Friday, February 6, 2004

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The EU turns further inward

There are inherent tensions in the phrase "liberal democracy." The liberal part implies the protection of individual rights. The democracy part implies that those areas of policy requiring collective decision making will reflect majoritarian preferences. The tension is over what spheres of social, political, and economuc life should be protected against democratic rule -- or, to turn it around, what constraints should be placed on individual freedoms for the good of the whole.

I bring this up because the European Union's trade commissioner is considering a wholesale rejection of the liberal part of this equation. According to the Financial Times:

Governments would be allowed to ban imports from countries that did not share their national values and standards under proposals for radical changes to global trade rules being studied by Pascal Lamy, Europe's trade commissioner....

The paper says legalising curbs on imports that do not meet individual societies' "collective preferences" would promote global economic integration by reducing international tensions....

[T]he paper says the WTO rules give too much weight to science and too little to local social and political sensitivities.

The paper does not detail what kinds of imports the European Union might want to restrict. However, it says divergent national regulations and public attitudes worldwide threaten to create growing trade frictions over environmental policy and in sectors such as agriculture, services, software and pharmaceuticals.

The paper insists it is not seeking a pretext to erect new import barriers. However, it acknowledges that economic liberals and developing countries - long hostile to efforts to link trade and social standards - might attack the idea as protectionist and Eurocentric. (emphasis added)

The highlighted section reflects just how Eurocentric this report would be. If the EU chose to implement this policy, it probably would promote greater European integration (via trade diversion). It would also probably reduce European tensions over trade.

However, it would also succeed in reducing global economic integration -- as well as pissing off just every other country in the world. How the papers' authors believe that this step would actually boost integration and reduce tensions outside of Europe is beyond me.

Unless they think that Europe is the world.

UPDATE: Rich Kleinman offers a thoughtful rejoinder:

[Y]ou don't pay enough attention to the fact that the reasons the tariffs could be imposed are actually barriers to democracy. The extreme example that I am thinking of here is slavery. If another nation was selling goods to Europe that were produced by slaves how would limiting that trade be a problem.

Rich makes a valid point, and in the abstract I agree that on trade matters, circumstances exist in which broad-based democratic values should trump individual liberties.

However, three things frost me about this story:

1) When one considers recent EU trade history -- it's hard not to believe that this policy would not do much more harm than good -- both to the European and global economy;
2) The stated policy would have collective decision-making always trumping individual choice;
3) The paper's reported argument that the EU decision to jack up tariffs willy-nilly will somehow promote integration and reduce conflict is so completely wrong-headed that I'm amazed that it's being advanced.

posted by Dan on 02.06.04 at 11:04 AM




Comments:

The Old Europeans are losers. They now want everyone else throughout the world to go over the cliff with them. The so-called “national values and standards” are based on nothing more than institutionalized socialism and anti-Americanism. But all hope is not lost: these “proposals for radical changes” aren’t likely to go anywhere. Instapundit has just posted the following story concerning the political decline of Gerhard Schroeder.

http://medienkritik.typepad.com/blog/2004/02/schroeder_on_th.html

Anti-American policies are doomed to fail in the long run. Common sense usually wins out.

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Of course, it's not like the EU is exactly suffering from a surfeit of democracy, either.

posted by: Crank on 02.06.04 at 11:04 AM [permalink]



Before we all get too morally superior, remember that the Democratic line on trade, as enunciated by Gephardt et al is really pretty similar to this.

posted by: alonzo church III on 02.06.04 at 11:04 AM [permalink]



That's the first thing I thought Crank.
EU liberal democracy has the same problem as the Holy Roman Empire (neither holy, nor roman, nor an empire). The problem with the transnational progressive school of thought is that the simple, direct, general type of constitution and bill of rights we have is rejected in favor of a micromanaged, constantly shifting constitution. That is dangerous. Our constitution and BOR is designed to protect individuals and minorities from the majority embodied by government. The EU version sets up government as the means to proactively defend the minority from the majority, and hence, government can never be allowed to reflect the majority to much, at the expense of democracy. The rub is that this ends up both tyranizing the majority and limiting democracy. Instead of constraining the government, they empower the government. That is a recipe for fascism.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



“Before we all get too morally superior, remember that the Democratic line on trade, as enunciated by Gephardt et al is really pretty similar to this.”

Senator Joseph Lieberman has dropped out of the race. He was the last chance for those Democrats hoping for rational military and economic policies. Richard Gephardt explicitly states what is tacitly the unofficial position of the Democrat Party. He is bluntly candid while the the others are mealy mouthers. Saving outdated jobs and embracing anti-free trade nostrums are mandatory positions for anyone seeking to be that party’s presidential nominee. The Bill Clinton of 1992 would not stand a chance in 2004. President Bush admittedly has not exactly covered himself with glory on this issue. However, the Republican Party is the lesser of evils. It will usually opt for the more sensible economic policies in the majority of instances.

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



What the hell is wrong with some countries, be they European or wherever, deciding that they wish not to receive certain products from other countries via trade/importation? Seems to me it is up to the people in those countries to decide this. God, what elitist attitude gives you people the right to tell other people that they have to accept your products or else?

posted by: RRF on 02.06.04 at 11:04 AM [permalink]



“What the hell is wrong with some countries, be they European or wherever, deciding that they wish not to receive certain products from other countries via trade/importation? Seems to me it is up to the people in those countries to decide this. God, what elitist attitude gives you people the right to tell other people that they have to accept your products or else?”

