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vcczar

2020 Scenario Issue: Free Trade

Free Trade 2020 Issue  

11 members have voted

  1. 1. Did you read the first comment in this thread?

  2. 2. Which issue stance best reflects the reality of the free trade issue on a Left-Right Spectrum?

    • The Default
      0
    • Thr33's first alternative
    • Thr33's second alternative.
  3. 3. Can you offer any suggestions (post below)?



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I need some help with the Free Trade Platform Stances. I will show you what I currently have, and then show you two of  @thr33's suggested alternatives. 

Default stance (from December 2016 when I made the scenario):

  • Far-Left: Protect American Labor; punish companies that send jobs overseas
  • Left: Increase taxes on companies that send jobs overseas; free trade must include labor and environmental conditions. 
  • Center-Left: Consider new free trade deals carefully, and create incentives to keep jobs in America.
  • Center: Free Trade is doing fine as is. The American corporate and labor culture is coping.
  • Center-Right: Outsourcing is not a problem, it is part of a globalized world and helps America. Additional free trade agreements.
  • Right: By outsourcing the U.S. frees up a lot of laborers to go on to better jobs. Global free trade would only help America.
  • Far-RIght: We need to encourage businesses to do whatever is necessary to generate profit.

@thr33 first alternative:

  • Far-Left: Protect the American labor market. Punish companies that send jobs overseas and end free trade. Consider tariffs as often as necessary.
  • Left: Consider new Free Trade deals carefully, and create incentives to keep jobs in America. Free trade must include labour conditions. Use tariffs as a last resort.
  • Center-Left: Free Trade both makes products cheaper to Americans by giving access to new markets, but it helps raise other countries out of poverty. 
  • Center: Free Trade is doing fine as is. The American corporate and labor culture is coping.
  • Center-Right: Outsourcing is not a problem, it is part of a globalized world and helps America. Additional free trade agreements should be pursued, even with concessions.
  • Right: By outsourcing the U.S. frees up a lot of laborers to go on to better jobs. Global free trade would only help America and her partners, and multilateral deals will help the most.
  • Far-Right: The more Free Trade, the better. If we remove barriers, it makes the free market freer. We should actively seek out opportunities for trading blocs.

@thr33 second alternative: 

  • Far-Left: Free Trade often hurts the working class and is at odds with organized labour. Prioritize the needs of our workers, not multinational corporations, and demand language protecting the environment.
  • Left: Consider new Free Trade deals carefully. We should pursue agreements that improve labour and environmental conditions for both the American and foreign worker.
  • Center-Left: Free Trade both makes products cheaper to Americans by giving access to new markets, but it helps raise other countries out of poverty. 
  • Center: Free Trade is of benefit to the worker, the consumer, and the market. It also improves standard of living in developing countries with which we partner.
  • Center-Right: Outsourcing is not a problem, it is part of a globalized world and helps America. If we remove barriers, it makes the free market freer. Join trading blocs when possible.
  • Right: We should have Free Trade, on our terms. Our goal should be to pursue tough agreements that benefit the American worker and consumer. Tariffs as a last resort.
  • Far-Right: Other countries are ripping us off, Free Trade has failed the American worker and business. We should pursue Fair Trade. Only accept bilateral agreements, and consider tariffs often.

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2 hours ago, vcczar said:

I need some help with the Free Trade Platform Stances. I will show you what I currently have, and then show you two of  @thr33's suggested alternatives. 

Default stance (from December 2016 when I made the scenario):

  • Far-Left: Protect American Labor; punish companies that send jobs overseas
  • Left: Increase taxes on companies that send jobs overseas; free trade must include labor and environmental conditions. 
  • Center-Left: Consider new free trade deals carefully, and create incentives to keep jobs in America.
  • Center: Free Trade is doing fine as is. The American corporate and labor culture is coping.
  • Center-Right: Outsourcing is not a problem, it is part of a globalized world and helps America. Additional free trade agreements.
  • Right: By outsourcing the U.S. frees up a lot of laborers to go on to better jobs. Global free trade would only help America.
  • Far-RIght: We need to encourage businesses to do whatever is necessary to generate profit.

