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Bill: Selaya free trade zone: discussion

Details

Submitted by[?]: Cooperative Commonwealth Federation

Status[?]: passed

Votes: This bill is a resolution. It requires more yes votes than no votes. This bill will not pass any sooner than the deadline.

Voting deadline: November 2096

Description[?]:

A party in Gaduridos has prososed a free trade agreement for our continent, at http://82.238.75.178:8085/particracy/main/viewtreaty.php?treatyid=5

At a first glance, this seems worth investigating. Should we consider signing, once ratifiction becomes possible? Gaduridos is a solid member of the international community.

while broadly supportive, the Greens would have two concerns:

1. We would hesitate to consider any agreement binding us to trade concessions to Kalistan, a militaristic state that is not noted for its huamn rights standards.

2. We would propose adding an environmental side bar. We would not wish a free trade agreement to become a race to the bottom, in which some countries could cut cosgts by slashing their environmental standards. Therefore we would suggest an addition, maybe:

"Recognizing the right of each Party to establish its own levels of domestic environmental protection and environmental development policies and priorities, and to adopt or modify accordingly its environmental laws and regulations, each Party shall ensure that its laws and regulations provide for moderate or high levels of environmental protection and shall strive to continue to improve those laws and regulations."

(OOC: lifted from NAFTA)

Proposals

Debate

These messages have been posted to debate on this bill:

Date21:16:09, August 06, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
MessageFree trade is free trade.

Date21:17:48, August 06, 2005 CET
FromAdam Smith Party
ToDebating the Selaya free trade zone: discussion
MessageCan we ask what effect economic embargos will have on a militaristic, expansionist government? Think about it a little.

If we wish to disarm other nations, the way to do that is to enter into co-operative partnerships with them. It is either that or invade them. Now we do not know about the others here, but the ASP definitely prefers the partnership route over the aggression route.

This is a trade agreement GA. You have your agenda which has nothing to do with this. If you wish an environmental protection agreement draft one yourselves. We suppose that you would only agree to play a fotball match against a country that has certain environmental protection laws in place. Put things in perspective.

((OOC anything from NAFTA is a waste of ink and paper in environmental terms, given the record of the USA on this issue))

Your proposed clause says: "you can have any environmental policy you like so long as it is green." (to paraphrase)

We will not place the welfare of our people and the future of our nation at risk by trying to demand concessions from other nations in our region in order for them to trade with us, or us to trade with them. Stop trying to order everyone around.

Regarding the terms of the agreement.

1. We would like some clarification of the thinking behind the three tier maximum tariff system. We do not understand why the system should be so complex. Why not have just a flat maximim tariff of 5% for all goods covered by the agreement.

2. "Each signatory nation shall pay an equal share to cover the costs of a Seleya Free Trade Commission (SFTC) to oversee the implementation and, later, the management of this treaty." There is no need for any such body. This is simply additional bureaucracy for no benefit. Each government could designate one or two members to co-operate on the setting up and overseeing of this agreement, and no extra costs will thus be incurred.

Date22:03:25, August 06, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messageis it just me, or is "Stop trying to order everyone around" a really ironic statement?

we agree with the ASP that the agreement has promise, that free trade is good, and that some changes are needed. We have suggested one change, which it is our right to do. Rather than pouring scorn on the ASP's suggested changes, we will simply agree with them.

Date00:58:19, August 07, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
MessageWe have a few other issues with the proposed treaty(addressed in the next post). Otherwise we are satisfied.

Here is the full text, so that this bill has a copy of it included in the debate:

[begin treaty]PREAMBLE

The governments of the signatory nations hereby resolve to promote, within reasonable limits, the free movement of goods and people across their borders. This treaty is thus intended to
-Strengthen the bonds that tie our nations together
-Enhance the global competitiveness of our firms
-Support the overall economic growth of the Seleyan continent
-Regulate trade between nations in a fair and transparent way.

PART ONE - COVERED SECTORS

All goods or services produced in one signatory nation, and sold or transported through another, are subject to the terms of this agreement, with the following exceptions.

1) Goods used for academic, not-for-profit research.
2) Goods used by the armed forces of either nation on a duly approved joint operation between two (or more) signatory nations.
3) Goods used by registered charitable organizations.
4) Commercial samples.

PART TWO - PERMISSIBLE TARIFFS

For all goods, tariffs charged on goods from a signatory nation must be as low or lower than the applicable tariffs for any other nation.