Nobody is telling the Old Europeans that they can’t commit economic suicide if they decide to do so. Some of us are merely pointing out the error of their ways. Still, they have the ultimate right to make fools of themselves.

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Elitism is the attitude that it's the country (or in the EU, the country's elites, since EU positions aren't elective) that gets to tell the citizens what they can and cannot buy from abroad "or else." Suppose that as an individual in the US you want to purchase French wine; who are your neighbors, even if they are in the majority, to tell you that you cannot do so because they wish to punish France for its opposition in the UN? That's what "legalising curbs on imports that do not meet individual societies' 'collective preferences'" is about.

posted by: Joshua on 02.06.04 at 11:04 AM [permalink]



I've never understood the opposition to having standards for those we trade with. Yes, those standards can be used as a cover for old-school protectionism, which is definitely not a good thing, but that can be defended against through open debate and elections. To take an extreme example, if there were a country that still openly and deliberately practiced slavery, a la the mid-19th century, would the principle of free trade trump the moral obligation to oppose that practice? Should we continue to trade with that country, profiting from the low prices their system of slavery would provide? I think not. So why is it so much more ridiculous to say that countries who don't meet minimum standards of human rights and environmental protection don't get to trade with us? Why should we have an obligation to trade with countries whose practices are morally repugnant to us?

posted by: Dave on 02.06.04 at 11:04 AM [permalink]



“I've never understood the opposition to having standards for those we trade with.”

I completely agree with your point in the abstract sense. Nonetheless, I’m afraid that the Democrats and “Oldman” Republicans are using this very justified principle to enact very damaging trade protectionist legislation. They will define it to the point that we prohibit trade with just about everybody who does not reside in a utopian society. We must clearly understand something right here and now: the powerful union bosses are deceitful sleaze bags. They will throw any crap at the fan and hope it sticks to protect their power base. No Democrat presidential nominee dares to oppose them.

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



The best way to explain the problem with the Democratic -- they must adopt our standards or be tariffed -- approach is this:

Imagine the EU (or France) adopted such a policy. We would be be subject to EU tariffs until we (i) ratified Kyoto and complied with it and (ii) we would all be required towork 35 hour weeks.

posted by: alonzo church III on 02.06.04 at 11:04 AM [permalink]



The European Union already today apply protectionism towards Non-European countries. Free trade is limited within the union. But with the expansion coming up in less than 3 months (May 1st) we will se protectionism within the union as well. Almost all member countries will have certain laws directed against the people from Eastern Europe, free movement of labor will be abandoned. This is the reality of European politics, the pretty words of uniting the world are just pretty words, the welfare state are more important when it comes to it. And the welfare state are already in ruins.

posted by: Dennis on 02.06.04 at 11:04 AM [permalink]



I think the problem with trying to impose standards upon other countries, no matter how well-intentioned, is that they are likely doomed to fail. With much hesitation, considering Mr. Drezner's expertise in the area, I suggest we consider the failure of sanctions (for that is surely what these 'value-motivated' trade restrictions are) to bring about meaningful change in Cuba, Iraq, and North Korea. Indeed, if we consider that what makes dictatorships so difficult to topple peacefully is their success in limiting the ability of any opposed people or groups to gain political power, then the question becomes - how can we encourage the growth of a significantly powerful opposition?

If we believe, as it seems much of the modern left does, that economic power, can be translated into political power relatively easily, then why not encourage the economic growth of these countries in order to foster the possibility of a political counterweight? I can't say that this will always work, as those in political power often control the economy, but I think there remains the possibility that it can happen, while I hold no such illusions about the power of sanctions to affect change. To my mind, we are seeing the growth of a check on governemnt power due to expanded trade in China today.

Unfortunately, I think that much of the left in both Europe and America are dogmatically opposed to the intrusion of powerful economic actors into the political sphere, and refuse to accept that it may be the path to political power with the least resistance in a political dictatorship. Considering the substantially greater degree of political freedom enjoyed in the 'market economies' than anywhere else, it is difficult to understand why this irrational fear that market forces will undermine, rather than encourage, democratic ones still holds so much sway.

posted by: Patrick on 02.06.04 at 11:04 AM [permalink]



“Imagine the EU (or France) adopted such a policy. We would be be subject to EU tariffs until we (i) ratified Kyoto and complied with it and (ii) we would all be required towork 35 hour weeks.”

I know that this is an extreme example (I'm definitely pushing the envelope), but what if the Old Europeans demanded that we reversed our current laws outlawing sex with animals? Sweden decriminalized bestiality back in 1944.

“Swedes have more and more animal sex

Av Øyvind Ludt og Carin Pettersson 26.01.04 12:24

Animal sex is not illegal in Sweden, and every year between 200 and 300 pets are injured because of sexual assaults.


The estimate was presented by Svenska Veterinärforbundet, the Swedish veterinary organization, and it is now trying to make the authorities and the public more aware of animals’ suffering. The organization claim the problem has increased during the last couple of years, even if most people are unaware of it.


....In contrast with most other countries, animal sex is not illegal in Sweden. It was decriminalized in 1944 in connection with the decriminalization of homosexual sex.”

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Daivd Thompson: "what if the Old Europeans demanded that we reversed our current laws outlawing sex with animals?"

You know, I'm really glad that David Thompson posts here. My expectations for the standard of conservative political discourse just wouldn't be upheld otherwise.

