[DEFEATED] Fairness in Multilateral Trade

[Auralia]

Fairness in Multilateral Trade
Category: Free Trade | Strength: Significant

Concerned that protectionism often introduces harmful and unnecessary barriers to international trade,

Convinced that discrimination between World Assembly (WA) member nations in international trade is therefore a clear obstacle to worldwide economic prosperity and thus should be considered a serious hazard to national populations,

The General Assembly hereby adopts this resolution on fairness in multilateral trade:

Article I: Most-Favoured-Nation Status and National Treatment

Section 1: Any trade preference granted by a member nation for a good or service originating from or destined for another member nation must be granted to the same type of good or service originating from or destined for all other member nations.

Section 2: Any internal taxes or regulations on a good or service of domestic origin must be applied equally to the same type of good or service originating from other member nations.

Article II: Exceptions to Most-Favoured-Nation Status and National Treatment

Section 1: The provisions of Article I do not apply to any goods or services which originate from or are destined for a non-member nation.

Section 2: The provisions of Article I do not preclude the creation of free trade areas or customs unions or the continuation of existing ones, so long as such areas or unions are created to facilitate free trade between their members, not to raise trade barriers for all other member nations.

Section 3: The provisions of Article I may be suspended if a discriminatory subsidy applied by a member nation is causing significant damage to another member nation's domestic industries. Only proportional retaliation is authorized under this provision.

Section 4: The provisions of Article I may be suspended in order to take measures necessary to ensure reasonable quality control on goods and services, so long as such measures do not constitute unreasonable discrimination between goods and services from different member nations with similar issues.

Section 5: The provisions of Article I may be suspended in order to protect vital national security interests during serious international disputes or times of war, or in the event of a significant violation of international law.

Section 6: The provisions of Article I must be suspended in order to comply with previous WA resolutions. Furthermore, nothing in this resolution should be interpreted as preventing the WA from developing additional reasonable and appropriate international trade regulations that are consistent with the goals of this resolution, as well as the interests of sustainable development and poverty reduction.

Article III: Dispute Resolution Mechanism

Section 1: If any member nation believes another member nation is in violation of international trade law, or applying measures deemed both unfair and damaging to other member nations, regardless of their legality, the nations are requested to negotiate with one other to resolve the dispute.

Section 2: The matter may be referred to the International Trade Association (ITA) for non-binding mediation with the consent of both nations during this time.

Section 3: If the dispute is not resolved within a reasonable length of time, the matter may be referred to the ITA for binding arbitration with the consent of both nations. The ITA is empowered to impose any fines, penalties or sanctions it deems appropriate on nations which do not comply with its rulings.

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A Brief Justification for this Proposal

The fundamental basis for this proposal is the benefits of free trade. Free trade between nations provides additional access to markets, providing more customers for businesses to sell their goods and services. Free trade also provides an additional variety of goods for sale, to give customers more choice. Free trade also forces industries to be more competitive, resulting in cheaper and higher quality products, and forces countries to focus their resources on what they're good at as opposed to non-competitive industries, maximizing quality and efficiency. In direct contrast, protectionism often grants some short-term benefits, but ultimately does the opposite in each of the aforementioned cases, making it harmful to a nation’s economy overall.

A crucial step towards free trade is non-discrimination between nations. Most favoured nation and national treatment forces nations to treat each other equally, providing an incentive for them to lower trade barriers to all so as not to cut them off to international trade. This means that the international community will move towards free trade much faster than it would through limited regional free trade agreements and customs unions. Non-discrimination also simplifies the tariff system, resulting in less red tape. This proposal essentially mandates that nations adopt this system of non-discrimination in trade. It also includes a dispute settlement process, in the event that nations disagree on some component of international trade law.

Of course, we recognize that opening up markets to every nation equally is unfeasible in certain cases, which is why we've included several exceptions, such as during serious international disputes, or if discriminatory subsidies are being applied by another nation, among other situations. In this way, we maximize the benefits of international trade, while not forcing nations to adopt policies which would harm them economically.

[Luziyca]

Sequoia then shouted, "I AM OPPOSED! The Christian Republic opposes this since it will force us to trade with communist nations, whose goods are inferior than capitalist goods. We are staunchly anti-communist, and unless if that ENTIRE SECTION regarding the mandatory most favored nation status is removed, it must be at least A MAJORITY."

She then karate-chopped Auralia's ambassador how Miss Piggy from the Muppets did it.

[Auralia]

Sequoia then shouted, "I AM OPPOSED! The Christian Republic opposes this since it will force us to trade with communist nations, whose goods are inferior than capitalist goods. We are staunchly anti-communist, and unless if that ENTIRE SECTION regarding the mandatory most favored nation status is removed, it must be at least A MAJORITY."

She then karate-chopped Auralia's ambassador how Miss Piggy from the Muppets did it.