The tariffs placed on goods from any one signatory nation must be the same for all signatory nations.

A maximum tariff of 3% can be applied to the following categories of goods.
-Textiles and Apparel
-Processed foods
-Automobile parts
-Industrial machines
-Computers, computer software, and computer parts

A maximum tariff of 10% can be applied to the following categories of goods.
-Livestock and Meat
-Fruits and Vegetables
-Pulp and paper products
-Books and magazines
-Automobiles
-Aircraft
-Raw metals and minerals

A maximum tariff of 5% can be applied to goods not specifically mentionned in this schedule.

There are no limits to the tariffs that can be placed on alcoholic beverage.

PART THREE - NON-TARIFF BARRIERS

No signatory nation may sell goods in another singatory nation at a price below the cost of production. This practice is to be known as "dumping".

No signatory nation may create any restriction on the quantity of any specific type of good, nor of goods overall, entering their country from any other signatory nation. This does not, however, prohibit signatory nations from prohibiting the entry of certain goods from certain other signatory nations at any given time, for any of the following reasons:

1) Reputable scientists have deemed the product to be defective, and therefore harmful to human health or likely to be harmful to human health. Note that this only applies to goods which are harmful due to their not being up to the normal standard of the good in question (for example, beef which may be tainted with disease) and not goods which, in their normal use, can be harmful to human health and for which consumers are or ought to be well aware of their dangers (such as cigarettes).

2) Reputable scientists have deemed the good to be harmful or likely to be harmful to animal health, in the case of animal feed or other agricultural goods.

3) The good is not legal to own and/or consume in the signatory nation. (This may apply, for example, to certain classes of firearm, or to goods of a pornographic nature.)

PART FOUR - DISPUTE RESOLUTION

Each signatory nation shall pay an equal share to cover the costs of a Seleya Free Trade Commission (SFTC) to oversee the implementation and, later, the management of this treaty.

Should any signatory nation dispute the adherence of another nation to any of the specific terms of this treaty, and should the two nations be unable to sort out the dispute amicably, an impartial panel of three judges will be appointed to hear the case, and to make a binding ruling on it. These judges must be experts in international trade law and they must all be from nations not involved in the dispute. Candidates for these judge positions are chosen by the SFTC, but must be agreed to by all of the parties to the dispute.[/end treaty]

Date01:29:11, August 07, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
Message"All goods or services produced in one signatory nation, and sold or transported through another, are subject to the terms of this agreement, with the following exceptions.

1) Goods used for academic, not-for-profit research.
2) Goods used by the armed forces of either nation on a duly approved joint operation between two (or more) signatory nations.
3) Goods used by registered charitable organizations.
4) Commercial samples."
By excluding the above, does the treaty make it harder for them to be transferred between nations?

"For all goods, tariffs charged on goods from a signatory nation must be as low or lower than the applicable tariffs for any other nation.

The tariffs placed on goods from any one signatory nation must be the same for all signatory nations."
Does this force us to have tariffs? What if we choose to have no tariffs?


"A maximum tariff of 3% can be applied to the following categories of goods.
-Textiles and Apparel
-Processed foods
-Automobile parts
-Industrial machines
-Computers, computer software, and computer parts

A maximum tariff of 10% can be applied to the following categories of goods.
-Livestock and Meat
-Fruits and Vegetables
-Pulp and paper products
-Books and magazines
-Automobiles
-Aircraft
-Raw metals and minerals

A maximum tariff of 5% can be applied to goods not specifically mentionned in this schedule.

There are no limits to the tariffs that can be placed on alcoholic beverage."
Why the discrimination depending on the good? Wouldnt a flat maximum for all make more sense?


"No signatory nation may sell goods in another singatory nation at a price below the cost of production. This practice is to be known as "dumping"."
Subsidies... If a Kalistani company attempts to sell a product that costs 10 LOD to produce, but they are able to sell it for 9 LOD due to a 2 LOD government subsidy, then the people of Lodamun are benefitting, while the people paying for the subisdy are being harmed. The Kalistani company is gaining market share, but they will lose it if the subsidy goes away.


"Each signatory nation shall pay an equal share to cover the costs of a Seleya Free Trade Commission (SFTC) to oversee the implementation and, later, the management of this treaty."
Not needed...Let each nation enforce this on themselves, or else bring suit on other nations violating their trading rights.

