DEFEATED: Fairness in Currency Exchange

[Krioval]

This proposal has now been submitted for delegate approval.

Fairness in Currency Exchange
Category: Free Trade
Strength: Significant

Description: The World Assembly,

RECOGNIZING the importance of international commerce and industry,

DETERMINED to promote both free and fair opportunities for international trade,

NOTING that the most WA member nations have their own separate currencies, and that the effective values at which these can be exchanged for each other can vary from market to market as well as over time,

CONCERNED that inefficiencies involved in this exchange process, including a lack of up-to-date knowledge about effective values, may impede the natural flow of trade between nations;

DECLARES that the governments of WA member nations may not:
1. Impose any special taxation upon the process of exchanging any one nation’s currency for any other nation’s currency within their jurisdictions, nor permit any sub-national government or other organisation within their jurisdictions to do so either, although any general taxes that are applicable to all other forms of commercial activity therein may also be imposed upon this business;
2. Allow the existence of any legally-protected monopolies or oligopolies over this currency- exchanging business within their jurisdictions, unless these are granted purely to government agencies that do not operate on a profit-making basis and whose fees for carrying out the transactions concerned do not exceed the levels that are necessary to cover their reasonable expenses;
3. Permit any bodies that are carrying out currency-exchanging operations within their jurisdictions to practice unfair discrimination in this process;

CREATES the World Currency Exchange Commission (or WCEC) to monitor exchange rates between the currencies of World Assembly members, and declares that:
1. WCEC must collect accurate information about international exchange rates, on as frequent a basis as is reasonably possible, and must make this information freely available to all WA member nations’ governments;
2. All national governments of WA member nations must cooperate with WCEC in the gathering of this data, and must make the information that WCEC provides to them freely available upon request to all relevant organisations within their jurisdictions;
3. WCEC has the power of binding arbitration in any appeals about the application of this resolution’s terms within particular nations that may be brought before it, including the power to order the payment of appropriate compensation to any people who have been adversely affected by abuses of these rules, and there is a general right of appeal from all member nations’ own legal systems to WCEC for this purpose.

Co-author: Bears Armed.

[Bergnovinaia]

I'm not sure about you but we in Bergnovinaia do not impose any such tax. I have no clue as what your proposal is even aiming at but that's just me.

[Krioval]

There are two goals. The first is to establish an agency that can monitor currency exchange rates. By doing so, and by releasing the information in a timely manner, international industries will be able to know how much things cost in a foreign country, and the relative strength between their home nation's buying power and that of their host (foreign) nation.

The second goal is to further increase trade opportunities by forbidding any national tax on currency conversion. This might discourage foreign investment much in the same way as a tariff might - it costs more for foreign industry to set up shop in a given country if they're being dinged 1-2% on each transaction. If a nation does not impose such a tax (OOC: Tobin Tax), then that part of the proposal would not affect that nation.

Do these explanations help?

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

OOC: It's tough to separate IC from OOC when writing proposals, I'm finding. Assume that any voids in Darvek's comments are primarily voids in *my* understanding (for now, at least).

[Bergnovinaia]

Ok. That sounds like a good proposal I guess. Ummm... So if the point is to abolish tax when exchanging currency then why do you still have tax?

[Krioval]

The final clause prohibits nations from putting a tax on currency exchange.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Bergnovinaia]

Oh ok sorry. I misread it. Actually after reading it over I think it's pretty good. As long as it's not illegal I will support it since I'm a delegate.

[Buffett and Colbert]

Umm...What?

This doesn't even do much of anything, kind sir.

[Krioval]

Umm...What?

This doesn't even do much of anything, kind sir.

The focus of the proposal, Your Excellency, is to standardize currency exchange, and also to prevent taxation of said exchanges. If this is not being adequately communicated, we would definitely be interested in hearing ways to better craft our message.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Charlotte Ryberg]

I have to point out that in some member states their currency is closed, this means that the local currency of that country cannot be exported. Also, some travellers cheque issuers have to charge commission for administration and costs for issuing cheques.

[Krioval]

I have to point out that in some member states their currency is closed, this means that the local currency of that country cannot be exported. Also, some travellers cheque issuers have to charge commission for administration and costs for issuing cheques.

To address the first point, nothing would restrict the "reconversion" of currency to a form that could be exported, including any foreign currency or even a commodity such as a precious metal. I suppose that this proposal would encourage the opening of a nation's currency to exportation, but I'm not sure the proposal should address that directly. For administrative costs, I would think that the cost would not be for converting currencies, but for issuing the traveler's cheques. In essence, the traveler is paying for *security* rather than for the conversion. Also, this proposal would prohibit national governments from collecting taxes on currency conversion. Companies could still charge for credit transactions and the like, though an individual could go to a banking institution if this proposal became law, and exchange cash for cash without paying for the privilege.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Glen-Rhodes]

I am never a fan of these outright bans, whether they be bans on trade tariffs or bans on currency trade taxation. They always assume that the argument is straight-forward, when in all situations there are the good and the bad.

