[DRAFT] The National Industrialization Act

[AFT]

Hi guys! Comments, suggestions and criticisms are greatly appreciated! Thanks!

Category: Advancement of Industry
Area of Effect: Protective Tariff

The National Industrialization Act

The World Assembly,

Defining:

a. Raw Materials as the resources which are used in the production of intermediate and/or final goods and are not commonly used for private, domestic consumption;

b. Intermediate Goods as goods which result from the undergoing of raw materials through value-adding process/es and which can be used for consumption or for the production of more goods & services;

c. Final Goods as goods which result from the undergoing of raw materials and/or intermediate goods through value-adding process/es and which can be used for consumption; and

d. Value-Adding Process as any process which transforms raw materials into intermediate and/or final goods;

Realizing that subjecting raw materials to value-adding processes in order to transform the said materials into intermediate and/or final goods would yield a higher Gross Domestic Product (GDP) and employment rate -- through its positive effects on the industries which rely heavily on the aforementioned raw materials -- compared to simply exporting the raw materials;

Acknowledging that the production of intermediate and/or final goods is the only logical substitute to exporting raw materials; and therefore

Recognizing that local economies would benefit more from the production of intermediate or final goods rather than the export of raw materials;

Hereby:

Desires that nations revise their tariff policies so that raw materials are subject to higher tariffs compared to intermediate and final goods either by lowering the tariffs levied on intermediate and final goods or increasing those levied on raw materials; and

Encourages the increased subjection of the specified raw materials to value-adding process/es in order to transform them into intermediate or final goods.

Coauthored by: Jabbax

[Cheyenne and Arapaho Systems]

"The Cheyenne and Arapaho systems require regular trade to sustain ourselves, since our own industrial base is limited to three industrial replicators. We do not desire invasive resource extraction on our planets, and instead mine only from the gas giants and asteroid belts of our third, uninhabited system. This creates some issues, as you can imagine, as we have only a few resources at our immediate disposal. Requiring we raise tariffs on inbound goods would make it difficult to procure medical supplies like Cordrazine or Inaprovaline, or building materials like transparent aluminum or archerite."

[The Greater Siriusian Domain]

May I ask what this proposal actually effectively does? All it seems to do is recommend that nations implement market protection for raw materials, and doesn't actually enforce or impose anything.

[Imperium Anglorum]

This would do the opposite of industrialisation. In fact, it would make it harder for nations to pursue import-substitution industrialisation.

Take a nation. If the cost of raw materials increases and the cost of finished goods decreases, then it becomes comparatively more expensive to pursue manufacturing and less expensive to import things. This means that on a comparative level, the number of manufacturing industries inside a nation decreases.

Whoops. This doesn't actually do this. The proposal only increases the price of importing raw materials. It doesn't do anything to change the price of finished goods.

[AFT]

May I ask what this proposal actually effectively does? All it seems to do is recommend that nations implement market protection for raw materials, and doesn't actually enforce or impose anything.

Basically, I was hoping that the higher tariffs imposed on raw materials would encourage the suppliers of the said materials to sell their products locally rather than exporting them. By being able to keep the goods locally, we are able to transform them into intermediate/final goods, thus, adding value to them. Subjecting these raw materials to value-adding processes would logically yield a higher GDP* compared to if we simply exported the said materials.

**Note that one of the ways for computing GDP is through the value-added approach (GDP = Raw Materials + Added Value from Process 1 + Added Value from Process 2 and so on)

[AFT]

"The Cheyenne and Arapaho systems require regular trade to sustain ourselves, since our own industrial base is limited to three industrial replicators. We do not desire invasive resource extraction on our planets, and instead mine only from the gas giants and asteroid belts of our third, uninhabited system. This creates some issues, as you can imagine, as we have only a few resources at our immediate disposal. Requiring we raise tariffs on inbound goods would make it difficult to procure medical supplies like Cordrazine or Inaprovaline, or building materials like transparent aluminum or archerite."

Hello! If I understand correctly, you are mining from uninhabited planets and asteroids? If that is the case, then I don't think that your operations would count as "imports" (since you are not trading with another nation) and is, thus, not subject to tariffs.

[Cheyenne and Arapaho Systems]

"The Cheyenne and Arapaho systems require regular trade to sustain ourselves, since our own industrial base is limited to three industrial replicators. We do not desire invasive resource extraction on our planets, and instead mine only from the gas giants and asteroid belts of our third, uninhabited system. This creates some issues, as you can imagine, as we have only a few resources at our immediate disposal. Requiring we raise tariffs on inbound goods would make it difficult to procure medical supplies like Cordrazine or Inaprovaline, or building materials like transparent aluminum or archerite."

