокомісія планує збільшити імпортну квоту на українську курятину – з 20 тис. тонн до 70 тис. тонн в рік, нагадала Чапля.

“Не дивлячись на те, що цифри здаються багатообіцяючими, малі тарифні квоти по своїй суті шкідливі і обмежують вибір споживачів. Обмежуючи кількість імпорту курячої грудки, що надходить на ринок ЄС, ЄС створює спотворення на ринку, що призводить до зниження добробуту споживачів.

Простіше кажучи, вільна торгівля – це обмін, який дозволяє кожній стороні використовувати свою перевагу і отримувати вигоду з переваги іншої”, – заявила вона.

Вигоду від збільшення імпортних квот отримають європейські споживачі, говорить Чапля.

“Європейські споживачі можуть отримувати значно більший запас курячих грудок за нижчою ціною”, – наголошує вона.

У той же час, результатом угоди можуть бути незадоволені європейські птахівники, каже представник Центру.

“І тут дуже важливо не дозволити їм перешкодити цим переговорам”, – зазначила вона.

В ідеалі, ЄС не повинен вводити торгові обмеження у вигляді тарифних квот, так як це б’є по споживачах.

“Замість цього потрібно сприяти вільному обміну”, – резюмувала Чапля.

Maria Chaplia March 22, 2019

Young people choose free trade – and the government should too

As the Brexit no-deal vote and the deadline itself approach, expectations of the UK seizing this opportunity and reclaiming its trading heritage are heating up. What will a post-Brexit UK choose: being a global advocate of free trade or a protectionist ex-EU state?

According to a poll conducted last month, UK voters would prioritise the protection of the farming industry over cheaper food prices. However, the survey results identified that views on tariffs vary with age. And the young choose free trade.

Among those between 18 and 24, 41 per cent favour lower prices while 34 per cent would protect farmers. However, 68 per cent of those surveyed who are in the over 65 category prioritise farmers compared to only 13 per cent who favour lower prices.

In the event of a no-deal Brexit, Britain will employ a tiered approach, under which 87 per cent of import tariffs will be cut to zero. “Sensitive products” such as beef, poultry meat, sheep meat, and pig meat will be subject to higher level tariffs, defined as a proportion of “most favoured nation” (MFN) status. This is supposed to protect British farmers from losing their jobs and ensuring a swift transition. Yet, along with this, it will also present us and them from enjoying lower prices.

Contrary to popular perception, protectionism is bottom up. The proposed tariffs do not necessarily mean that the British government is protectionist. What they do mean, however, is that the British meat industry has been more successful in defending and advancing its interests than British consumers.

Proponents of protectionism stress that free trade is a zero-sum game with winners and losers measured in jobs. But this centres around short-term costs of free trade and consequently fails to see that free trade primarily seeks to create prosperity in the long run. Since young people tend to be more future-oriented than the elderly, it is understandable why anti-protectionist tendencies are rarer among them, as the poll shows.

However, while protectionists tend to overlook the advantages of free trade, free trade supporters like me do not turn a blind eye to its drawbacks. Similar to creative destruction, free trade does leave some people jobless, which in turn escalates anti-trade sentiment all across the world. Every time free marketers ignore this fact, we play to the advantage of protectionists. Instead, we have to face and address it.

Unemployment resulting from free trade is a short-term transitional cost. It is essential to understand that since costs are a vital part of every policy – none of us has a 100 per cent guarantee against them. The key question is what policy is at stake.

Furthermore, very often it is technological progress that destroys the jobs blamed on free trade. The elderly who prioritise farmers’ jobs over lower prices are more focused on the immediate effects of trade, or on the costs.

So, let’s face it. As of 2017, around 1.4 million people were employed across all the sectors that could be affected by the abolition of tariffs on agriculture. Zero tariffs would leave some people jobless, but overall they would simply force the industry to compete.

Compared to Brazil and the US, the UK is struggling with beef finishing. In terms of mutton, Australia and New Zealand will be UK’s main competitors on the global market. It’s not difficult to see why the industry has been determined to avoid dealing with the potential repercussions of unilateral liberalisation. However, it is fair to expect that the application of tariffs is merely a transitional measure. In this case, we should pioneer it.