Date02:00:03, August 07, 2005 CET
FromAdam Smith Party
ToDebating the Selaya free trade zone: discussion
MessageThe GA would have every right to pour scorn on our suggestions, as we have the right to pour it on theirs. That they have chosen not to implies that there is some relevance in the suggestions we made. We still do not see the relevance of the GA's suggestions to a free trade agreement.

Date03:23:49, August 07, 2005 CET
FromDemocratic Centre Party of Gaduridos
ToDebating the Selaya free trade zone: discussion
MessageAs the drafter of the treaty, I'd like to speak to some of the points that have been raised.

First, as it pertains to the three-tiered tariff system, the idea was to allow national governments to give a little bit of added protection in certain sectors that may be more critical. I agree that it may be too complex. I have no problem with a flat 5% tariff, so long as there is room for a couple of exceptions (particularly as it pertains to meat and fruit, to protect domestic farmers, and paper products/books, to protect local culture). I'd be willing to have a flat 5% maximum tariff on all other goods if the categories I just mentionned could be higher, say 8 to 10%.

On the issue of environmental policies, we would prefer to see that dealt with in a side deal, but are not opposed to considering a continent treaty on environmental regulations. Let's keep that out of this treaty though.

I understand your opposition to the extra layer of bureaucracy embodied by the SFTC. I would be willing to follow the enforcement mechanisms you suggest, ASP and TIC, if there is no substantial opposition to it in other nations.

TIC - nothing in this treaty forces you to have tariffs. It just states that whatever tariffs you have must be the same for all nations in the treaty. If you chose to have no tariffs, this is fine so long as you have no tariffs on any nation in the treaty.

Finally, as it relates to the TIC's comments on the anti-dumping language, I would like to explain why it is there. In the short term, your analysis is right. However, the reason behind the subsidy is to price so low that domestic producers can't compete and go bankrupt. Once that happens, the Kalistani company (in your example) will raise its prices and will have a monopoly on the local market. That is both unfair and leads to a less market oriented society.

I will be looking at comments in other nations, and will get back to you in the next few months with proposed revisions to the treaty. Thank you very much for your serious attention to this treaty, I look forward to working with you and see no reason why your concerns can not be accomodated.

Sincerely,
William Chen
Foreign Affairs Minister, Federal Union of Gaduridos

Date19:22:58, August 07, 2005 CET
FromAdam Smith Party
ToDebating the Selaya free trade zone: discussion
MessageThe protection of local goods can be done, if required, by subsidies or tax breaks, rather than by complicating the tariff system. This would make the treaty fairer as the local products will vary from location to location. Thus specifying which gods are to be provided with protectiuon for cultural reasons by whicg nation in the treaty will make it unnecessarily complex and lead to difficulties in ratifying the document.

While we understand your argument against dumping, we do not feel that it holds. As soon as any subsidised producer loses the subsidy, there is an opportunity in the market for competition. Only if the product concerned is one that has a very high initial set yup cost, would your argument make sense, and in that case the national government could assist in amortization of that cost. Monopolies, if not supported by law, either result in savings for the consumer due to econoies of scale, or are very quickly broken by new entrants into the market. A monopoly can only survive and extort from its position if it is supported by 5the state in retaining its monopoly.

Date19:23:13, August 07, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messagecan you address another concern?

say, hypothetically, we do not want free trade with Kalistan (and I'm not saying we don't, it's just a possible example). We ratify this. Then Kalistan joins. Are we required to trade with them?

Date20:47:11, August 07, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
MessageWe agree with the statement of the Adam Smith Party.

GA: We believe that we would not be "required" to trade with them. We just wouldnt be permitted to restrict or bar trade with them by willing individuals.
AKA
If a Lodamun citizens chooses to buy something from a Kalistani company, we would not be allowed to block the transaction, under most circumstances. Exceptions, such as a Lodamun Company selling Pot Andalay in a country that doesnt permit cannabis, would exist.

Date21:00:50, August 07, 2005 CET
FromAdam Smith Party
ToDebating the Selaya free trade zone: discussion
MessageWe would have the right to impose a complete embargo. This treaty does not stop that. It simply says that if we trade with anyone, then this trade has to be fair. ie. we can not put different tariffs on goods from country A than those we do on goods from country B. There is nothing whatsoever that says we could not simply make the purchase of goods produced in some nation ruled by an expansionist aggressive militaristic madman illegal. What we could not do is place a higher tariff on these goods.

Date21:02:08, August 07, 2005 CET
FromAdam Smith Party
ToDebating the Selaya free trade zone: discussion
MessageClause 3 of part three allows embargos to exist.