@thr33 first alternative:

  • Far-Left: Protect the American labor market. Punish companies that send jobs overseas and end free trade. Consider tariffs as often as necessary.
  • Left: Consider new Free Trade deals carefully, and create incentives to keep jobs in America. Free trade must include labour conditions. Use tariffs as a last resort.
  • Center-Left: Free Trade both makes products cheaper to Americans by giving access to new markets, but it helps raise other countries out of poverty. 
  • Center: Free Trade is doing fine as is. The American corporate and labor culture is coping.
  • Center-Right: Outsourcing is not a problem, it is part of a globalized world and helps America. Additional free trade agreements should be pursued, even with concessions.
  • Right: By outsourcing the U.S. frees up a lot of laborers to go on to better jobs. Global free trade would only help America and her partners, and multilateral deals will help the most.
  • Far-Right: The more Free Trade, the better. If we remove barriers, it makes the free market freer. We should actively seek out opportunities for trading blocs.

@thr33 second alternative: 

  • Far-Left: Free Trade often hurts the working class and is at odds with organized labour. Prioritize the needs of our workers, not multinational corporations, and demand language protecting the environment.
  • Left: Consider new Free Trade deals carefully. We should pursue agreements that improve labour and environmental conditions for both the American and foreign worker.
  • Center-Left: Free Trade both makes products cheaper to Americans by giving access to new markets, but it helps raise other countries out of poverty. 
  • Center: Free Trade is of benefit to the worker, the consumer, and the market. It also improves standard of living in developing countries with which we partner.
  • Center-Right: Outsourcing is not a problem, it is part of a globalized world and helps America. If we remove barriers, it makes the free market freer. Join trading blocs when possible.
  • Right: We should have Free Trade, on our terms. Our goal should be to pursue tough agreements that benefit the American worker and consumer. Tariffs as a last resort.
  • Far-Right: Other countries are ripping us off, Free Trade has failed the American worker and business. We should pursue Fair Trade. Only accept bilateral agreements, and consider tariffs often.

Ultimately, free trade is a right-wing plank in the modern day, and protectionism is left-wing. It doesn't matter, in my opinion, that Trump is the incumbent Republican President. In scenarios I've made, I've not shied away from giving certain candidates or leaders certain planks on issues on the opposite side of the spectrum as their party generally favours. For example, Ron Paul, despite running as a Republican in 2008 and 2012, should have Left or Far-Left on most military, intervention, and war on terror based issues, while Bill Clinton was to the right on Trade issues.

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28 minutes ago, Patine said:

Ultimately, free trade is a right-wing plank in the modern day, and protectionism is left-wing. It doesn't matter, in my opinion, that Trump is the incumbent Republican President. In scenarios I've made, I've not shied away from giving certain candidates or leaders certain planks on issues on the opposite side of the spectrum as their party generally favours. For example, Ron Paul, despite running as a Republican in 2008 and 2012, should have Left or Far-Left on most military, intervention, and war on terror based issues, while Bill Clinton was to the right on Trade issues.

I agree. 

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On 3/6/2018 at 2:34 PM, vcczar said:

I agree. 

Interesting that the third option was voted on by Left-Wing users and the second by you plus two vocal conservatives. It is interesting to see how ideology shapes opinions of opposing ideology.

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12 hours ago, Reagan04 said:

Interesting that the third option was voted on by Left-Wing users and the second by you plus two vocal conservatives. It is interesting to see how ideology shapes opinions of opposing ideology.

The second option makes a lot more sense to me, and I'll probably use it regardless of the vote. Here's why. Trump was able to convert some Midwest Democrats because of this policy, which was originally considered a liberal policy. Although, historically, the Republicans were the protectionist party, and they were considered to be more conservative in business/commerce. 