Hello! If I understand correctly, you are mining from uninhabited planets and asteroids? If that is the case, then I don't think that your operations would count as "imports" (since you are not trading with another nation) and is, thus, not subject to tariffs.

"We rely on trade for all other resources, which are many. We couldn't possibly support our population if we had to instate protectionist measures. We are a spiritual people, with no hunger for great wealth. Raising tariffs would drive away the trading partners we have."

[AFT]

This would do the opposite of industrialisation. In fact, it would make it harder for nations to pursue import-substitution industrialisation.

Take a nation. If the cost of raw materials increases and the cost of finished goods decreases, then it becomes comparatively more expensive to pursue manufacturing and less expensive to import things. This means that on a comparative level, the number of manufacturing industries inside a nation decreases.

Hello! I'm going to answer first with why I think this proposal would indeed help a nation industrialize.

For example, let's say that there is a certain raw material called X. The market price of X is $5.25 locally & $5.5 internationally. This being the case, it is logical to assume that the company who mines X, Company X would rather export its goods than to sell it locally. Now say this proposal gets approved and a tariff of $1 is imposed on the import of X (for the sake of simplicity, I will assume that the burden of the tariff is split evenly between the buyer and the seller). This tariff would then mean that if Company X exports its goods, it would get $5 (5.5 less 1/2), while if it sells it locally, it would get $5.25. Logically, Company X would rather sell its goods locally than to export it.

Now, in this scenario, we know that Company X is now selling its goods locally. But what happens now? Well, it is logical to assume that a local buyer bought X for the purpose of transforming it into an intermediate/final good (Since this transformation of raw to final is the only logical substitute to exporting the raw). Let's call this buyer Company A. By subjecting X through value-adding process/es, Company A is able to transform X into intermediate goods called A, is logically worth more than X (say $11 locally & internationally). From here, company A can choose to export the intermediate good (It doesn't matter which option it chooses. What matters was that it was able to add value to X by transforming it).

Now, what are the effects of such a policy?
1. The major advantage of such a policy is that it will increase a nation's GDP:
Scenario 1 (w/o tariff):
GDP = Export = $5.5

Scenario 2 (w/tariff)
GDP = Raw Materials + Added Value from Transformation Process = $5.25 + $5.75 = $11

While, of course, it is absurd to think that GDP will double simply from the implementation of this policy, it is safe to assume that GDP WILL increase because of the fact that the economy performed more value-adding processes

2. Increase in Employment: This logically follows from the fact that more value-adding processes require more labor. (There is also the added bonus that an increase in employment would possibly create a multiplier effect in the economy)

[AFT]

Hello! If I understand correctly, you are mining from uninhabited planets and asteroids? If that is the case, then I don't think that your operations would count as "imports" (since you are not trading with another nation) and is, thus, not subject to tariffs.

"We rely on trade for all other resources, which are many. We couldn't possibly support our population if we had to instate protectionist measures. We are a spiritual people, with no hunger for great wealth. Raising tariffs would drive away the trading partners we have."

May I ask what kind of resources are you talking about? Because if you are talking about food, medicine, medical equipment etc., then those are not covered by the proposal. The proposal is only for raw materials -- materials which are used for the sake of production, and never (or rarely) for private or domestic consumption

[Cheyenne and Arapaho Systems]

"We rely on trade for all other resources, which are many. We couldn't possibly support our population if we had to instate protectionist measures. We are a spiritual people, with no hunger for great wealth. Raising tariffs would drive away the trading partners we have."

May I ask what kind of resources are you talking about? Because if you are talking about food, medicine, medical equipment etc., then those are not covered by the proposal. The proposal is only for raw materials -- materials which are used for the sake of production, and never (or rarely) for private or domestic consumption

"Fuel. Building materials. Materials that we do not mine. We cannot make neural biogel packs for our data relays on our defense craft, because we lack the lab to make neural substance biogel. We have no native deuterium for fuel. We lack crystal deposits of the proper quality in our mining asteroids to supply our own processors. These are resources that are present in our environment, but we will not damage our worlds to extract it, and our nonhabital planets do not carry it."

