The economies of peace.

blackfox

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From the NYT. It is a rather short article, but I think an interesting subject.
A Good Deal Goes Begging

Published: November 18, 2004

Last week, President Bush professed a desire to see a true peace in the Middle East, one where Israel can live alongside its Arab neighbors in serenity and harmony and all other good things. So why in the world is his administration holding up a trade deal between Israel and Egypt that could increase economic cooperation between the two countries?

Back in 1996, Congress passed a law giving Jordan and Egypt duty-free access to some parts of the American market if those products included some Israeli content. The point of the law was to encourage commercial ties between Israel and the Arab world, and to weaken the Arab boycott of Israel. Jordan embraced the law and set up special industrial zones for textile exports that included Israeli content, like zippers and fabric lining. Egypt, for its part, dallied for years; Egyptian officials cited the Palestinian intifada as one reason why they didn't want to be seen as embracing Israel.

But this year, Egypt finally came to its senses. The coming end in December of the United States quota system that has protected textile manufacturers from Chinese competition may have had something to do with the Egyptian turnaround. But whatever the cause, Cairo has agreed to establish special trade zones for duty-free exports to the United States. Such exports - mostly clothing and textiles - would include 11.7 percent Israeli content. Israel and Egypt quietly signed the pact in September. Great news, right?

Wrong. United States trade officials haven't approved the deal, citing concerns that it could hurt American textile and apparel companies. Apparently peace in our time isn't quite so important after all, especially not when measured against protecting important political constituencies.
What say you, oh wizened Political forum membership?

Would it not be cheaper to assist Domestic textile manufacturer's (not that they necessarily deserve it), in order to lay an economic common-interest between the Arabs and the Israelis and make the peace process more likely, than to spend the money militarily or in aid/investment to force the issue?

Sorry for the run-on sentance...
 

skunk

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blackfox said:
Would it not be cheaper to assist Domestic textile manufacturer's (not that they necessarily deserve it), in order to lay an economic common-interest between the Arabs and the Israelis and make the peace process more likely, than to spend the money militarily or in aid/investment to force the issue?

Sorry for the run-on sentance...
SentEnces aside, why not let unprofitable growers go to the wall? There's far too much protectionism and far too many subsidies already, both in the US and Europe. If we're all such technologically-advanced, sophisticated and gifted nations, why can't we compete on a level playing field?
 

Xtremehkr

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skunk said:
SentEnces aside, why not let unprofitable growers go to the wall? There's far too much protectionism and far too many subsidies already, both in the US and Europe. If we're all such technologically-advanced, sophisticated and gifted nations, why can't we compete on a level playing field?
It's not a level playing field from the start. China has no labor standards, no minimum wage, no standards for its people when it comes to things like that. Combine that with the massive abundance of people to provide cheap labor and they have an enormous advantage. For all of its communist overtures, the Chinese have shown that the workers are easily disposed of when necessary. You know, the ends justify the means, that moral relativism that is showing up all over the place lately.
 

Desertrat

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Protectionism has always had its adherents. It was a central point in Gephardt's view of government, for instance.

Generally, protectionism causes the consumer a net loss. The only one I recall offhand for specific $ numbers is an old one: To protect a $28,000/yr shoe-maker job in New England against Italian imports cost the consumers some $35,000/yr in higher costs for shoes.

I dunno. I guess this particular textile deal has been lost in the bowels of the Dept of Commerce since 1996, and TLOK who's for it or agin it.

There are a lot of interesting historical tidbits about locational competition in manufacturing. New England mill owners and workers screamed like banshees when textiles moved down to the Carolinas. Later, when Asia got into the act, Carolina workers got hurt but the port of Galveston made a lot of money because cotton was shipped there for export. Then, the idea of containers began. This meant that empty containers had to be returned to Asia. That hurt the port of Galveston and helped the west coast ports, as the empty containers were shipped back full of cotton bales from the Texas Panhandle. That also affected the railroads, as to needing new track and reducing the usage of other track--and changing the deal of which RR got how much freight.