Personally, I think protectionism makes little sense in these last 100 to 110 years. If you look at protectionist countries, they are usually countries with developing economies, and need the tariff to allow their industry to grow with some protection against competition. Africa has a lot of protectionist countries last time I looked. 

I do agree with tariffs if there is a serious employment problem, and the tariff is more likely to help than not. 

You might find this surprising since you and other conservatives might think I'm a Socialist, but I'm only a Progressive (I'd say way more realist than Elizabeth Warren; Pelosi and Clinton are liberal--not progressive). A true Progressive seeks to consistently push forward, gathering whatever ideas (Democratic, Republican, Socialist, Libertarian, Green, etc.) to make that push to advancement, modernization, peace, society's welfare, and the gradual lessening or abolition of ideas, traditions, institutions that prohibit or slow down this advancement. 

Free Trade, as opposed to Protectionism, in most cases has more benefits than drawbacks, both domestically and abroad. A better tactic would be to keep the tariff as it is, but work to innovate the steel and aluminum industry in the country with the idea that in 7 or 10 years that people will prefer American steel and aluminum, even if it is a tad more expensive. Tariffs often result in reciprocity by other countries. In an age of globalization, it makes little sense to tariff, as countries could just seek goods and trade elsewhere. 

I think Trump is using the tariff as a bargaining chip for a NAFTA deal. He does something potentially dangerous (the tariff) purposely to hold Congress hostage (Withdraw from NAFTA or the Tariff of Abomination 2.0 stays). This is actually a Steve Bannon tactic, but it is used with policy, which is interesting.

The Bannon campaign tactic involves getting people to accept something that is somewhat more radical than they would like. Let's say everyone was Center-Right on an issue. Bannon would have Trump use rhetoric that appears Far-Right until people complained. Then Trump, generally in a quieter arena, like in an interview, will then tone it down to Right. People then accept it because the mind will often only compare two things. In this case, the Far-right with the Right. Studies have shown this is the case with advertising for magazine subscriptions. A consumer will pay for a more expensive subscription price, if it is compared with a much more expensive rate, so people feel like they're getting a better deal. 

Now that I'm saying this. I could see Trump waiting to see if Congress bites on NAFTA, and then if they don't. I could see him reducing the tariff. He could claim a win, because the tariff is still protectionist. Congress, the people, and foreign countries might fall for the Bannon trap of accepting the light tariff, when this is still much worse than it was when there wasn't a Trump tariff in the first place. 

I'm a little surprised that Trump is even trying to mess with trade and the economy, considering its the one thing that's keeping his approval rating at 40%. If he wrecks the economy, then I see the party turn on him. If I were a Republican, I'd agree with Jeff Flake that Trump's policy is something that should be expected from the Democrats. Although, Flake is being very misleading as only about 20% (more for rhetoric only) of Democratic politicians would support a tariff (still way more than Republicans). Both parties are free trade parties, despite the rhetoric. 

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@vcczar

Tariffs only work broadly in two contexts - in countries with underdeveloped economies/industries (which is what you described when speaking of 1800s America), and in second-best situations. That's just the microeconomic reality. I'd like to share this post from stackexchange, which gives the arguments (from credible leftist economists at Cambridge and Harvard) coherently:

Quote

I interpret your question more broadly as one about whether protectionism has ever "worked". Two economists that think it has are Chang Ha-Joon and Dani Rodrik. You can therefore look up their work.

Two arguments they use are:

  1. The infant industry argument.

In a 2007 article, Chang gives various examples of protectionism "working", including the US in the 19th century:

the US shifted to protectionism after the Anglo-American War of 1812. By the 1830s, its industrial tariff rate, at 40-50 per cent, was the highest in the world, and remained so until the Second World War.

The other oft-cited examples are East Asian economies like Japan, Korea, and Taiwan in the postwar era.

