Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.1 6/24/83; site ubc-cs.UUCP Path: utzoo!utcsri!ubc-vision!ubc-cs!acton From: acton@ubc-cs.UUCP (Donald Acton) Newsgroups: can.politics Subject: Re: High Duties => Increased Competitiveness? Message-ID: <24@ubc-cs.UUCP> Date: Wed, 25-Sep-85 23:41:28 EDT Article-I.D.: ubc-cs.24 Posted: Wed Sep 25 23:41:28 1985 Date-Received: Thu, 26-Sep-85 02:44:18 EDT References: <1394@utcsri.UUCP> <2188@mnetor.UUCP> <2223@mnetor.UUCP> <14@ubc-cs.UUCP> <1692@watdcsu.UUCP> <2550@watcgl.UUCP> Reply-To: acton@ubc-cs.UUCP (Donald Acton) Organization: UBC Department of Computer Science, Vancouver, B.C., Canada Lines: 53 Summary: In article <2550@watcgl.UUCP> jchapman@watcgl.UUCP (john chapman) claims: >> "The North-South Institute in Ottawa estimated in 1981 that consumers >> had to pay an additional $500 million for their clothes, or about $83,000 >> a year for every job saved." (That works out to about 6000 jobs.) > >Normally I'm willing to take this kind of information at face value >but it's pretty hard to believe these figures without some explanation. >What are they using as a base price for clothes? Perhaps the labour >component of the cost of shoes is relatively small so that any increase >in the price of materials is a high percentage increase in the retail >price. Since these figures come from the North-South institute are >they for Canada & US (& maybe Mexico) in which case they work out to >< $2/yr/person (pretty small) or are they just for Canada? The Canada West Foundation has done similar calculations and has taken the total amount of import duties and used that as a basis for determining the costs associated with protectionism. (That is, the costs attributable to other artificial barriers like quotas weren't even considered.) They determined that import duties alone cost every man, women and child in this country $136.62 (1983). If translated into manufacturing jobs this amounts to a subsidy of $2,028.58 for each job. This is considerably less than the $83,000 cited above, however it considers all manufacturing not just a specific industry and it doesn't include the extra costs attributed to quotas and the like. The Foundation did further calculations to see where in the country these benefits accrued. Low and behold if they didn't discover that the four Western provinces and the Maritimes lost $544 million. This is how much more those regions paid in duties then they received in subsidized manufacturing jobs. Ontario and Quebec on the other hand gained $544 million. Ontario only has 35.4% of Canada's population yet it has 50.4% of the manufacturing jobs while Quebec with 26.2% has 28% of the manufacturing jobs. If free trade were to come about the short term loser would certainly be Ontario while the rest of country would get to enjoy reduced prices on consumer goods. However, I firmly believe that the manufacturing industries could survive the blow to their egos and eventually become competitive. (In a separate article this past weekend it was pointed out that the duty on clothing is 22%.) One of the arguments often put forward in favour of tariffs is that it protects immature industries or allows old ones to retool to become competitive. The problem with this is that these industries never seem to get big enough or strong enough to come out from under the protectionist umbrella. For example the shoe and textile industries have advocated and received protectionist tariffs for over 15 years now. They always argue that they need just a few more years to get new equipment and become competitive. Once they get the tariffs they seem to forget all about modernizing and continue on in their old ways. If industries knew that they would never be able to have any tariffs imposed then we wouldn't be in the situation we are now. Donald Acton