I addressed this problem while debating the repeal of the World Assembly Economic Union, which banned any and all protectionist devices without so much as a thought to whether or not they harm international trade. I had hoped that the Food Welfare Act's trade clauses might be used as a basis for further international trade issues, specifically regarding the use of taxes, tariffs, and other protectionist devices.

In the Food Welfare Act, the International Trade Administration -- and I would wonder whether or not you might want to utilize this administration in your own proposal, rather than creating a separate committee -- "gradually reduces protectionist ... devices" only if they can be shown to "have the potential to severely harm international food trade". Similarly, the World Assembly Exchange Committee (or the International Trade Administration, if you so choose to take advantage of them) should, in my opinion, be able to regulate currency exchange taxes only if it can be shown that the tax has the potential to severely harm the international currency exchange markets.

It's a compromise that leaves both sides happy -- the free trade clans keep their free trade wherever it is useful, and the developing nations that rely on fair trade principles can utilize them until the time comes where such principles are genuinely harmful to international trade.

[float=left]Dr. Bradford William Castro

Ambassador-at-Large,
Permanent Chief of Mission for World Assembly affairs,
the Commonwealth of Glen-Rhodes[/float][float=right][/float]

[Krioval]

I am never a fan of these outright bans, whether they be bans on trade tariffs or bans on currency trade taxation. They always assume that the argument is straight-forward, when in all situations there are the good and the bad.

In the case of taxing currency conversions, what does Your Excellency see as a negative impact? The Great Chiefdom is attempting to standardize a system of trade by eliminating one very specific and minor aspect of economic protectionism. In fact, we are attempting to very narrowly define this proposal to leave most forms of protectionism to the discretion of individual nations.

I addressed this problem while debating the repeal of the World Assembly Economic Union, which banned any and all protectionist devices without so much as a thought to whether or not they harm international trade. I had hoped that the Food Welfare Act's trade clauses might be used as a basis for further international trade issues, specifically regarding the use of taxes, tariffs, and other protectionist devices.

Unfortunately, it is the finding of this institution that proposals should not reference past resolutions because those resolutions may someday be repealed.

In the Food Welfare Act, the International Trade Administration -- and I would wonder whether or not you might want to utilize this administration in your own proposal, rather than creating a separate committee -- "gradually reduces protectionist ... devices" only if they can be shown to "have the potential to severely harm international food trade". Similarly, the World Assembly Exchange Committee (or the International Trade Administration, if you so choose to take advantage of them) should, in my opinion, be able to regulate currency exchange taxes only if it can be shown that the tax has the potential to severely harm the international currency exchange markets.

The Great Chiefdom would ordinarily agree with such a suggestion, except that this proposal expressly is attempting to open international markets, whereas the Food Welfare Act is attempting to promote fairness within the market. Krioval finds that both types of resolutions are necessary and proper to ensure the prosperity of WA members.

It's a compromise that leaves both sides happy -- the free trade clans keep their free trade wherever it is useful, and the developing nations that rely on fair trade principles can utilize them until the time comes where such principles are genuinely harmful to international trade.

How would developing nations be seriously impacted by this proposal? If they choose to engage in protectionism, that is fine. This proposal would stimulate industrial development within developing nations - industrial development that would involve hiring local workers to manufacture products or provide services within that nation. It would even allow an international non-profit agency to buy (and sell, where appropriate) products and services without having to pay a special tax just to participate in the local economy.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Glen-Rhodes]

In the case of taxing currency conversions, what does Your Excellency see as a negative impact? The Great Chiefdom is attempting to standardize a system of trade by eliminating one very specific and minor aspect of economic protectionism. In fact, we are attempting to very narrowly define this proposal to leave most forms of protectionism to the discretion of individual nations.

You've already discussed the negative impacts of currency exchange taxes. I'm concerned with the benefits. For wealthy nations, even a 0.005% tax can generate a large source of income. For developing nations, it may not be a generous source, but a source nonetheless, if they so choose to impose a tax. No nation should be denied the power to tax, unless such taxation has the potential to severely harm international trade. A sweeping ban doesn't address the complexities of the issue: one nation's tax might harm, an other nation's might not.

Unfortunately, it is the finding of this institution that proposals should not reference past resolutions because those resolutions may someday be repealed.

Of course the proposal shouldn't mention the Food Welfare Act. But there are no rules against copying its language.