[Normlpeople]

"I'm not really sure what this accomplishes" Clover said. "Tarriffs are paid on Imports, which would unfairly punish those who had no access to the resources on thier own".

"There's many reasons to export raw materials that do not constitute a requirement for protectionist measures, such as surplus, shortage of infrastructure or manpower to support a manufacturing base for that resource, or even a lack of know-how or a lack of practical use for a resource."

"This would do nothing but raise the costs of products for the customers in the end. I don't see how this intrusion on domestic taxation is beneficial to the international community in the slightest"

[Imperium Anglorum]

For example, let's say that there is a certain raw material called X. The market price of X is $5.25 locally & $5.5 internationally. This being the case, it is logical to assume that the company who mines X, Company X would rather export its goods than to sell it locally. Now say this proposal gets approved and a tariff of $1 is imposed on the import of X (for the sake of simplicity, I will assume that the burden of the tariff is split evenly between the buyer and the seller). This tariff would then mean that if Company X exports its goods, it would get $5 (5.5 less 1/2), while if it sells it locally, it would get $5.25. Logically, Company X would rather sell its goods locally than to export it.

Now, in this scenario, we know that Company X is now selling its goods locally. But what happens now? Well, it is logical to assume that a local buyer bought X for the purpose of transforming it into an intermediate/final good (Since this transformation of raw to final is the only logical substitute to exporting the raw). Let's call this buyer Company A. By subjecting X through value-adding process/es, Company A is able to transform X into intermediate goods called A, is logically worth more than X (say $11 locally & internationally). From here, company A can choose to export the intermediate good (It doesn't matter which option it chooses. What matters was that it was able to add value to X by transforming it).

This isn't how tariffs work. Tariffs are a tax which is imposed on something after it has been made. If you have a price of 5.5 dollars, the tariff in a Foreign Country of 1 dollar would be applied on top of that 5.5 dollars, raising the internal price of that good to 6.5 dollars, which, given the relative elasticities of demand and supply of that good in the foreign nation, would lead to the exporting firm receiving 5.5 as MR anyway.

Now, what are the effects of such a policy?
1. The major advantage of such a policy is that it will increase a nation's GDP:
Scenario 1 (w/o tariff):
GDP = Export = $5.5

Scenario 2 (w/tariff)
GDP = Raw Materials + Added Value from Transformation Process = $5.25 + $5.75 = $11

You're calculating GDP wrong. A product method for calculating GDP would utilise the intermediate good (5.25, here) with the final value added, (5.75- 5.25), leading to a GDP calculation of 5.75. The raw materials do not count in GDP calculations because they are not final goods. This is entirely to ignore the fact that what you're proposing wouldn't do what you say it will and entirely ignores the fact that GDP is made of both prices and quantities.

While, of course, it is absurd to think that GDP will double simply from the implementation of this policy, it is safe to assume that GDP WILL increase because of the fact that the economy performed more value-adding processes

Which it won't, because there will be less economic activity occurring when one increases tariffs on raw materials only. That simply makes it more expensive to import raw materials from abroad, whilst not doing anything to manufactured materials. Increased prices for importing raw materials would simply raise the costs for manufacturing firms.

There is an argument to be made about whether this would increase the relative price of imported manufactured goods, since it would lead to an increase in price level due to the higher costs of imported raw materials that leads to a relative cheapening of the price of imported manufactured goods.

2. Increase in Employment: This logically follows from the fact that more value-adding processes require more labor. (There is also the added bonus that an increase in employment would possibly create a multiplier effect in the economy)

1. The multiplier effect in an open economy is empirically measured to be somewhere around 0.7-0.9. It is only in old closed-econonomy models which have high multipliers.
2. That extra economic activity doesn't happen.
3. If we look at the Cobb-Douglas function, then Y = K^α ( A * L^(1-α) ). Increases in Y are not dependant on increases in L. Further capital accumulation can lead to growth of production.

[AFT]

For example, let's say that there is a certain raw material called X. The market price of X is $5.25 locally & $5.5 internationally. This being the case, it is logical to assume that the company who mines X, Company X would rather export its goods than to sell it locally. Now say this proposal gets approved and a tariff of $1 is imposed on the import of X (for the sake of simplicity, I will assume that the burden of the tariff is split evenly between the buyer and the seller). This tariff would then mean that if Company X exports its goods, it would get $5 (5.5 less 1/2), while if it sells it locally, it would get $5.25. Logically, Company X would rather sell its goods locally than to export it.