  1. The second-best argument.

The world is a second-best place and so movements towards seemingly-freer trade may not always be a good thing. Classic example as told by Rodrik (2015):

imagine that beef is supplied by the United States to Germany at a price of $100. Assume that Germany imposes a tariff of 20 percent, raising the consumer price of US beef in the German market to $120. France, meanwhile, can supply beef of equivalent quality only at a price of $119. Prior to the preferential agreement between France and Germany, French suppliers, facing the same tariff rate as US producers, were outcompeted. Now consider what happens when Germany eliminates its tariffs on imports from France but keeps in place those on the United States. French-supplied beef suddenly becomes cheaper in Germany ($119 versus $120), and imports from the United States collapse. German consumers are better off by $1, but the German government forfeits $20 of tariff revenue previously collected on US beef (which could have been handed back to consumers or used to reduce other taxes in Germany). On balance, Germany gets a raw deal.


Two footnotes.

  1. Evaluating whether something has ever "worked" is fiendishly difficult in economics.

First we have to decide what the goals of the policies were and what would count as "working". Then we have to do the empirical analysis and evaluate quantitatively the degree to which the policies "worked".

So while Chang and Rodrik might give examples of protectionism "working" (19th-century US, Japan, Korea, Taiwan), other economists might disagree that protectionism really "worked" in these cases. Indeed, I am not aware that Chang or Rodrik has actually conducted any empirical analyses on this matter.

  1. Chang and Rodrik merely try to argue against the extreme position that free trade is always a good thing for everybody and in favor of the modest position that protectionism has sometimes"worked".

Most (all?) economists, including Chang and Rodrik, would agree with the following statements:

  • Free trade is generally a good thing for most people.
  • Tariffs are generally a bad thing for most people.

In contrast, a significant portion of the general public would disagree.

I'm not going to presume I know Trump's thinking, but here are my thoughts:

• Trump has been governing as a pretty run-of-the-mill conservative for the most part. Pulling out of TPP was really the only move that bucked (modern) conservative orthodoxy, and that was well over a year ago (though many also supported pulling out of the Paris Agreement and cutting environmental regulations). Based on the results from special elections, the people who are not turning out so far? The 08 Obama-16 Trump voters. Exurban and rural white working class voters. They aren't voting for Democrats: they just aren't showing up. This could spell big trouble in both midterms (where the out-party always has systemic disadvantages, and tends to lose seats in the first midterm) and in 2020. These people didn't vote for Trump because he's a conservative, they didn't vote for Romney after all. Culture wars can only motivate them so much, they really swung on the basis of trade and immigration. The Stock Market isn't making a big difference in their lives, and the Tax bill only marginally so (most probably fall into the category of working poor as opposed to middle class). For this group, tariffs show them Trump is serious.

• As for the NAFTA argument, I agree to some extent that it was a play in that regard, but I don't think the intended audience was Congress. Negotiations have been underway since late last summer, and there have been over a half dozen week-long working sessions between the delegations from the three countries. Lighthizer (who was the Deputy Trade Rep under Reagan when he levied a lot of his tariffs) has been making demands in line with Trump's rhetoric. He wants to change thresholds for part origin rules for automobile manufacturing. He wants to shift the dispute mechanism so American government and industries have more control. He wants provisions that handle trans-shipping of steel, iron, and other dumped products. He also wants Mexico to improve its labor laws (which was one of the big issues with NAFTA and CAFTA, and is an issue in TPP - if countries have no worker protections or minimum wage, and a trading bloc is created, manufacturing will  move to the country in the bloc with the most lax laws). The administration is probably much more likely to settle on a renegotiated NAFTA, which will likely pass in Congress (if Trump does try to withdraw, I imagine he would face resistance; this is my preferred move, and I'd rather settle on two new bilateral deals, but I'm out of the mainstream).