But let's leave Thompson with the Santorum running down his dog's leg and take up a slightly less, um, representative comment:

alonzo church III: "Imagine the EU (or France) adopted such a policy. We would be be subject to EU tariffs until we (i) ratified Kyoto and complied with it and (ii) we would all be required towork 35 hour weeks."

I guess that ACIII must be really jonesing on that Protestant work ethic. Leaving aside Kyoto -- since we will eventually have to take action against global climate change in any case -- what is wrong with a 35 hour week? Weeks used to be far longer than 40 hours. How and why does ACIII think they were shortened? And who benefits from keeping them long? Hint: productivity, one basic measure of how rich a society is, is based on work done per hour, not per worker. Seoncd hint: worker wages were not 50% higher than they are now, including inflation, when weeks were 60 hours long.

posted by: Rich Puchalsky on 02.06.04 at 11:04 AM [permalink]



Dave --

If you don't like the way the French or the Chinese act, don't buy French or Chinese products. I am quite capable of deciding on my own whether or not to buy French (or any other country's products). What is your problem with letting people make this decision on their own? Legislation of this nature is always, either overtly or covertly, an attempt to engage in naked protectionism.

posted by: Ben on 02.06.04 at 11:04 AM [permalink]



“Daivd Thompson: "what if the Old Europeans demanded that we reversed our current laws outlawing sex with animals?"

You know, I'm really glad that David Thompson posts here. My expectations for the standard of conservative political discourse just wouldn't be upheld otherwise.”

I concede that my example is extreme. Still, I have the facts on my side. Sweden allows sex with animals. Do you have a problem with it? If so, you should take it up with the Swedes. It’s not my problem.
Maybe you might like to give them a call:

Embassy Of Sweden, (202) 833-2077, 1501 M St NW, Washington, DC 20005 or email them at: ambassaden.washington
@foreign.ministry.se

“...what is wrong with a 35 hour week? Weeks used to be far longer than 40 hours. How and why does ACIII think they were shortened? And who benefits from keeping them long?”

We could care less what you think about working only 35 hours a week. Heck, you can work zero hours a week---if you are willing to endure the inevitable negative consequences. Most of simply do not wish for the Old Europeans to demand that we do likewise.

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Rich --

Um. Don't know that the Protestant work ethic has got me all, shall we say, Santorum-ed up.

I just figure it's uniquely arrogant for the US dictate what sort of economic policies other nations should have; and it would be just as arrogant for the EU to dictate to us what kind of economic policies we should have. And I am baffled that Democrats and the EU, usually so philosophically kumbaya, figure that they should bludgeoning other countries into adopting our economic legal system.

posted by: alonzo church III on 02.06.04 at 11:04 AM [permalink]



ACIII: "I just figure it's uniquely arrogant for the US dictate what sort of economic policies other nations should have" [...]

Dictate? Nonsense. All the EU would be saying, if they adopted these policies, is that if a country wants favorable trade terms with the EU, it has to adopt certain policies. A country is perfectly free to not adopt those policies, and not get favorable trade terms with the EU. We (the U.S.) do the same thing all the time, for instance, when we base trade terms on whether other countries uphold the U.S. scheme for intellectual property. The EU's trade policies are a matter for its own electorate, not any other country's, so your assertion that they should somehow be determined by what other countries want is an example of the exact situation you are denouncing.

posted by: Rich Puchalsky on 02.06.04 at 11:04 AM [permalink]



Rich:

Essentially, the EU is offering a choice: adopt our rich social benefits that inflate the cost of making everything, or we'll raise the price of your goods, so our higher priced stuff can compete back home. It's possible the folks in Brussels are so blinkered that they actually believe everyone will go: "Oh, OK."

But really, what will happen is there will be retaliatory tariffs across the world. You know, the usual reaction to across-the-board protectionism. It all seems rather unilateralist to me.

posted by: alonzo church III on 02.06.04 at 11:04 AM [permalink]



The Old Europeans will do about anything to stab us in the back. The following story indicates other possible future demands:

“BY JAMES TARANTO
Friday, February 6, 2004 3:52 p.m.

The Kerry Doctrine
John Kerry, as we've noted before, thinks that the war on terror isn't really war, but "primarily an intelligence and law enforcement operation." The New York Times reports from Hamburg, Germany, on an example of the Kerry Doctrine in action:


A German court on Thursday acquitted a former roommate of Mohamed Atta who was accused of providing support to suicide pilots in the Sept. 11, 2001, attacks.

The court cleared Abdelghani Mzoudi, the second suspect to be tried for involvement in the attacks, of accessory to murder and membership in Al Qaeda. . . .

"You are acquitted," said the judge, glancing at the defendant, who was allowed to leave jail in December. "Not because the court is convinced of your innocence, but because the evidence was not enough to convict you." . . .

The acquittal of Mr. Mzoudi is also a setback for the German government, which has asserted that terrorist suspects can be tried in criminal courts rather than in military tribunals, which the United States favor as a venue for many of the suspects it now has in custody.


Indeed. Also--let us hope--a setback for Kerry. Predictably enough, the Germans blame America for their decision to let Mzoudi go--specifically, "the Bush administration's reluctance to make captured terrorists available for testimony and to allow prosecutors to make use of intelligence information on the terrorist network." But does anyone doubt the administration is right not to want this information in open court?