Now, in this scenario, we know that Company X is now selling its goods locally. But what happens now? Well, it is logical to assume that a local buyer bought X for the purpose of transforming it into an intermediate/final good (Since this transformation of raw to final is the only logical substitute to exporting the raw). Let's call this buyer Company A. By subjecting X through value-adding process/es, Company A is able to transform X into intermediate goods called A, is logically worth more than X (say $11 locally & internationally). From here, company A can choose to export the intermediate good (It doesn't matter which option it chooses. What matters was that it was able to add value to X by transforming it).

This isn't how tariffs work. Tariffs are a tax which is imposed on something after it has been made. If you have a price of 5.5 dollars, the tariff in a Foreign Country of 1 dollar would be applied on top of that 5.5 dollars, raising the internal price of that good to 6.5 dollars, which, given the relative elasticities of demand and supply of that good in the foreign nation, would lead to the exporting firm receiving 5.5 as MR anyway.

Now, what are the effects of such a policy?
1. The major advantage of such a policy is that it will increase a nation's GDP:
Scenario 1 (w/o tariff):
GDP = Export = $5.5

Scenario 2 (w/tariff)
GDP = Raw Materials + Added Value from Transformation Process = $5.25 + $5.75 = $11

You're calculating GDP wrong. A product method for calculating GDP would utilise the intermediate good (5.25, here) with the final value added, (5.75- 5.25), leading to a GDP calculation of 5.75. The raw materials do not count in GDP calculations because they are not final goods.

While, of course, it is absurd to think that GDP will double simply from the implementation of this policy, it is safe to assume that GDP WILL increase because of the fact that the economy performed more value-adding processes

Which it won't, because there will be less economic activity occurring when one increases tariffs on raw materials only. That simply makes it more expensive to import raw materials from abroad, whilst not doing anything to manufactured materials. Increased prices for importing raw materials would simply raise the costs for manufacturing firms.

There is an argument to be made about whether this would increase the relative price of imported manufactured goods, since it would lead to an increase in price level due to the higher costs of imported raw materials that leads to a relative cheapening of the price of imported manufactured goods.

2. Increase in Employment: This logically follows from the fact that more value-adding processes require more labor. (There is also the added bonus that an increase in employment would possibly create a multiplier effect in the economy)

1. The multiplier effect in an open economy is empirically measured to be somewhere around 0.7-0.9. It is only in old closed-econonomy models which have high multipliers.
2. That extra economic activity doesn't happen.
3. If we look at the Cobb-Douglas function, then Y = K^α ( A * L^(1-α) ). Increases in Y are not dependant on increases in L. Further capital accumulation can lead to growth of production.

Huh? I disagree. Don't tariffs work like taxes? The only way that the price would rise to $6.5 and that the suppliers would carry the burden of the entire tax is if the demand is perfectly inelastic. I highly doubt that the demand curve is a vertical line. This being the case, the price of the good would increase by less than $1 & the price received would be less than $5.5

You're calculating GDP wrong. A product method for calculating GDP would utilise the intermediate good (5.25, here) with the final value added, (5.75- 5.25), leading to a GDP calculation of 5.75. The raw materials do not count in GDP calculations because they are not final goods.

I disagree here as well. GDP must be 11 since the price of the intermediate good produced is 11. Also, there is a method of calculating GDP called the value-added approach which says that GDP = Raw Materials + Value added by process 1 + value added by process 2 and so on. Also, even if I use a different approach of calculating GDP, say the output approach (which computes GDP by summing the value of the sales of goods and subtracting the purchases of raw materials used to produce the goods sold), I would still get 11:

GDP = $5.25 (Raw Materials Sold by Company X) + 11 (Intermediate Goods Sold by Company A) - 5.25 (Raw Materials Bought by Company A from Company X) = $11

1. The multiplier effect in an open economy is empirically measured to be somewhere around 0.7-0.9. It is only in old closed-econonomy models which have high multipliers.
2. That extra economic activity doesn't happen.
3. If we look at the Cobb-Douglas function, then Y = K^α ( A * L^(1-α) ). Increases in Y are not dependant on increases in L. Further capital accumulation can lead to growth of production.

I concede that there is no multiplier effect that would take place. I forgot that the investment multiplier only worked in closed economies. On another note though, won't the increased production encourage the businesses to invest more on capital goods?

