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From: mmt@dciem.UUCP (Martin Taylor)
Newsgroups: can.politics
Subject: Re: Trade offsets (Eastern Myopia)
Message-ID: <1271@dciem.UUCP>
Date: Wed, 12-Dec-84 17:27:04 EST
Article-I.D.: dciem.1271
Posted: Wed Dec 12 17:27:04 1984
Date-Received: Wed, 12-Dec-84 18:52:54 EST
References: <854@ubc-cs.UUCP> <653@watcgl.UUCP> 
Reply-To: mmt@dciem.UUCP (Martin Taylor)
Organization: D.C.I.E.M., Toronto, Canada
Lines: 27
Summary: 


I'm not clear why submitting to Indonesian trade offset requirements
is a bow in the direction of freer trade.  If Indonesia wants BC lumber,
isn't it reasonable they should buy it, rather than enforcing the
trade offset?  (I'm not sure I'm using the technically correct word,
but it will do).  As I understand the situation, many developing
countries will buy goods of certain kinds ONLY if the selling country
will in return buy unrelated goods that the developing country can't
otherwise easily sell.  You can see their point, but it means that
the selling Government has to get into the act to persuade somebody
not the least interested in the primary deal (lumber) to buy something
they would not otherwise buy (textiles).  Protection of the industry
producing the secondary product (textiles) is a separate issue that
may complicate the whole mess.  If Indonesia wanted its offset in
something someone in Canada wanted to buy, matters would be easier.

I have mixed feelings about trade offsets.  On the one hand they
increase the volume of world trade in a way that probably benefits
the country imposing the offset, and on the other they force Governments
into the position of brokers trying to find buyers for things that
may not have a reasonable market, in order that other people may
sell things that have a reasonable market.
-- 

Martin Taylor
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