• I do think the bulk of the Dems believe in Free Trade and are probably center to center-right on economics. This is an artifact of the bulk coming up through the DLC (Democratic Leadership Council) in the Clinton/Third Way era. Now there are some exceptions, most notably the Members of Congress and Senators who were in government prior to 92 (though you also have a few outliers like Warren, Brown, Merkley). The bulk of the GOP in Congress is as well. Evidently 107 representatives signed a letter asking Trump not to go through with the signing. I assume there were several dozen more who would have done so, but didn't want to risk distancing themselves from the admin because they're vulnerable in midterms.

One final note - the other two super-entities in the world economy (China and the Eurozone) both are highly protectionist (China has high barriers to entry, and the EU utilizes both VATs and tariffs). Even with tariffs, most other countries really can't afford not to trade with the US, since they have export-driven economies. I'm an economic leftist, but if all partners are willing to comply, I think free trade is probably the optimal solution to the market problem. I would like to share this paper though, attached see the key graphic, with the following explanation from an economist: "They find a positive impact on US welfare of a 40% uniform tariff. Negative but limited (~-1%) for a worlwide tariff. But strongly negative on Western Europe or China."

tariffs.png

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There's a lot in the above post, but here's an article from one of the leading paleoconservatives (Justin Raimondo of antiwar.com) from a couple years ago during the last primaries that sums up the grievances with those on the "old" right with 'free trade' in its current incarnation.

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@thr33 Thanks, I'll take a look at this more closely. I sort of sped read it, and I need time to reflect. I guess what I want to know, specifically and concisely, is in what way might you be disagreeing with my previous post. 

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6 minutes ago, vcczar said:

@thr33 Thanks, I'll take a look at this more closely. I sort of sped read it, and I need time to reflect. I guess what I want to know, specifically and concisely, is in what way might you be disagreeing with my previous post. 

Sorry, just two things really:

(1) That there's a secondary argument for when tariffs work (the second-best argument of Rodrik) in addition to the developing economies instance which you correctly noted.

(2) That the tariffs are a ploy to scare Mexico/Canada into making a move more than Congress (there have been a ton of talks but nobody is budging, so I think this is an attempt to apply pressure in negotiations). EDIT: On NAFTA to be clear

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7 minutes ago, thr33 said:

Sorry, just two things really:

(1) That there's a secondary argument for when tariffs work (the second-best argument of Rodrik) in addition to the developing economies instance which you correctly noted.

(2) That the tariffs are a ploy to scare Mexico/Canada into making a move more than Congress (there have been a ton of talks but nobody is budging, so I think this is an attempt to apply pressure in negotiations). EDIT: On NAFTA to be clear

I see. In regards to #2, I haven't heard much from Mexico or Canada in this regard. Congress seems to be reacting more than our neighbors are. 

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3 minutes ago, vcczar said:

I see. In regards to #2, I haven't heard much from Mexico or Canada in this regard. Congress seems to be reacting more than our neighbors are. 

Ah okay gotcha. These might be a good read on how Mexico/Canada are reacting (some of it is probably frustration given round 7 just wrapped up, though it was one of the more productive rounds from my understanding):

https://www.politico.com/newsletters/morning-trade/2018/03/05/the-steel-elephant-in-the-room-at-nafta-round-7-123039

https://www.wsj.com/articles/mnuchin-tariffs-wont-apply-to-mexico-canada-if-nafta-is-reworked-1520355429

I'm not surprised that Congress is speaking out though, for the reasons you outlined above (RE:where they stand ideologically).

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@thr33's second alternative is by far the most realistic in a nowaday(2015 onwards) political landscape.

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3 hours ago, Rodja said:

@thr33's second alternative is by far the most realistic in a nowaday(2015 onwards) political landscape.

I disagree. This strikes me as a move to twist around stances of issues to match the typical stance of parties of the most prominent candidates, and, from my past experiences making scenarios for TheorySpark games (since 2007) that ideal quickly makes messes out of issues and stances for any scenario.

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