'Rat
 

skunk

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Xtremehkr said:
It's not a level playing field from the start. China has no labor standards, no minimum wage, no standards for its people when it comes to things like that. Combine that with the massive abundance of people to provide cheap labor and they have an enormous advantage. For all of its communist overtures, the Chinese have shown that the workers are easily disposed of when necessary. You know, the ends justify the means, that moral relativism that is showing up all over the place lately.
The rise of China is inevitable. Yes, they have a huge advantage, just like you did once, just like we did. Tough cookies: welcome to the Decline and Fall. Change will come in China. I think it's nothing but good news.
 

blackfox

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Xtremehkr said:
It's not a level playing field from the start. China has no labor standards, no minimum wage, no standards for its people when it comes to things like that. Combine that with the massive abundance of people to provide cheap labor and they have an enormous advantage. For all of its communist overtures, the Chinese have shown that the workers are easily disposed of when necessary. You know, the ends justify the means, that moral relativism that is showing up all over the place lately.
While I agree with Skunk's response to this same quote, I would say that China will have to walk a fine line in the coming years in it's push towards becoming the pre-eminent World Economic and Political Power. The demographic shifts towards the coastal cities and the resultant emptying of the countryside alongside resource issues (providing power, water, food), will force the Chinese Govt. do address the needs of it's citizens or risk destabilizing the country politically (citizen unrest). While they could attempt to crush dissent, it runs the risk of damaging Chinese Economic growth. So I am hopeful that there will be a gradual implementation of Labor standards and even elements of a Democratic process in the China to come. This would be good for the Chinese worker, and good for a more level playing field with regards to trade. I admit, however, that it is anyone's guess what will happen.
 

skunk

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http://news.independent.co.uk/business/news/story.jsp?story=584777
Saved: Chinese bail out Rover for £1bn

By Michael Harrison Business Editor

20 November 2004

MG Rover, the last remaining British-owned volume car-maker, is set to be rescued with the help of more than £1bn of Chinese cash. But the agreement with the Shanghai Automotive Industry Corporation (SAIC), which is due to be signed early next year, will mean that control of the Longbridge-based motor manufacturer will pass out of British hands.

A new joint-venture company will design, develop and produce cars. It will be 70 per cent owned by the Chinese and 30 per cent by MG Rover.

The deal comes as MG Rover's financial plight worsens. Its losses this year are expected to be more than £100m and its share of UK car sales has slumped to an all-time low of under 3 per cent. Huge damage has been done to the brand by accusations of boardroom greed and asset-stripping levelled at the four Midlands businessmen who bought it from BMW four years ago for a symbolic £10. Last week, a senior BMW executive called them the "unacceptable face of capitalism".

There will be separate British and Chinese companies to manufacture the new models in Birmingham and Shanghai but the key assets and intellectual property rights of the two car-makers will be contained in the Chinese-controlled joint venture.

The deal has yet to be approved by the Chinese government, although SAIC has already made a down payment of about £40m to MG Rover. Provided the deal comes to fruition, it will safeguard the 6,100-strong workforce at Longbridge and thousands more jobs in supply companies. The agreement envisages investment of between £1bn and £1.5bn in a series of new models and annual production of around one million cars, with about 200,000 of those to be built in the UK. Most of the investment will come from the Chinese company.​
Seems very apropos.
 

blackfox

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Desertrat said:
:) By the way, blackfox, look up "wizened". I got some wrinkles, yeah, but I ain't "wizened".

'Rat
uhh... sorry. The power of assumptive language application, I guess.
 

skunk

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Desertrat said:
:) By the way, blackfox, look up "wizened". I got some wrinkles, yeah, but I ain't "wizened".

'Rat
How d'you know it was you he was referring to? We're not ALL spring chickens around here, young man!

<Checks in diary for next Botox appointment>
 

Xtremehkr

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blackfox said:
While I agree with Skunk's response to this same quote, I would say that China will have to walk a fine line in the coming years in it's push towards becoming the pre-eminent World Economic and Political Power. The demographic shifts towards the coastal cities and the resultant emptying of the countryside alongside resource issues (providing power, water, food), will force the Chinese Govt. do address the needs of it's citizens or risk destabilizing the country politically (citizen unrest). While they could attempt to crush dissent, it runs the risk of damaging Chinese Economic growth. So I am hopeful that there will be a gradual implementation of Labor standards and even elements of a Democratic process in the China to come. This would be good for the Chinese worker, and good for a more level playing field with regards to trade. I admit, however, that it is anyone's guess what will happen.
The sad thing is, people who have been repressed for a long time, tend to stay repressed. China may do it themselves because they have a different cultural values having come from buddhism, and because it would help their economy grow.

Despite what is thought here currently, have a strong production base and money circulating is a sure winner.

But lately companies like Wal Mart have been chasing third world labor, forcing other companies to do the same. So China would have to keep paying their workers next to nothing while retaining the advantage of having everything contained in one country.