If the goods from communist nations are so inferior, then won't individual businesses and consumers decide not to purchase them because it's in their best interests not to do so? Why are extra government regulations necessary?

[Luziyca]

Sequoia then shouted, "I AM OPPOSED! The Christian Republic opposes this since it will force us to trade with communist nations, whose goods are inferior than capitalist goods. We are staunchly anti-communist, and unless if that ENTIRE SECTION regarding the mandatory most favored nation status is removed, it must be at least A MAJORITY."

She then karate-chopped Auralia's ambassador how Miss Piggy from the Muppets did it.

If the goods from communist nations are so inferior, then won't individual businesses and consumers decide not to purchase them because it's in their best interests not to do so? Why are extra government regulations necessary?

Sequoia then commented, "They are necessary because the red threat is everywhere, like Iglesian Archipelago, and Crystal Spires to name a few. And what happens to WA nations that commit genocide, or are communist? We cannot trade for them."

[Auralia]

If the goods from communist nations are so inferior, then won't individual businesses and consumers decide not to purchase them because it's in their best interests not to do so? Why are extra government regulations necessary?

Sequoia then commented, "They are necessary because the red threat is everywhere, like Iglesian Archipelago, and Crystal Spires to name a few. And what happens to WA nations that commit genocide, or are communist? We cannot trade for them."

Under the terms of the proposal, temporary trade sanctions can be applied. Isn't that sufficient?

[Luziyca]

Sequoia then commented, "They are necessary because the red threat is everywhere, like Iglesian Archipelago, and Crystal Spires to name a few. And what happens to WA nations that commit genocide, or are communist? We cannot trade for them."

Under the terms of the proposal, temporary trade sanctions can be applied. Isn't that sufficient?

Sighing, Sequoia said, "You are evading the question. Lets take an example:

Nation X, ruled by Ayrl, is just and democratic. Nation Y, was ruled by Bill, but was overthrown by Bob, who was oppressive.

Under current WA laws, I can simply place permanent sanctions until they democratize, or raise tariffs to punish them for adopting the oppressive ideology. But, if this resolution were to pass, it could mean sanctions would only last for a short amount of time before Nation X are forced to trade Nation Y. Unless if we kept the definition vague, so for the member nations can define what is temporarily, or at least have it at 100 years as the maximum for 'temporary' trade sanctions.

That would leave Nation X with no option but to invade Nation Y, thus potentially depriving them of sovereignty. Without this draft, it would be easier, to convince nations and governments with trade sanctions, than invasions. Do you get it now?"

[Auralia]

Under the terms of the proposal, temporary trade sanctions can be applied. Isn't that sufficient?

Sighing, Sequoia said, "You are evading the question. Lets take an example:

Nation X, ruled by Ayrl, is just and democratic. Nation Y, was ruled by Bill, but was overthrown by Bob, who was oppressive.

Under current WA laws, I can simply place permanent sanctions until they democratize, or raise tariffs to punish them for adopting the oppressive ideology. But, if this resolution were to pass, it could mean sanctions would only last for a short amount of time before Nation X are forced to trade Nation Y. Unless if we kept the definition vague, so for the member nations can define what is temporarily, or at least have it at 100 years as the maximum for 'temporary' trade sanctions.

That would leave Nation X with no option but to invade Nation Y, thus potentially depriving them of sovereignty. Without this draft, it would be easier, to convince nations and governments with trade sanctions, than invasions. Do you get it now?"

After reviewing your comments and the minutes of the debate for "On International Trade", I am beginning to feel that this sentiment will probably be echoed by many other WA nations. While I question whether indefinite sanctions are the only way to resolve diplomatic disputes, I will make changes to the proposal to take into account your concerns.

[Scandavian States]

The various trade levels, including Most Favored Nation status, are tried into the Imperial tax code. As this would undoubtedly harm the Empire's budget, we are opposed.

[Naboompu]

It is ironic that the virulenly anti-Communist nations support trade sanctions and high tariffs. In the interest of the diametrically-opposed concept of free trade, one would think that they would be the most stringent of supporters of economic freedoms. However, it seems that many ostensibly economically-liberal nations are in fact supporters of the asinine notion that they can 'choose' when to support their ideals. The purpose of a philosophical system of thought is to uphold one's beliefs, which when not upheld are meaningless. As an 'actual' capitalist nation, Naboompu firmly supports this resolution and believes no changes are truly necessary.

[Auralia]

The various trade levels, including Most Favored Nation status, are tried into the Imperial tax code. As this would undoubtedly harm the Empire's budget, we are opposed.

Could you clarify what you mean by this?