It’s easy to talk about costs if you’re not the one to bear them. For some reason, however, it’s far more complicated to see the benefits even if you are the one who gets them. If the UK eliminates tariffs on agricultural imports, low-income households would be the first to reap the benefits.

The price of meat would decrease by more than three per cent as a consequence of a higher supply, according to a report issued by UK Trade Policy Observatory at the University of Sussex in October 2017. The report also stated: “households right at the bottom would benefit the most, those in the middle 20 per cent of the distribution would be no better off than those at the top.”

Even though the number of winners from free trade significantly exceeds the number of losers, the latter are drastically more vocal and much better organised. Whether it’s Italy, the US, or the UK, industries that are threatened by free trade shout the loudest – loud enough for the government to hear and give them what they want.

Choosing protectionism over free trade would be a step back. Not long ago, the EU applied the safeguard clause to rice imports from Cambodia and Myanmar under the very same justification used by the proponents of tariffs on meat: to protect farmers. Such protectionist measures limit the number of products available to consumers and result in an increase in prices. The world expects the UK to champion free trade after Brexit, not use the same restrictive tools as the EU.

While unilateral liberalisation on all agricultural imports would have a short-term cost, the wave of prosperity brought about by free trade would lift everyone up. Protectionism goes from the bottom up. The sooner we become aware of this and learn to speak up for the benefits of free trade, the faster protectionism will lose its power.

Maria Chaplia March 13, 2019

European Union Free Trade United Kingdom

Trade body counters calls for import tariff cut

A spokeswoman for the Consumer Choice Center said: “Imposing any tariffs on food will not only put another burden on British consumers and increase the costs of Brexit, but will also send a signal to the rest of the world that post-Brexit Britain will pursue protectionism ahead of consumer interests.

“Free trade is vital for consumer choice as it allows consumers to enjoy a greater variety of products at a lower cost. Interventions in the form of tariffs, non-tariff barriers or quotas hit consumers the hardest and, therefore, should be avoided or decreased at all costs.

‘Consumer will lose’

“Leaving the EU without a deal would cost the UK 2.2% of GDP [gross domestic product] by 2030. However, unilateral liberalisation would help compensate up to 80% of that reduction in real GDP. Therefore, it is key that, after Brexit, the UK either fully abolishes its tariffs on food, or keeps them low. If Brexit comes with tariffs on food, a small group of people – British farmers – will win, while every British consumer will lose.”

More…

Maria Chaplia March 12, 2019

European Union Free Trade United Kingdom

Trump’s Free Trade Suggestion remains Unheard

During European Commission president Jean-Claude Juncker’s visit to Washington D.C, Donald Trump once again suggested a tariff-and subsidy-free trade area between the European Union and the United States. Yet, the American president continues to fall on deaf ears, for reasons that tell more about the EU than it does about ominous ‘Trumpism’.

The meeting in Washington seemed to have a positive announcement within, as both parties agreed on an end to tariffs, non-tariff barriers, and subsidies on non-auto related industries. In a joint press conference, both parties announced that the European Union would increase imports on liquified natural gas (LNG), as well as American soybeans.

The European Union Commission returned to Brussels in a self-congratulatory manner, claiming to have avoided a trade war. And yet, with the exception of free trade no non-auto industrial goods, as well as vague promises on avoiding retaliatory trade measures triggered by tariffs on steel and aluminium, the meeting was unproductive. The import of soybeans cannot be increased simply through a Commission president statement: there are no EU tariffs on soybeans, and if companies in Europe don’t magically decide to buy them, then literally is expected to change. On LNG, the story is comparable: the European Union has already been promoting LNG for years, and the press conference just reiterated that point.

Politico Europe conveniently called the whole process “The art of no deal“.

Juncker’s effort to charm Trump into believing that he scored a victory is sad, in comparison to the actual opportunity that President Trump presented to the EU. Not only did Trump repeat during Juncker’s visit in D.C that he’d prefer a free trade deal with Europe that’d exclude all kinds of tariff-barriers, he also repeated the said statement in a tweet on Thursday:

However, if Juncker were to actually claim to walk in the footsteps of statesmen such as Robert Schuman, he’d embrace full free trade. In trade between rich and poor countries, both sides benefit, because they pay less for products, capital goods (machines, computers, etc.), and highly specialised labor. While it is true that job losses can occur when competition increases, it is important to account for increases in exports through free trade. The German car producer Mercedes might not like the competition of Italian cars on the German market, but since many Italians purchase his product, it’s manifestly more profitable to freely trade.