The Great Chiefdom would ordinarily agree with such a suggestion, except that this proposal expressly is attempting to open international markets, whereas the Food Welfare Act is attempting to promote fairness within the market. Krioval finds that both types of resolutions are necessary and proper to ensure the prosperity of WA members.

I don't see any reason why a resolution cannot do both. The notion that it's either free trade or fair trade is extremely outdated. There is a middle-ground.

How would developing nations be seriously impacted by this proposal? If they choose to engage in protectionism, that is fine. This proposal would stimulate industrial development within developing nations - industrial development that would involve hiring local workers to manufacture products or provide services within that nation. It would even allow an international non-profit agency to buy (and sell, where appropriate) products and services without having to pay a special tax just to participate in the local economy.

It would also rule out a possible source of income, as I said above. I'm not concerned with this single proposal. I don't think that the Currency Conversion and Taxation Act is going to cripple struggling nations and end fair trade. What I'm concerned with is that if the compromise between free trade and fair trade is not upheld here, as it was upheld in the Food Welfare Act, then where else might it be ignored? Where else might the free trade advocates diminish any possibility of hope for struggling nations? Any and all trade resolutions ought to work towards free and fair trade.

[float=left]Dr. Bradford William Castro

Ambassador-at-Large,
Permanent Chief of Mission for World Assembly affairs,
the Commonwealth of Glen-Rhodes[/float][float=right][/float]

[Krioval]

You've already discussed the negative impacts of currency exchange taxes. I'm concerned with the benefits. For wealthy nations, even a 0.005% tax can generate a large source of income. For developing nations, it may not be a generous source, but a source nonetheless, if they so choose to impose a tax. No nation should be denied the power to tax, unless such taxation has the potential to severely harm international trade. A sweeping ban doesn't address the complexities of the issue: one nation's tax might harm, an other nation's might not.

Thus an exchange tax is primarily used as a revenue stream by industrialized nations, in which they are operating against the principle of free trade for which this proposal stands. The thing is, that is a silly way to discourage multinational businesses that need to import or export goods (or even services) from multiple nations. Even very small percentages add up to a lot of money; Your Excellency has said so directly. The Great Chiefdom sees no reason why certain kinds of businesses, including both for-profit and non-profit, should be arbitrarily singled out for this type of tax.

Of course the proposal shouldn't mention the Food Welfare Act. But there are no rules against copying its language.

We decided to begin with the bare minimum of language because the Great Chiefdom is no stranger to the evolution of proposals - most of the time the word count rises. We have no objection to the language in the FWA, except that we are attempting to avoid having a committee decide on taxation. We would rather abolish this type of tax altogether.

I don't see any reason why a resolution cannot do both. The notion that it's either free trade or fair trade is extremely outdated. There is a middle-ground.

It is our opinion that this resolution is sufficiently narrow in focus that it already occupies a middle ground. It leaves perfectly intact any protective tariffs that a nation might want to impose on imports, much as the Great Chiefdom feels that such measures are distasteful. We feel that any proposal to address those aspects of trade should be handled separately.

It would also rule out a possible source of income, as I said above. I'm not concerned with this single proposal. I don't think that the Currency Conversion and Taxation Act is going to cripple struggling nations and end fair trade. What I'm concerned with is that if the compromise between free trade and fair trade is not upheld here, as it was upheld in the Food Welfare Act, then where else might it be ignored? Where else might the free trade advocates diminish any possibility of hope for struggling nations? Any and all trade resolutions ought to work towards free and fair trade.

The primary issue here, then, is that the Great Chiefdom does not currently wish to add more bureaucratic language and oversight to such a small aspect of trade. We feel that the WA has plenty of safeguards, a veritable wall of "SUGGESTS", "RECOMMENDS", and even "STRONGLY RECOMMENDS". This proposal can stand to have a single direct impact on trade without undermining the principles of free and fair trade. This proposal does so, in our finding.

Are there any other concerns that Your Excellency has regarding the text and formatting of this proposal? We may ultimately not agree on the issue of the taxation ban, but I see no reason to not solicit any other suggestions that might be brought before the Great Chiefdom.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Tanara]

My only comment is is that my nation charges to exchange currenies, but that is simply to cover the administrative costs. You have to have personel doing the currency handling and paperwork handling and their salaries have to be paid. You then have to deal with the issuing naion and that takes personel etc as well- all of it ends costing time ( which has value ) and actual paid out monies ( salaries, materials cost etal )

So whilel it is not a tax - and my nation is not making a profit on it - it is a necesssary cost placed on those wishing to exchange currency to cover the cost of providing them with the ability to get their funds exchanged.