[Scandavian States]

Part of the Imperial Government's revenue is generated by tariffs, these tariffs are based upon a tiered system:

Most Favored Trade Partner (close allies): 0.15% rate on the assessed value of goods and a 0.15 USD/cargo ton transit rate for the Padma Canal
Favored Trade Partner (allies): 1.5% rate on the assessed value of goods and a 1.50 USD/cargo ton transit rate for the Padma Canal
Normalized Trade Partner (cordial relations): 15% rate on the assessed value of goods and a 15.00 USD/cargo ton transit rate for the Padma Canal
Disfavored Trade Partner (some form of int'l backstabbing): 150% rate on the assessed value of goods and a 150.00 USD/cargo ton transit rate for the Padma Canal
Most Disfavored Trade Partner (nations the Empire has been at war with): 1,500% rate on the assessed value of goods and a 1,500.00 USD/cargo ton transit rate for the Padma Canal


Obviously our rates are not economically protectionist in nature, but depend on the diplomatic relations the Empire has with a nation looking to import goods. Even MDTP isn't a permanent condition, provided that the offending nation is committed to changing itself and becoming cordial partners with the Empire. Our problem is that, frankly, your resolution would force us to permanently grant MFTP to all WA nations. And for what? Perhaps a couple World Assembly members have shed blood with the Empire, have committed their treasure and honour in the Empire's defense, or have in other ways earned the Empire's regard. The rest? They receive NTP and should be happy for it.

[Auralia]

Part of the Imperial Government's revenue is generated by tariffs, these tariffs are based upon a tiered system:

Most Favored Trade Partner (close allies): 0.15% rate on the assessed value of goods and a 0.15 USD/cargo ton transit rate for the Padma Canal
Favored Trade Partner (allies): 1.5% rate on the assessed value of goods and a 1.50 USD/cargo ton transit rate for the Padma Canal
Normalized Trade Partner (cordial relations): 15% rate on the assessed value of goods and a 15.00 USD/cargo ton transit rate for the Padma Canal
Disfavored Trade Partner (some form of int'l backstabbing): 150% rate on the assessed value of goods and a 150.00 USD/cargo ton transit rate for the Padma Canal
Most Disfavored Trade Partner (nations the Empire has been at war with): 1,500% rate on the assessed value of goods and a 1,500.00 USD/cargo ton transit rate for the Padma Canal


Obviously our rates are not economically protectionist in nature, but depend on the diplomatic relations the Empire has with a nation looking to import goods. Even MDTP isn't a permanent condition, provided that the offending nation is committed to changing itself and becoming cordial partners with the Empire. Our problem is that, frankly, your resolution would force us to permanently grant MFTP to all WA nations. And for what? Perhaps a couple World Assembly members have shed blood with the Empire, have committed their treasure and honour in the Empire's defense, or have in other ways earned the Empire's regard. The rest? They receive NTP and should be happy for it.

To put it bluntly, we feel trade relationships should be determined primarily by the free market, not the government. We feel your tariff structure unnecessarily limits economic growth, and thus we are opposed to it.

[Scandavian States]

With all due respect, so far as the Empire is concerned you are wrong. The World Assembly ranks the Empire in the top 10% of fastest growing economies, despite the fact that our GDP is almost a quadrillion USD and earned income is well over that point, and imports into our nation outweigh exports by a substantial margin. Further, what of those nations that derive income solely by consumption taxes and import tariffs? Your resolution would substantially inhibit their revenue and severely cut into their ability to provide the services they are pledged to provide.


[Free Market != open ports. Even IRL, MFN status just means tariffs are reduced, not eliminated.]

[Malgrave]

The United Kingdom of Malgrave do not wish their foreign and trade policy to be dictated by the Word Assembly. We are opposed to this resolution in it's current form.

[Libraria and Ausitoria]

Before we start, we should mention that unless we voice an objection to it, we're happy with it. Or we haven't noticed it. We are strongly in favour of free trade, and support this proposal as a positive step in the right direction. However, there are a few details:

First, we think (II) 1 should be removed. Many nations, upon seeing this at vote, could simply quickly set new rules. If you really do have to keep this here to appease people, if you could force it to be phased out that would be appropriate; and we would like to be explicitly permitted to use retaliatory measures while nations keep this nasty barrier to free trade.

In its place, we would like to see something stating that 'charges for investigating incoming goods/services for criminal activity are exempt, unless such a criminal activity is invented or increased for the purpose of discriminating against foreign goods and/or services'. We don't think nations should have to pay for other people's customs duties.

We think that (I) 2 should be replaced with:

Section 2: WA member nations must adopt the principle of national treatment for all other WA member nations. Any taxes, regulations, or subsidies on a particular type of good or service of domestic origin must be applied equally to the same type of good or service originating from any other WA member nation.

We don't want nations subsidizing their own companies.

We would also like it if permission could be granted to place other restrictions on goods imported from somewhere if they originally came from a non-WA member nation; because we (and many other nations) need to be able to enforce blockades on nations that commit genocide and so on. This could be included in (II) 2.