Protectionism is purely ideological because it is based on sentimental beliefs. If we were to take nationalism out of the picture, it would be difficult to argue that international free trade would be disadvantageous while domestic free trade (say, between cantons or provinces) is advantageous. This is particularly true in large trading blocs such as the European Union or, for that matter, the United States.

Great meeting on Trade today with @JunckerEU and representatives of the European Union. We have come to a very strong understanding and are all believers in no tariffs, no barriers and no subsidies. Work on documents has already started and the process is moving…

— Donald J. Trump (@realDonaldTrump) July 25, 2018

Tariffs are nothing more than a useful tool for the reactionary extremes of the right and left wings of the political spectrum. This is all the more visible in the sense that whenever Trump addresses the idea of freeing trade relations from all government intervention, nobody bothers to even address it.

Trump’s free trade suggestions remain unheard, because the solutions of subsidising or protecting through standards are immediate and popular. The European Union doesn’t follow an ideological line on free trade, it merely pretends to do so for the efficacy of political point-scoring.

The solution on trade isn’t “somewhere in the middle”. The idea that we’ll import some American products here and there, in order to get temporary concessions on some of our goods, is unproductive and hurts consumers. The only answer Jean-Claude Juncker should give when Donald Trump suggest completely free trade between the two continents is “yes please”.

Bill Wirtz August 1, 2018

Free Trade United States

Boeing proves protectionism doesn’t pay

A stinging rebuke by the U.S. International Trade Commission last month was a hard defeat for Boeing.

The American aircraft manufacturer brought a case to the U.S. Department of Commerce last fall in hopes of sinking a deal with their Canadian competitor Bombardier to build narrow-body jets for Delta Airlines.

Agreeing with Boeing’s claims that Bombardier was “dumping” the planes in the U.S. at a cheaper price, the Department of Commerce promptly slapped a 300 percent tariff on the C-Series jets. But that decision was overturned by the ITC last month.

That was a cause for celebration in Canada as well as the United Kingdom, considering parts of the aircraft are fabricated in Belfast and upwards of 4,000 British jobs depend on the C-series jet project. In the U.S., thousands of consumers and travellers will soon benefit from a new fleet of aircraft.

On Feb. 13, we’ll learn the commission’s justifications for overturning the tariffs, which could prompt Boeing to take another approach to tackle its Montreal-based rival.

Beyond that report, what is clear now is that Boeing will have to compete if it wants to outperform the competition. Protectionism, though the mantra in Trump’s D.C., won’t pay. Crony capitalism cannot, in itself, be the main tool used by an international firm that wants to compete in today’s global economy. Entering the arena of politics can have serious blowback.

That’s a lesson the Chicago-based firm will certainly learn after causing flare-ups in London, Washington, and Ottawa. It even put Prime Minister Theresa May’s coalition government with the Democratic Unionist Party, who vowed to protest those Belfast jobs, on shaky ground.

What’s more, the company’s protectionist play has put its lucrative defence contracts in harm’s way. Canadian Prime Minister Justin Trudeau threatened to pull Boeing’s military contracts, and UK Defence Minister Michael Fallon said their actions “could jeopardise” Britain’s £500 million relationship with the aircraft firm to supply attack helicopters and aircraft.

For a company that relies on government contracts for a large chunk of its profits, this news is concerning.

If Boeing wants to stand its ground, it’ll have to work on rectifying these relationships. Putting jobs at risk in order to stake a monopoly isn’t a good look for business, and it is toxic in politics.

This will certainly serve as a warning to dozens of other multinational firms who hope to leverage trade by seeking government monopolies and tariffs targeted at their fierce competitors.

What this affair has proven, in due time, is that waging trade wars isn’t to anyone’s benefit, surely not consumers, workers, and citizens who have the most at stake.

Full article

Yaël Ossowski June 5, 2018

Free Trade United States