Instead of doing something clever like implementing and enforcing a worldwide minimum wage, which would have protected jobs here at home. Dennis Kucinich was pushing for that, not a bad idea.

I just wonder how much longer we can go on when less and less is produced here, especially with the quality of what is produced.

Ford and Volkswagon can make a lot of noise about getting into the Chinese market, but let's face it, Toyota and Honda and going to kill them in the end. Just like they are spanking other car companies all over the world.

But who knows, maybe disaster will force change. It has done before.
 

skunk

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Xtremehkr said:
Instead of doing something clever like implementing and enforcing a worldwide minimum wage, which would have protected jobs here at home. Dennis Kucinich was pushing for that, not a bad idea.
A worldwide minimum wage???? WTF???? How on earth is that supposed to work? What a nightmare scenario!
 

Xtremehkr

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skunk said:
A worldwide minimum wage???? WTF???? How on earth is that supposed to work? What a nightmare scenario!
In a global economy, it would not be much of a challenge.

Notice how Apple prices vary from country to country based upon what people can afford? The research is easy, implementing it would be the hard part. The benefit would be many more markets to sell to and companies operating locally except when there is a shortage of labor. Not nearly as hard as it seems.
 

skunk

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Xtremehkr said:
In a global economy, it would not be much of a challenge.

Notice how Apple prices vary from country to country based upon what people can afford?
According to what people can afford? What is that? Communism? I don't think so!
 

takao

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Xtremehkr said:
Ford and Volkswagon can make a lot of noise about getting into the Chinese market, but let's face it, Toyota and Honda and going to kill them in the end. Just like they are spanking other car companies all over the world.
i think i missed it when honda and toyota spanked ford and volkswagen here
 

Xtremehkr

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takao said:
i think i missed it when honda and toyota spanked ford and volkswagen here
Toyota just overtook Ford as the number 2 car maker and should overtake GM in 11 years. Where is Volkswagon?
 

Xtremehkr

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pseudobrit said:
Volkswagen is Europe's biggest carmaker. I know nothing of this Volkswagon of which you speak.
I meant locally, I guess the Europeans prefer cars from Europe. From what I have read and seen from Volkswagen, I hope that they are a lot better quality in Europe than they are here locally.

In Asia though, I don't think you are going to have those preferences for a European based manufacturer come though as much. I think that car producers from outside of Asia would have to do much better to compete with car companies from within Asia.

American car companies have a lot of trouble selling cars in Japan, though there are certain makes and models that do very well. For the most part though the quality cannot compete and therefore the sales are disappointing. Japanese cars were written off as crap when they started selling here but have since become a powerhouse when it comes to quality, durability and reliability. Because of that Japanese cars sell very well here now, to the point where Toyota is number two. The Camry and Accord have traded the top selling car spot for more than a decade. I guess we will see, but it does not seem likely that Ford are going to do any better in Asia if they are selling the same old crap. Same goes for Volkswagen.
 

zimv20

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Xtremehkr said:
In Asia though, I don't think you are going to have those preferences for a European based manufacturer come though as much. [...] American car companies have a lot of trouble selling cars in Japan
in japan, i saw a lot of New Beetles, plus a few other VW models, like the Polo. i'm trying to remember if i saw a single american model; at this point, i can't say that i did.
 

Xtremehkr

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pseudobrit said:
According to Yahoo! Finance, 5th behind Toyota, DC, Ford and GM.
Which is nothing to be laughed at, but they have been usurped lately but relatively young company when it comes to car production.

I had a VW Bus for a long time, but unfortunately they are not made like those older ones were anymore.

A lot of it will also come down to what is valued by the Chinese consumer, but the ethnocentric advantage won't be there for car manufacturers that come from outside of Asia.

And if Bush continues to play the bad boy leader of the 'we do what we want and you can't stop us USA,' it's not going to help Ford either.
 

pseudobrit

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Xtremehkr said:
A lot of it will also come down to what is valued by the Chinese consumer, but the ethnocentric advantage won't be there for car manufacturers that come from outside of Asia..
As I understand it, VW is a very highly regarded car in China. They're considered a sign you've "made it" (much in the way a Mercedes-Benz would have in the USA when they were built to a standard, not a price. An era that ended in the early 90s) and are an object of lust.

VW is building a plant in China to meet the growing demand in Asia. No cars will be made at the new facility for export from Asia.