Finally, we think a World Bank or Monetary Fund - if we have either, I've forgotten, and if we don't, one can be made - should be able to grant permission for small proportional temporary discriminatory tariffs or small temporary discriminatory subsidies to allow the recovery of a nation's industries if they are actively pursuing measures to regain competitiveness, that would be appropriate.

(And on a small note of writing, "Sections 1-4" could be removed from the last line. It means you won't need to keep track if amendments are made.)

[Hirota]

The World Assembly ranks the Empire in the top 10% of fastest growing economies, despite the fact that our GDP is almost a quadrillion USD and earned income is well over that point, and imports into our nation outweigh exports by a substantial margin.

Your nation is only among the top 10% and you try and claim your nation is somehow qualified to state the best way forward for the WA as a whole?

Obviously you are opposed and your entitled to look out for your governments interests, but I don't see that as a reason for this to not get submitted for the Assemblies wider consideration.

Having said all that, I suspect this may conflict with resolution #68 "National Economic Freedoms", and maybe #70 too

Finally, we think a World Bank or Monetary Fund - if we have either, I've forgotten, and if we don't, one can be made

WA General Fund - although to mention it in specifics would be a house of cards violation.

[Libraria and Ausitoria]

Finally, we think a World Bank or Monetary Fund - if we have either, I've forgotten, and if we don't, one can be made

WA General Fund - although to mention it in specifics would be a house of cards violation.

"No, not the General Fund," said Lord Whittingrey. "Surely we've got some sort of corporation that goes around lending poor nations money and giving them advice to help develop? If we haven't, we ought to have one... I'll go and check... "

EDIT: "Judging by wikipedia, we don't have one, which is fairly shocking. Can we create one? Just something that goes around giving advice to poor nations and lending them money from the WA general fund to help their development. And giving them the power to create temporary subsidies/tarrifs."

[Anacasppia]

Greetings,

While the Cabinet of the Federal Republic of Anacasppia strongly believes in economic freedoms, we also insist that this does not come at the cost of our morality and ethics. We hereby urge Auralia to amend the proposal to extend non-discrimination only to nations whose exports and imports, and the derived funds, are deemed to have no uses in unethical activities such as genocide or any other crimes against humanity.

Regards,
The Cabinet of the Federal Republic of Anacasppia

[Grays Harbor]

"Most Favoured Nation" and taxation & duties policies are best determined by each nation according to their own national interest, their domestic and internatinal policies and economic realities; Not by a blanket "we're all pals, aren't we?" statement and one-size-fits-all policy dictated by the WA. This is completely unacceptable.

[Southern Patriots]

"The representative from Grays Harbor addresses the matter quite well. This truly is not an area where a World Assembly generalised policy is necessary."

[Scandavian States]

Your nation is only among the top 10% and you try and claim your nation is somehow qualified to state the best way forward for the WA as a whole?

The Ambassador from Hirota is being completely disingenuous. We were merely refuting his opinion that that the Empire's tax policies were somehow harming the Empire's economy in general and its growth specifically. However, upon reflection, we believe the Ambassador from Auralia was also being disingenuous and we believe that this is a vehicle to benefit Auralia and not the entire World Assembly. The Empire remains firmly opposed.

[Hirota]

Your nation is only among the top 10% and you try and claim your nation is somehow qualified to state the best way forward for the WA as a whole?

The Ambassador from Hirota is being completely disingenuous. We were merely refuting his opinion that that the Empire's tax policies were somehow harming the Empire's economy in general and its growth specifically.

As a Nation in the top 5% of fastest growing economies, I think we are quite entitled to dispense economic advice to nations who are merely in the top 10%. Spirit of co-operation and all that jazz, Ambassador.

[The Most Glorious Hack]

As a Nation in the top 5% of fastest growing economies, I think we are quite entitled to dispense economic advice to nations who are merely in the top 10%. Spirit of co-operation and all that jazz, Ambassador.

I agree with Scandavian States's position, and I'm ranked in the top 1% for fastest growing economies, so clearly I'm right and you're wrong.

[Eburnea]

I understand the aims of this legislation but, say, if someone decided that they did not like another nation and would like to end all trade and diplomatic relations to that country, they would have to treat all other WA members equally. However, since the WA is quite large, there are few nations left in the world for them to trade with. This would severly limit their freedom and I feel that this section should be modified. Perhaps it could be that members who both feel a similar way about trade to other countries could instead trade solely with each other and not be fully exluded from the WA?

[Scandavian States]

As a Nation in the top 5% of fastest growing economies, I think we are quite entitled to dispense economic advice to nations who are merely in the top 10%. Spirit of co-operation and all that jazz, Ambassador.

Spirit of cooperation? What is that? The Empire only understands informed self-interest. And we were not giving out advice, as we believe every nation should be able to set its own economic policy without interference from other nations.