Extending to the enemies of civilization the full panoply of due-process protections criminal defendants enjoy--the presumption of innocence, protection from self-incrimination, the right to a lawyer, and so on--makes it harder to gather intelligence and prevent future attacks. Three thousand people died on Sept. 11, but at least Mohamed Atta's civil liberties were never violated. Don't you wish they had been?”

http://www.opinionjournal.com/best/?id=110004659

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Ben:

"If you don't like the way the French or the Chinese act, don't buy French or Chinese products. I am quite capable of deciding on my own whether or not to buy French (or any other country's products). What is your problem with letting people make this decision on their own?"

The problem is that economic trade is as much a national foreign policy question as war and diplomacy. It's one of the chief sources of the United States' power to influence our allies and coerce our rivals/enemies. Reagan used trade issues to pressure the Soviet Union, Clinton used them entice the Chinese. Trade is really the only thing short of naked force that allows us, as a nation, to advance our interests on the global stage.

posted by: Dave on 02.06.04 at 11:04 AM [permalink]



I like Europe. They try to take care of the average person the best way they know how. I work for a Eurpoean company, and when things aren't going well, they fire the CEO and not the average worker. They treat us like human beings and not numbers to be pushed for productivity. My ancestors came from Denmark, do you think that they would let me immigrate back there? The direction of business in this country makes me ill.

posted by: Hi on 02.06.04 at 11:04 AM [permalink]



Wait a minute, arent the same democrats that are pushing for a litmus test who we trade with the same ones that have been trying to lift sanction on Cuba for the last 50 years? And many of the same people that opposed to Iraq sanctions? Note to democrats, 'trade sanctions' are standards. Its just a question of who the dems want to sanction. A country doesnt let its employees unionize? Oh, we cant trade with them. But Castro locks up librarians and shoots down civilian planes, sure, he's got great healthcare, we can trade with Cuba. Thats why I dislike the whole thing. Unless someone is an active adversary (like North Korea), we should trade with em openly. To do otherwise will inevitably devolve into eith ideological proxy fights or thinly vieled protectionism.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



"I like Europe. They try to take care of the average person the best way they know how. I work for a Eurpoean company, and when things aren't going well, they fire the CEO and not the average worker. "

I like America. If I have an employee that isnt worth a damn I can fire them without a mountain of red tape. This makes me _much_ more likely to hire new people, knowing im not married to them until they retire with a full pension at 52. As an employee I like the fact that 2/3rds of my paycheck arent going towards some looney government bureacracy, and that if my company goes out of business I can find another job because our economy is the best in the world.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



Very nice done, the turn-about bit, Mark

posted by: Art Wellesley on 02.06.04 at 11:04 AM [permalink]



Dan,

I´ve got a problem understanding your post.

And I might also add that I, as a European, oppose that paper. Better said, I´m opposed to the unclear words in that paper.
It could mean anything from a clearly worded political embargo of a real threat to a totally protectionist policy. And that´s worrying me.

However you only copied just a few "choice" sentences out of that FT article...

I did read that article.
And so I´m curious...
Ever heard about AMERICAN steel tarifs?
Against WTO rules?
Domestic American policy easily overruled WTO rules back then.
And you, just like the EU, do want to protect your farmers from foreign competition.

Getting all worked up about a "discussion paper prepared for Mr Lamy, who has not taken a position on the issue,..." is a bit puzzling?
For God´s sake it´s not an official proposal, much less OFFICIAL policy!

Not to mention - I might be wrong here - American opposition to a simple declaration on any food package that the food inside includes "genetically modified crops".

That was reported in European media at least.
I mean why oppose that, if true?
Let informed customers decide, right?
If they want to buy it....

But AFAIK the majority of European customers don´t like the idea of "hormone-treated beef" and "genetically modified crops".
Maybe that´s why the US administration is opposed to that proposal?

It is touching to hear the USA saying that "the measures violate World Trade Organisation rules, though many European consumers support them".
Remember steel tarifs?

And I´m just curious...
"Governments would be allowed to ban imports from countries that did not share their national values...."

You do have a trade embargo against Cuban goods IIRC, don´t you? Decades old?
Why aren´t we allowed the same thing?

Just asking?

Detlef

posted by: Detlef on 02.06.04 at 11:04 AM [permalink]



David Thomson:

"Indeed. Also--let us hope--a setback for Kerry. Predictably enough, the Germans blame America for their decision to let Mzoudi go--specifically, "the Bush administration's reluctance to make captured terrorists available for testimony and to allow prosecutors to make use of intelligence information on the terrorist network." But does anyone doubt the administration is right not to want this information in open court?"


Writing this is difficult.
Because as a German I´m deeply suspicious of Mzoudi.

However
"You were acquitted not because the court is convinced of your innocence, but because the evidence was not enough to convict you."

http://news.bbc.co.uk/2/hi/europe/3460875.stm

And intelligence information shouldn´t be a one way street!
Ever heard about reasonable doubt?
Not guilty unless convicted?
The court offered to hear the testimony and/or intelligence information without the public involved.
According to German media the USA refused the German court to question any captured terrorists.
Either in Germany, the USA or Guantanamo.

"But Judge Klaus Ruehle rejected the challenge, saying that the US authorities had not allowed Mr Binalshibh to testify during the trial so transcripts of his interviews could not be used."

I´m not happy with the results but it seems that we are more concerned with the substance of justice than the people who taught us about it after WW2.

And as an aside, Germany fought against terrorists since the 1970s. And we won, using the legal way.