[Imperium Anglorum]

Huh? I disagree. Don't tariffs work like taxes? The only way that the price would rise to $6.5 and that the suppliers would carry the burden of the entire tax is if the demand is perfectly inelastic. I highly doubt that the demand curve is a vertical line. This being the case, the price of the good would increase by less than $1 & the price received would be less than $5.5

I was thinking in the short run at the period of the tariff's imposition (along with a bit of brain-fart). However, your assumption is still flawed in that the imposition of a tariff would lead to people selling at home. This would only be the case if all nations levied the same tariff. Tariffs do not affect exporting firms in the way you describe, since one would then simply sell to some other nation without the tariff and therefore get the same revenue. Tariffs only affect import prices, not export prices.

Before Tariff -> sell at 5.75
After Tariff -> sell at 5.75 to some other nation where I don't have to take the revenue cut

Which seems to make me think that you don't understand how tariffs work. Because they are not export duties, they're import duties. You pay money to import something, not export it.

You're calculating GDP wrong. A product method for calculating GDP would utilise the intermediate good (5.25, here) with the final value added, (5.75- 5.25), leading to a GDP calculation of 5.75. The raw materials do not count in GDP calculations because they are not final goods.

I disagree here as well. GDP must be 11 since the price of the intermediate good produced is 11. Also, there is a method of calculating GDP called the value-added approach which says that GDP = Raw Materials + Value added by process 1 + value added by process 2 and so on. Also, even if I use a different approach of calculating GDP, say the output approach (which computes GDP by summing the value of the sales of goods and subtracting the purchases of raw materials used to produce the goods sold), I would still get 11:

GDP = $5.25 (Raw Materials Sold by Company X) + 11 (Intermediate Goods Sold by Company A) - 5.25 (Raw Materials Bought by Company A from Company X) = $11

I'm familiar with the value-added approach. We just happen to call it the product approach. Your GDP is impossibly high because you're not accounting for the different goods. GDP is made up of final goods and services. Using a CIGNX, it would be 0 + 0 + 0 + Exported. Using a value added approach, it would simply be the raw material itself.

In the case where you create a magical buyer which does your value-added stuff, your GDP is 11, but that is already there in the exporting case, just you don't add it in...

GDP_1 = Exported Raw Materials (5.75) — Imported Raw Materials (5.75) + Final Product (11) = 11
GDP_2 = (Intermediate raw materials, not counted) + Final Product (11) = 11

This is entirely to ignore the differences in quantity that occur due to this change.

1. The multiplier effect in an open economy is empirically measured to be somewhere around 0.7-0.9. It is only in old closed-econonomy models which have high multipliers.
2. That extra economic activity doesn't happen.
3. If we look at the Cobb-Douglas function, then Y = K^α ( A * L^(1-α) ). Increases in Y are not dependant on increases in L. Further capital accumulation can lead to growth of production.

I concede that there is no multiplier effect that would take place. I forgot that the investment multiplier only worked in closed economies. On another note though, won't the increased production encourage the businesses to invest more on capital goods?

2. The extra economic activity doesn't happen.

[Imperium Anglorum]

rd = raw, domestic
ri = raw, international
md = manufactured, domestic
mi = manufactured, international

P_rd < P_ri
P_md > P_mi

Then, raw materials producers would simply sell to the international market and ignore the domestic one. Consumers would import their manufactured goods from the international market. To industrialise, you want to make manufacturing at home competitive with the international market, i.e. bring P_md down. I simply don't see any way in which raising the cost of importing raw materials from the international market place would lead to P_md's decrease. For example, if I am Saudi Arabia, and I levy a tariff on imported oil, that tariff doesn't do anything because we don't import oil.

I also don't buy the efficacy of increasing the effective P_mi by charging a tariff on manufacturing imports. This would simply mean that you have the same inefficient domestic production and no incentive to improve that domestic production. Especially after you consider the Latin American experience with import-substitution industrialisation — it doesn't work.

What does work, however, is international capital moving into a nation and reducing the P_md. This is export-oriented industrialisation, which has proven to work (China [the real one], Japan, South Korea, Mainland China, Vietnam, etc). This is because national production functions are dependant on capital stock and also on labour utilisation. The demographic transition observed in industrialising countries has much to do with labour mobility and the movement of people away from farms and into cities and factories. But one can only do that if you have higher wages in manufacturing, which is dependant on their marginal product, which is then dependant on capital stock and technology.

