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From: peterr@utcsri.UUCP (Peter Rowley)
Newsgroups: can.politics
Subject: Re: High Duties => Increased Competitiveness?
Message-ID: <1395@utcsri.UUCP>
Date: Mon, 16-Sep-85 15:49:47 EDT
Article-I.D.: utcsri.1395
Posted: Mon Sep 16 15:49:47 1985
Date-Received: Mon, 16-Sep-85 16:20:34 EDT
References: <1394@utcsri.UUCP> <2188@mnetor.UUCP>
Distribution: can
Organization: CSRI, University of Toronto
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> = me (peterr@utcsri)
+ = Chris Lewis (clewis@mnetor)
/ = Fred Williams (fred@mnetor)

>OK, you free trade buffs, here's another one for you.  What's wrong
>with this argument (if anything)?
>
>1. Japan has had high import duties for a long time.
>2. Japan's industry is highly competitive in the world market.
>3. Canada's duties have been lower than Japan's for a long time.
>4. Canada's competitiveness is less than Japan's in the world market.
>
>Therefore, we should RAISE duties so our industry can become
>competitive like Japan's.

+You left out several other variables.  Particularly, salaries.
+Japan's cost of production is so much lower than ours that their
+import duties probably don't make any difference overall.

Finally!  We admit that duties and competiveness are not the only variables
around.  I agree, of course.  My original posting was simplistic on purpose;
designed to lure the ever-eager net predators into a trap (heh heh).
+
+Therefore, we should ...
+	1) LOWER the salaries for our workers so that our industry
+	   can be more price-competitive.
+... elimination of
+import duties may put pressure on (1).

But, sigh, there they go again thinking that anything economically good
can be caused by lowering duties.  There are other variables, remember?
In fact, before this can be proposed, let's find out why the duties in
Japan don't cause wage inflation.  Maybe we can do what they do.

/The point is that correlation between
/two phenomena does not  necessarily imply causality.  There has to
/be more to it.  For my two cents worth, I think higher trade
/barriers at this time would be bad for us. We want to take as much
/advantage of the inflated American dollar as possible, bearing in 
/mind that if our dollar "strengthens" and becomes more valuable
/then the shoe will be on the other foot, and American goods will be
/cheaper.

Yes, of course there is more to it.  A lot more.  Free trade is NOT a simple
issue.  If the government wants to bring in legislation that will increase
competitiveness yet at the same time provide for people who will be displaced
(both for their benefit and mine-- I do not want parts of Canada to be
ravaged by unemployment and the resulting crime and riots that have hit
Britain, for example) and will bring in effective anti-combines legislation
and will, at the same time, maintain levels of product and service safety
and cultural and political sovereignty, then they will have my support.

I'm not arguing for the status quo.  On the contary, I believe real changes
have to be made in the relationship between employer and employee if any
real progress is to be made in terms of productivity.  But I believe it is far
more effective to make reasoned changes in existing structures rather than
to stress them (e.g. with free trade), see which break, and throw those away.
It is just too expensive (especially in human terms) to do that on a national 
scale.

p. rowley, U. Toronto