Detlef

posted by: Detlef on 02.06.04 at 11:04 AM [permalink]



If Europe wants to resign from the game of World Trade, let them. They will be, in effect, raising the costs of goods on themselves. Rather than take advantage of the efficiencies of the world market, they will be isolating themselves, and hastening their economic demise.

The gulf between the productivity and innovation of the US economiy and the European economy will only grow that much faster. Latin America, the Pacific Rim, and even China will overtake and pass Europe, and the nations of Europe will decline to at least secondary status, if not third world status within 2 generations.

It is long past time for the world to cease being Eurocentric. The Europeans believe in the individual right to suicide and even euthanasia. If they want to put a gun to their economic head and pull the trigger, who are we to stop them.

Their mercantilist attitudes towards trade are hundreds of years old. We don't need them. Strategically and militarily, they are useless. Politically, they refuse to reject the failed 230 year old idealist philosophies of Rousseau and Marx. Economically they are brain dead. Demographically they are growing old and dying. If they want to hasten the process, let them.

Our future lies to the west and the south. We need to stop looking east for external gratification. China, India, Australia, Japan - these are our future strategic partners. Even Iraq, if we do the job properly, can grow into a key ally. We should focus on a Western Hemisphere free trade agreement that nevertheless respects national sovreignty. George Washington warned us of entangling alliances in Europe. Now that Europe is pacified, let's take his advice. Besides which, I've always wanted to visit Argentina and Chile.

posted by: Scott Harris on 02.06.04 at 11:04 AM [permalink]



“You do have a trade embargo against Cuban goods IIRC, don´t you? Decades old?
Why aren´t we allowed the same thing?”

You are allowed to do the same thing. Just understand that this will greatly damage your economy. So much so, that it will drive the Old Europeans into a severe and never-ending recession. Are you willing to pay that price? This discussion has little to do with the morality of one’s choices and more to do with their pragmatic results.

Also, I notice that you are apparently a German citizen. Well, guess what---so are the ancestors on both sides of my family tree. I am ashamed of being a German descendent. Your very recent court decision releasing the alleged terrorist reminds me of the contempt I have for Germany. When will the Germans cease parasitizing off the United States? Why are we always suppose to fight your battles for you while your citizens disgustingly stab us in the back every chance they get?

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



“I´m not happy with the results but it seems that we are more concerned with the substance of justice than the people who taught us about it after WW2.”

You possess a very immature understanding of democratic values. You need to read some of the writings of Robert Jackson who contended that democratic values should never lead to an inadvertent suicide pact.

“And as an aside, Germany fought against terrorists since the 1970s. And we won, using the legal way.”

That’s pure nonsense. The Germans greatly encouraged the terrorists by their gutless actions during the 1972 Olympic Games held in Munich. Many of the troubles we endure today are due to the mishandling of that tragic event. The Americans pulled your rear ends out of the fire. You spend practically no money for your own self defense and then do everything to screw us. President Ronald Reagan defeated the Soviets while Germany’s politicians kissed their rear ends.

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Let's step through this slowly so even the Europeans can understand it.

XYZ product produced in India costs $15 dollars in America because we don't have trade barriers. The same XYZ product costs $20 in Europe. That means I can buy 4 XYZ products for every 3 that the European can buy.

Meanwhile, a similar product ABC manufactured in Europe wants to compete with the XYZ product in America. But becuase of restrictive labor and environmental laws, they only way the Europeans can compete in America is through the assistance of government subsidies. So the Europeans pay a five dollar tax for every ABC product I purchase instead of an XYZ product. I still only have to pay $15, and each European citizen pays taxes to subsidize MY high-falutin' lifestyle.

Why should I be upset about this? The Europeans are being taxed so I can live a more comfortable life and have more money left over. In effect we are collecting taxes from the Europeans every time they sell a subsidized product in the USA. I guess we really are an empire. We've just figured out a way to get Europeans to VOLUNTARILY submit themselves to excessive taxation for our benefit, instead of exacting taxes by force. Yee-hah. Sounds like a winner to me.

Meanwhile, back on the ranch, since I am not restricted from working long hours, and not inhibited by excessive regulations, I'm working on a whole new GHI product that will make both XYZ and ABC totally obsolete. Eventually I will farm out production of that product to Indians, Chinese raising their populations standards of living while the brain-dead Europeans keep VOLUNTARILU raising more taxes on themselves to subsidizing my rich parties.

Where do I sign up for this deal?

posted by: Scott Harris on 02.06.04 at 11:04 AM [permalink]



Let's take it one step further. Let's suppose that the XYZ product is a shirt. Since I can buy 33% more shirts for the same amount of money that a European can, I have a more diverse wardrobe. Perhaps I only buy 10% more shirts. That leaves me with $3.50 left over to buy a bigger washing machine and a bigger house to with bigger closets to put my washing machine and shirts in.

The washing machine gets made in Mexico, or I can buy a subsidized European washing machine and with a smile on my face realizing that I am personally collecting taxes from some unsuspecting European weenie. And some other American is getting rich off of the bigger house I am buying (with more trade in lumber, concrete, steel, paint, sheetrock, carpet, tile, appliances, etc.

When I get the bigger house, I feel rewarded for all my hard work, and motivated to continue innovating and working hard. My productivity goes up because I have realized a tangible reward for my labor. I want to buy more furniture and artwork to decorate my new bigger house.