Date01:39:36, August 09, 2005 CET
FromDemocratic Centre Party of Gaduridos
ToDebating the Selaya free trade zone: discussion
MessageGreetings! I'd like to update you on this treaty. I have made several changes to the draft to take into account your concerns. The three-tiered tariff system has been replaced by a flat tariff of 5%, and the right of governments to subsidize domestic industry has been acknowledged. I have added language to specifically allow embargos of nations for diplomatic reasons. I have also added a sentence that explicitly states that nations signing the treaty do not need to have tariffs if they don't want to, only that they must treat all other treaty signatories the same way.

I have retained the anti-dumping provision that you were concerned about. I feel this is an essential part of the deal, and would prefer it remain part of the treaty.

I invite you to read the revised treaty, which can still be found at the same address, and look forward to your comments. As soon as it is technically feasible to ratify such treaties, I will be pushing hard to officially do so in Gaduridos, and I hope you will here as well.

Sincerely,
William Chen
Foreign Affairs Minister, Federal Union of Gaduridos

Date01:48:07, August 09, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
MessageThe Greens are quite happy with the revised text. We will be recommending that all signatories sign an environmental sidebar agreement as well as this one. We hope the Gaduridan (?) Foreign Minister will be able to lend his support to an environmental sidebar when the time comes.

Date05:17:16, August 09, 2005 CET
FromDemocratic Centre Party of Gaduridos
ToDebating the Selaya free trade zone: discussion
MessageGA - It would depend on the specifics, of course, but we definitely support the idea of such a sidebar.

Date17:24:08, August 09, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messagewe are not likely to ever be in a position that will allow us to propose treaties, but will put something together and send to the DCP for your consideration.

Date17:43:04, August 13, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messageas a point of information, a draft environmental sidebar has been worked out with the DCP and will be presented once treaty ratification is implemented.

Date00:42:13, August 16, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
MessageAgainst due to the environmental addition.

Date00:55:56, August 16, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messagethere is no environmental addition.

there will be a separate sidebar treaty on the environment offered. It will be presented later, once treaty ratification is implemented.

Date01:03:41, August 16, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
MessageOk. We support signing a free trade agreement, but oppose sanctions against Kalistan and oppose the environmental interventionism.

Date04:42:34, August 16, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messagethe idea of sanctions against Kalistan has been dropped, as they no longer have WMDs (although they may wish to impose sanctions against us if we re-arm).

there is no environmental interventionism in this treaty, although we and the treaty originator have disucssed a later OPTIONAL sidebar agreement.

please do try to distinguish the treaty from the comments made in debate.

Date05:33:30, August 16, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
Messagein other words, what you are being asked to approve is the treaty at http://82.238.75.178:8085/particracy/main/viewtreaty.php?treatyid=5

Date06:15:48, August 16, 2005 CET
From Tuesday Is Coming
ToDebating the Selaya free trade zone: discussion
Message"Ok. We support signing a free trade agreement, but oppose sanctions against Kalistan and oppose the environmental interventionism."

As this now appears to be a free trade agreement alone, we can supprot.

Date12:47:44, August 16, 2005 CET
FromRoyal Conservative Party
ToDebating the Selaya free trade zone: discussion
MessageIf it is so, then I too can support

Date15:21:15, August 16, 2005 CET
FromDemocratic Centre Party of Gaduridos
ToDebating the Selaya free trade zone: discussion
MessageThank you for your support. The conclusions you have reached are all true - although there will be a separate environmental agreement, it will be totally optional to sign it. As for sanctions against Kalistan (or any nation, for that matter), all the treaty says is that sovereign nations can do so if they like, for valid diplomatic reasons. I was only trying to protect national soveriegnty with that clause. Nothing at all requires any sanctions on anyone. This is a trade agreement, not a political one.

Thank you for the seriousness with which you considered this proposal. I am most gratified that you have chosen to ratify it.

Sincerely,
William Chen,
Foreign Affairs Minister, Federal Union of Gaduridos.

Date17:42:58, August 16, 2005 CET
FromCooperative Commonwealth Federation
ToDebating the Selaya free trade zone: discussion
MessageWe are pleased to see that a national consensus has emerged in favour of freedom of trade. We are confident that Lodamun has the leading edge in several sectors over other countries, particularly the green business and recreational drugs industries, and that companies from throughout the world will take advantage of the larger market this agreement provides to invest in clean, friendly, business-like Lodamun.

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