This is also why I would say that the majority of the problems with achieving industrialisation are political in nature. Nations which refuse to allow for investment or produce environments that actively disincentivise investment are not going to industrialise if you require large amounts of capital stock to do it. Weak institutions have more of a role to play than faults of the people living there.

[AFT]

My initial plan was to actually place a limit on the amount of exports of raw materials a countrycan make. This way, suppliers would be forced to selleithin the country, and thus, they would have to process it themselves. However, my coauthor suggested that this idea might not be too popular and would, thus not garner much support, so I decided to dilute the proposal. In any case, would my initial proposal be a better idea? Or do you guys have any suggestions as to how I can accomplish my goal (which is to make sure that a nation would be the one to benefit the most from his/her natural resources and not other nations?)

Thanks

[Imperium Anglorum]

My initial plan was to actually place a limit on the amount of exports of raw materials a countrycan make. This way, suppliers would be forced to selleithin the country, and thus, they would have to process it themselves.

But this doesn't lead to industrialisation. It simply leads to underutilised resources. And those underutilised resources would just lead to the mines and raw material producers going out of business. You can't just make industrialisation happen. You need capital, and increasing the quantity of raw materials sitting around is not more capital.

Or do you guys have any suggestions as to how I can accomplish my goal (which is to make sure that a nation would be the one to benefit the most from his/her natural resources and not other nations?)

The poverty trap is called the poverty trap for a reason. I would also say that price manipulation would do nothing to lead to industrialisation. Development is contingent on productivity, which is itself dependant on capital. Manipulating prices of raw materials doesn't lead to increases in productivity and capital stock.

[Normlpeople]

"How would that be the case?" Clover asked "If we actively mine coal, and do not use it, why should we not sell it to those that do?"

"Limiting exports would be a violation of GAR #68."

[AFT]

Hmmmm, okay. Thanks for your suggestions! Welp, back to the drawing board!

[Imperium Anglorum]

"How would that be the case?" Clover asked "If we actively mine coal, and do not use it, why should we not sell it to those that do?"

What happens is that because you've got limited exports, the price of coal decreases. Decreasing the price of that good, in both perfect and imperfect competition, leads to coal miners going out of business. This harms your economy.

---

Hmmmm, okay. Thanks for your suggestions! Welp, back to the drawing board!

Find some way to increase productivity. Two major determinants are human capital and capital stock. The former is dependent on education. The latter is dependent multiple things. For example, it is dependent on consumption (since C + A = Y). It is also based on depreciation and investment incentives.

I would say that actions to increase the efficiency of capital markets and creating stronger institutions that respect property rights are probably the most important thing in setting off industrialisation. But both of those things are opposed by people who hate corporations and people who hate property rights (e.g. socialists).

[Normlpeople]

"How would that be the case?" Clover asked "If we actively mine coal, and do not use it, why should we not sell it to those that do?"

What happens is that because you've got limited exports, the price of coal decreases. Decreasing the price of that good, in both perfect and imperfect competition, leads to coal miners going out of business. This harms your economy.

Clover nodded "Only if you are foolish enough to produce past the point of productivity. Our nations businesses are more intelligent than to do this."

OOC: I think we're saying the same thing. The numbers are nothing but helpful proving the point.

[The Greater Siriusian Domain]

May I ask what this proposal actually effectively does? All it seems to do is recommend that nations implement market protection for raw materials, and doesn't actually enforce or impose anything.

Basically, I was hoping that the higher tariffs imposed on raw materials would encourage the suppliers of the said materials to sell their products locally rather than exporting them. By being able to keep the goods locally, we are able to transform them into intermediate/final goods, thus, adding value to them. Subjecting these raw materials to value-adding processes would logically yield a higher GDP* compared to if we simply exported the said materials.

**Note that one of the ways for computing GDP is through the value-added approach (GDP = Raw Materials + Added Value from Process 1 + Added Value from Process 2 and so on)

With the way it's written it still only makes WA-sponsored recommendations and doesn't actually require WA members to do anything. In other words, as written it effectively does nothing, changes nothing, and has no end result. I'm pretty sure that breaks the Optionality rule.

Also, you forgot to define a proposal strength.

To everyone else, I'd like to suggest trying to help the author make this proposal legal for submission first before actually discussing it IC.

[Cheyenne and Arapaho Systems]

Ambassador Standing Feather looked around, "Can we assume that this has been abandoned by the chief drafter? Though we will not miss this resolution, we hope the chief drafter has not given up."