Since I am a bit of a snob, and I prefer European Art, I go buy a European painting that was painted by some artist being paid by some socialistic European government who is subsidizing the artist. So even when I buy artwork to decorate my new bigger house, I can perversely relish collecting taxes on even more Europeans.

Ain't life grand?

posted by: Scott Harris on 02.06.04 at 11:04 AM [permalink]



"And as an aside, Germany fought against terrorists since the 1970s. And we won, using the legal way."

Wow. Bravo sir. Maybe i'm jaded, but its rare these days when I see a post so utterly divorced from reality that I nearly choke to death on outrage. That statement is insulting on so many fronts its difficult to know where to begin. But lets start in 1972 when Palestinian terrorists committed one of the most dispicable atrocities in history, murdering 11 innocent Israeli athletes on German soil. The shame of not only allowing this to happen, but completely botching the rescue in such a way that 3 terrorists survived while all the hostages died should humble every German to the bone. The ancient law of hospitality puts the safety of those guests squarely in the hands of the host country. So how did Germany repay that debt of honor? By staging a hijacking and freeing the captured terrorists. There are no words in English, German, or Arabic that can express the dishonor of that infamous act. That is how German's deal with terrorists. A nation of greater courage might have made an eternal enemy that day in those that defiled their land with violence and treachery, but Germany sunk to an unparalled low, and traded peace with the terrorists for her very honor. It was left to the Israelis to hunt down every last terrorist that did murder that day and lay him by his heels. The Mossad gave no heed to the international laws you speak of that had failed them so badly, and let nothing bar their way, neither bound of friendship, nor written alliance, nor fear of war, stop them from bringing justice to the atheletes that died in Munich. And they hunted down and killed every last murderer. And the Germans watched silently. And to this day Germany pours money into the PLO coffers and Yassir Arafats palm. How much more ignominy can Germans bring on themselves in their debt to the Jewish people. And i am of German ancestry.
So dont speak to me of how Germany deals with terror. If you have the smallest capacity for shame in your body you would never speak of it again.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



Since a couple of us of German descent are on a roll---I might as well bring up the ludicrous German judicial decision giving only 8 1/2 years to a cannibal. Is this a gross exception? Hell no, the Old Europeans are infamous for giving out light sentences for murder:

“German Cannibal Convicted of Manslaughter" was a shocking headline. For starters it contained a redundancy. What is ultimately the most shocking aspect of a shocking case, however, is that Armin Meiwes was sentenced to a mere 81/2 years for the lesser crime of manslaughter when he had killed Bernd Brandes, a 48-year-old computer engineer, and eaten him sautéed with garlic, black pepper, potatoes, sprouts ,and a bottle of South African red wine.”

http://www.nationalreview.com/script/printpage.asp?ref=/jos/jos200402061600.asp

posted by: David Thomson on 02.06.04 at 11:04 AM [permalink]



Mark:

"But lets start in 1972 when Palestinian terrorists committed one of the most dispicable atrocities in history, murdering 11 innocent Israeli athletes on German soil." (emphasis mine)

Jeez Mark. Exaggerate much? Ya, murdering 11 people like that was a horrible thing, but bring it down a notch man.

posted by: Dave on 02.06.04 at 11:04 AM [permalink]



Not to put too fine a point on this but if the Germans were so successful defeating terrorism using the legal system, why did the WTC bombers base their operations in Hamburg? Because using a legal mechanisms, you can only prosecute after the crime is committed? That is why some prefer pre-emption.

posted by: Mr. Davis on 02.06.04 at 11:04 AM [permalink]



"Jeez Mark. Exaggerate much? Ya, murdering 11 people like that was a horrible thing, but bring it down a notch man."

Sorry if I got preachy, but that event really gets me. Of course there have been many much more horrible tragedies. Still, I cant think of many more horrible symbolic acts. I would put it on par with burning down a church full of nuns or killing a pacifist leader. Its just an act of such contempt for all that is good and decent about civilization and brotherhood. That was thirty years ago, and we are still bickering over whether we are fighting evil or not.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



Dan ends with the line, "Unless they think Europe is the world".

And actually I think they do...in a way...and they are right...in a way. You can't view an EU policy in the same way as you view a US policy. The US has been a single economic unit for centuries and has not fought a war against itself in almost 150 years...you all know the story is very different in Europe.

The EU is engaged in an extremely ambitious project of economic integration and needs all the help it can get to make sure that project doesn't fail. The project of European integration could be a model for the world, show a better way towards peace that could be followed by Arabs, Africans, and Asians. At the very least it should make sure we don't have to worry about fighting any more wars in Europe.

The EU imposing tariffs is more the equivalent of the US imposing tariffs in conjunctions with Canada, Mexico, the rest of Latin America. Sure there would be economic costs of this. They would lose a chance to take advantage of the economic growth in China and India. But there is a valid decision to be made to value the economic development of Poland, Hungary, the Baltics, the Czech Republic over that of more distant people.

The fact is that Western Europe needs to address the income inbalences between it and the new EU nations. They are indicating they believe that only by making the EU integration more meaningful will this happen in a reasonable time frame.

posted by: Rich on 02.06.04 at 11:04 AM [permalink]



I hope you still like America Mark when your 50 and out of a job and your unemployment benefits run out because you are no longer of use to your employer. Maybe the Euros have been around longer and been through more, maybe we shouldn't be so arrogant and superior. You just might need them someday. Grow up.

posted by: Hi on 02.06.04 at 11:04 AM [permalink]



ACIII writes: "But really, what will happen is there will be retaliatory tariffs across the world."

