ramona

many countries around the world have formed Free trade Areas ( FTAs) os common markets.

i woder why do the member countries reduce tariff rates and trade restrictions within thier membership zone. why do u think they do this??what is the underlying principle and what the motivating forces that encourage countries to enter INTO phpbb_these agreements????

what arguments do protectionists present to oppose free trade and support tariffs?

when are countries most likely to implement an increase in tariffs, ttrade restrictions, or delierate currency depreciation????

what effects do tariffs have on Aggregate Supply and Aggregate Demand????



lots of questions..but i hope i'll find answers to them from u...

waiting 4 replies....


Ramona

Lawrie Boxall

Ramona asked:

why do the member countries reduce tariff rates and trade restrictions within thier membership zone. why do u think they do this??what is the underlying principle and what the motivating forces that encourage countries to enter INTO phpbb_these agreements????

Perhaps free trade areas should be renamed protectionist areas - actually they are both, inside low tariff but present a high tariff to the outside world. Motivation - insecurity.

I think that answers the next question as well.

when are countries most likely to implement an increase in tariffs, ttrade restrictions, or delierate currency depreciation????

The WTO mitigates against this kind of thing - tariff increases that is. Deliberate currency depreciation (re-valuation downwards) - countries don't do that unless their economies are in dire straights. Re-valuation upwards - countries don't do that until they are forced to by complaints from their trading partners. Better to do as the UK does and have a currency which is allowed to find its own value on the foreign exchange markets. To allow that economic stability is desireable.

what effects do tariffs have on Aggregate Supply and Aggregate Demand????

I would expect something similar to the effect taxation has in an economy

SCole

free trade areas are dangerous unless they're properly managed (just look at NAFTA)...

Especially for things like food stuffs every country within the free trade agreement needs to agree acceptable saftely standards.
For instance the EU has water guidlines so regardless of where your bottled water is from in the union it must be safe to drink.

However a properly managed free trade is an asset to all country involved. We as consumers benefit by increased competition and new markers open up to our companies.

Just look at the way our export have changed in the last 40 years - walk down Alicante high street and you'll find Barclays, Lloyds, BP... 3 of every 4 pounds that flow INTO phpbb_this country come from other European countries and many millions of Brits are employed directly because of our free trade agreement.

Not just that but by standing with our neighbours we're stronger on an international stage - pressure by the EU resulted in the US dropping tariffs on British steal, Air bus who have a large factory in Wales sold more planes then Boeing last year.....

Hudson

There's a certain Boeing product I'd like to draw your attention to. http://www.ukipforum.co.uk/viewtopic.php?t=3814

Lawrie Boxall

I think Scole is observing the position as it appears and not really seeing what lies behind – he or she is seeing the veneer and not the chipboard. Take the issue of foodstuffs - is he or she really suggesting that without EU wide standards UK supermarkets would import poisonous food for their UK customers. Doubtful I would have thought.

If a Portuguese bottled water company wants to export its product to the UK then the onus is on the Portuguese company to comply with the required UK standards. It does not mean that UK standards should be imposed on the whole of Portuguese industry, from the smallest corner shop to the largest exporter. This is where the EU goes wrong.

That does not mean that we should lower our standards here in the UK and that they should be at least as good or better than recongnised international standards only that we should allow other countries we have trade agreements with to decide their own.

Given that the EU is first and foremost a political project, free trade comes as an adjunct to the creation of a single European nation. Actually it does not have to be like this at all - they have just made it so in order to capture nations and remove their independence.

Free trade, lower tariffs and open markets are a benefit to all developed economies if not yet quite all countries on the planet. These benefits and the harmonisation of international standards is an ongoing process that would take place equally well or better if the EU did not exist.

Losing the EU we would also lose the inherent protectionism that goes with it - the idea that if we trade amongst ourselves we can ignore the rest of the world which many of our "partners" have. This is evident from the very thrust of Scole's argument - that somehow if we left the EU we would lose the right to trade with them. If that is not protectionist thinking what is?

I also doubt Scole’s statistics that 3 out of every 4 pounds that flow INTO phpbb_the UK come from other European countries. This looks like spin to me. The UK is the largest investor in the USA, the worlds largest and most dynamic economy. That is where most of the national wealth bound up in overseas investments by business and private individuals is deposited..

As for US tariffs against British steal - or even British Steel - that company ceased to exist long ago. The US tariffs were I believe against all imported steel not just that from Corus, primarily from eastern European countries, and would have been unacceptable under WTO rules. If Britain had not been an EU member we could probably have negotiated an exemption for Corus and avoided the worst effects of the tariffs. Failing that we could have made our own very powerful representations. Failing that the WTO would certainly have done the job for us.

So lets forget about free trade areas and have a free trade world with protection only for those devloping countries which would otherwise be ripped off by rapacious capitalism.

arden forester

So Lawrie Boxall, you are not a "common market" UKIP supporter!
There appears to be a case of two camps - those in favour of your view and those in favour of reverting to a common market.

I am in favour of something like the latter.

So the Portuguese sell bottled water to UK standards. Fine. But what if the Portuguese standards were slightly lower in exactment. Could UK bottlers sell them an inferior quality water?

I think we could somehow keep some of the present day standards of trading agreement, without the political overtones! Otherwise it's a case of throwing the baby out with the bathwater :?

Lawrie Boxall

Many if not all of these standards are commonplace internationally recognised anyway - so lets have them - but it should be up to the national (in this example Portuguese) governments to decide what is acceptable without diktat from other countries or power blocs. In reality countries will adopt the standards most appropriate for them at that particular time. I am certainly not in favour or using free trade areas to erect trade barriers but I am like you in favour of trade agreements without political overtones. One way to do that is to disconnect the political element of standards creation which free trade areas encourage as a means of protectionism. Standards creation should be done by apolitical expert international bodies - such as system was developing before the EU began to interfere in the process.