OK then, so much for your objection that the EU is "dictating" what other countries can do. If the response of other countries is simple retaliation, then clearly they aren't being dictated to.

You started out with a couple of scare points about how the EU could demand the Kyoto treaty and a 35 hour week, then refused to say that those were bad and claimed that you just objected to them demanding anything, then admitted that they couldn't demand anything and really all you meant was that tariffs start trade wars. Maybe next time you should just start out with the bromide rather than ornamenting it baroquely and looking the other way as the ornaments fall off.

posted by: Rich Puchalsky on 02.06.04 at 11:04 AM [permalink]



"Still, I cant think of many more horrible symbolic acts. "

I can. How about the time the Americans allowed Saudi terrorists to murder 3000 people?

I believe that, to date, not one single surviving perpetrator of that atrocity has been brought to justice. Last time I heard the mastermind was running free somewhere in Pakistan, making home videos. On the plus side the camps at Guantanamo are filled with random, untried and uncharged Islamist schmucks from Afghanistan, and $200 billion has been spent going after one J. Random Middle-eastern Dictator's Weapons Of Mass Destruction Program Related Activities.

Glad to see the shame of all this humbles you to the bone, sir.

posted by: BP on 02.06.04 at 11:04 AM [permalink]



Not to put to fine a point on it, but isn't this all somewhat hypocritical? The US has the "Most Favored Nation" status (now called "Normal Trade Relations" (NTR)) that it confers on those countries it chooses.

Currently, to have NTR status, the country must "comply with the Jackson-Vanik provisions of the Trade Act of 1974 that states that the President of the United States determines that a country neither denies or impedes the right or opportunity of its citizens to emigrate;"

In other words, the United States government, not the citizens determine trade restrictions. See here for more information on NTR.

posted by: Tom West on 02.06.04 at 11:04 AM [permalink]



Dave --

I did not intend give the impression that Europe didn't have the right to be protectionist. Their position is simply hypocritical and stupid. This is a rather obvious exercise in protectionism and will be viewed as such by everyone else. The high-minded explanation does not fly.

Comparing this to the US embargo of Cuba is ridiculous. Cuba is a sworn enemy of the USA (in Castro's words, and the words of every US President since 1959). Moreover, Castro's regime is despotic and our embargo is a response to that; that's an order of magnitude different than disagreements about environmental policy.

posted by: Ben on 02.06.04 at 11:04 AM [permalink]



"I hope you still like America Mark when your 50 and out of a job and your unemployment benefits run out because you are no longer of use to your employer."
Fortunately in America you can find a new job. Because our economy actually grows. Btw, whats the unemployment rate in France (9.7%) and Germany (11.1%)compared to the US (5.6%)? Care to revise your thesis?

"Maybe the Euros have been around longer and been through more, maybe we shouldn't be so arrogant and superior. You just might need them someday. Grow up."

Yeh, Europeans have been creating disasters militarilly and economically for centuries. We should listen. Lets listen to the guys with the 1% growth rate that have spent the last hundred years under American protection at every turn, and cant even handle tiny Serbia without America. Not to mention relying utterly on American consumers to fuel their economies. Why should we trust ourselves when we've had 200 years of unprecidented prosperity?

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



Daniel said.
"If the EU chose to implement this policy"

Thats a big if. I agree that this reports proposals are dangerously undefined, but its still just a report, it isn't official policy. If it does become policy then it would probably be be the old protectionist system again.

Personally I'd like to see EU economic agreements create something more along the lines of a European NAFTA. Like Rich Kleinman said, the US has been economically integrated for centuries, Europe hasn't.

posted by: sam on 02.06.04 at 11:04 AM [permalink]



Does anyone here have any ideas on how to address the massive income balances between the Western and Eastern European countries that are in the EU? I'm not being snarky I am genuinely interested in hearing reasonable alternatives.

posted by: sam on 02.06.04 at 11:04 AM [permalink]



Rich:

This is rather late in the thread, but I can't let this one go entirely unnoticed. What I said in my, baroque, ornamented post was this:

"The best way to explain the problem with the Democratic -- they must adopt our standards or be tariffed -- approach is this:

Imagine the EU (or France) adopted such a policy. We would be be subject to EU tariffs until we (i) ratified Kyoto and complied with it and (ii) we would all be required towork 35 hour weeks."

(No edits here. I even left the typos intact.)

Note. Tariffs were always in the post. It's not my problem that you are not reading conditional sentences.

Look. The EU is doing one of two things: Trying to impose their economic/environmental ideas around the world (like Kyoto), or impose tarriffs. As for Gephardt et al, he's just trying to impose tarriffs and just using the environment/labor thing as an excuse. There's a certain amount of sarcasm in my posts, as I believe the Democratic position is disingenuous. (The EU position may actually be sincere, which is rather frightening.)


posted by: alonzo church iii on 02.06.04 at 11:04 AM [permalink]



ACIII, I indeed read your original post. As I said, it boils down to "tariffs cause trade wars" once you strip off the ornamentation of the specific EU policies that you quote as apparent horror stories. In your last post, you write "The EU position may actually be sincere, which is rather frightening", so apparently you still think that they are horror stories, though you don't care to say why. We already proved that you can't simply be horrified that the EU wants to impose its policies on anyone else; we've already determined that it is impossible for them to use trade policy to force anyone to do anything.

So basically you get to bring up the 35 hour week as bad, bad! but never say why. I think that's because you have no idea why, or perhaps you know why it's bad for rich Republicans and good for everyone else, but don't want to admit it.

posted by: Rich Puchalsky on 02.06.04 at 11:04 AM [permalink]



Umm, its called cutting productivity which raises costs which means the company makes less and either pays its share holders less (little old ladies with 401ks?) and/or forces you to lay people off. It damn sure means your more unlikely to hire anyone new because you arent getting the value out of the new employee working less hours.
Im shocked how many people continue to cling to so many quasi-marxist notions that have proved so resoundingly to be failures. Why should Europe get to dictate to the US how many hours our people work? That is absurd. You people are suggesting instead of raising Europe up, we bring ourselves down. Equality of outcome BS.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



Yeah, what's the deal with that?

"You know...You know what's wrong... No - you know what's wrong with the americans? Yeah...They work to long. Yeah. they work too long. YOu know what? No.. you - no (snicker) no wait, wait."

"You know what? What. If... WHat if we made a law, like, a law that... no, no, I'm serious. What... What if we made them so they only worked 35 hours a week?"

"No seer-riously you guys, huh?"

posted by: Tommy G on 02.06.04 at 11:04 AM [permalink]



Mark Buehner: "Umm, its called cutting productivity" [...]

No, productivity is the amount produced per hour, not per worker. Care to try again? You could babble nonsensically like Tommy G.

I'll remind you of my second hint, just in case you do decide to attempt rational thought: back when we had 60 hour weeks, workers did not earn 50% more than they do now (taking the inflation difference between then and now into account).

posted by: Rich Puchalsky on 02.06.04 at 11:04 AM [permalink]



This is entirely off the subject of the thread, but a response to the original article. There is a point that I missed in my first reading, and I think is still being missed in this discussion. The EU is not proposing a change to EU policy, they are thinking about proposing a change to WTO policy.

So they are actually looking to allow the US (and any other member of the WTO) the ability to impose tariffs in response to objectionable policies. I have no idea what the WTO rules say now on this. I think the new policy makes sense in a way, but it does leave open the door for countries to actually make the WTO irrelevant.

I guess that with the way the WTO is structured today we have no ability to impose tariffs on any member if they took action that ran against US interests. For example if China started supplying weapons to North Korea this policy would allow us to punish China with trade restrictions.

I would be very interested in any light people have to shed on what the actual WTO policy is today and what the implications are of changing WTO policy to allow member nations to impose policy driven tariffs.

posted by: Rich on 02.06.04 at 11:04 AM [permalink]



"I'll remind you of my second hint, just in case you do decide to attempt rational thought: back when we had 60 hour weeks, workers did not earn 50% more than they do now."

Ohhh, I see. So I suppose we could establish a 1 hour work week and get excellent results? You know bein a jag-off and ignoring simple logic wont win you many arguments. Maybe companies will perform better with 35 hour weeks and maybe not, but theres one thing I know for damn sure, government dictation isnt the way to find out. Especially foriegn government. Its people like yourself that think they know all the answers that are dangerous. There is such a thing as the law of unitended consiquences. Heres one for you, cut the work week and I promise you companies will change to outsourcing and automation faster than ever. I wonder how many Frenchman are happy about having almost double the US unemployment rate to save 5 hours of work a week. C'est la vie.

posted by: Mark Buehner on 02.06.04 at 11:04 AM [permalink]



So many issues here:

1) The number of hours an employee works should be determined by the employee and the employer, not the government. This is a basic right in America (although often violated, unconstitutionally in my opinion) although not universally applied.

2) "Does anyone here have any ideas on how to address the massive income balances between the Western and Eastern European countries that are in the EU? I'm not being snarky I am genuinely interested in hearing reasonable alternatives."

I'll be a little bit "snarky": The rich old Europe countries like France, Germany, Britain, etc., should put their money where their mouths are and prove that old fashioned Socialism really works: They should levy a large tax on themselves (in the amount of the differences in income) and send it to Poland, Hungary, Turkey, etc. until the imbalance is erased. That's the policy they attempt in their domestic economies to remidy such problems, it should work equally well internationally. While they are at it, there is an even larger inequality they can work on in Africa while they're at it.

My less snarky reply would be: the free market should determine the income (and relative differences in such) of each individual country. If France, Germany, etc. cannot compete with these countries with lower taxes, regulations and labor contrcitions, they will need to change THEIR policies to compete. Or they will find themselves in even more stagnant economies than they are now. It appears that they have instead decided to try and force their disasterous policies on the rest of Europe, and if they could the rest of the world).

The real problem here is that this smells of Smoot-Hawley circa 1930. Now if Europe wants to commit slow economic suicide taht's their business, but the EU is large enough to affect the economies of the rest of us. Smoot-Hawley set off a wave of global protectionist retaliation that spread America's problems to the rest of the globe. Even if the retaliation had been limited, the resulting contraction of economic activity that protectionism brings about would still have affected the world economy. Such an EU policy, if used as I think it would (against countries like America, not the Sudan)have similar results.

posted by: DSpears on 02.06.04 at 11:04 AM [permalink]



I can't be the only person who thinks that given the EU's structure (heavy centralization, heavy regulation, enormous costs, kleptocracy, etc), the EU itself is essentially economic suicide?

posted by: infrared on 02.06.04 at 11:04 AM [permalink]






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