[Krioval]

My only comment is is that my nation charges to exchange currenies, but that is simply to cover the administrative costs. You have to have personel doing the currency handling and paperwork handling and their salaries have to be paid. You then have to deal with the issuing naion and that takes personel etc as well- all of it ends costing time ( which has value ) and actual paid out monies ( salaries, materials cost etal )

So whilel it is not a tax - and my nation is not making a profit on it - it is a necesssary cost placed on those wishing to exchange currency to cover the cost of providing them with the ability to get their funds exchanged.

Currently, the proposal would not prohibit the recovery of administrative costs. It is meant to prevent a nation taking advantage of the need to convert between currencies as a dedicated revenue stream, which the Great Chiefdom feels stifles international trade. To give a brief example, banking institutions will convert currencies free of charge for account holders, and they charge a flat rate to convert for others. If the transacting agency is a national government, there is no reason to prohibit this fee so long as it is directly coupled to the cost of the transaction and is not designed to result in profit.

I will consider the appropriate language to add to this proposal to clarify this point as soon as possible. Suggestions are welcome.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Kelssek]

It strikes us that the proposer seems to regard international trade as a desirable goal in and of itself. We would disagree. We see international trade as a useful tool by which to achieve better living standards, but if not properly used, it can fail to achieve that goal or be counterproductive. Such is the socioeconomic balancing act that all nations engage in.

That said we feel rather apathetic about this proposal. We do not feel that extra costs for businesses in their foreign dealings are necessarily a subject of great international concern, and we do not wish to be seen as endorsing capitalist ideology. However, as our government does not levy such a tax, whether this proposal becomes a resolution or not really does not matter to us. My initial impression is that Kelssek would heartily abstain from the vote.

I would, however, point out a potentially problematic ambiguity in the drafting:

FURTHER REQUIRES that neither the World Assembly nor its members impose any tax or penalty on transactions in which currencies are converted from one to another.

It would seem that this may inadvertently ban taxes not related to the exchange of currencies. For instance, should I be visiting a foreign country and make a charge onto my bankcard there, this would be a transaction involving a currency conversion, and this provision would seem to say that any applicable sales taxes could not be levied simply because a currency exchange was involved.

I would suggest that this be made more specific, perhaps changing "transactions in which..." to simply "currency exchange".

[OOC: This is actually what happens, with credit and debit cards. The bank converts currencies from the home currency into the foreign currency, paying the merchant in the foreign currency and charging you in the equivalent home currency.]

[Krioval]

It strikes us that the proposer seems to regard international trade as a desirable goal in and of itself. We would disagree. We see international trade as a useful tool by which to achieve better living standards, but if not properly used, it can fail to achieve that goal or be counterproductive. Such is the socioeconomic balancing act that all nations engage in.

That said we feel rather apathetic about this proposal. We do not feel that extra costs for businesses in their foreign dealings are necessarily a subject of great international concern, and we do not wish to be seen as endorsing capitalist ideology. However, as our government does not levy such a tax, whether this proposal becomes a resolution or not really does not matter to us. My initial impression is that Kelssek would heartily abstain from the vote.

I thank Your Excellency for this contribution. The Great Chiefdom finds that international trade often leads to economic prosperity, though we would freely admit that any system taken to excess tends to cause more problems than solutions. This would definitely be true of eliminating barriers to trade; too much emphasis on the trade and too little on the people involved in the trade is a bad thing.

We are also open to creating a proposal that would simply monitor and report currency exchanges if the feelings of most WA commentators tended toward that direction.

I would, however, point out a potentially problematic ambiguity in the drafting:

FURTHER REQUIRES that neither the World Assembly nor its members impose any tax or penalty on transactions in which currencies are converted from one to another.

It would seem that this may inadvertently ban taxes not related to the exchange of currencies. For instance, should I be visiting a foreign country and make a charge onto my bankcard there, this would be a transaction involving a currency conversion, and this provision would seem to say that any applicable sales taxes could not be levied simply because a currency exchange was involved.

I would suggest that this be made more specific, perhaps changing "transactions in which..." to simply "currency exchange".

[OOC: This is actually what happens, with credit and debit cards. The bank converts currencies from the home currency into the foreign currency, paying the merchant in the foreign currency and charging you in the equivalent home currency.]

[/quote]

I will see that this change is made immediately. Thank you for the suggestion.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Bears Armed]

OOC_

Major loophole: If a nation's government controls the only agency through which such transactions can legally occur within that country then it can simply raise its commission on them to cover the lost revenue from the abolished taxes...
... and can you actually prevent the existence of such 'state' monopolies without falling foul of the "No Ideological Bans" rule?

[Glen-Rhodes]

Thus an exchange tax is primarily used as a revenue stream by industrialized nations, in which they are operating against the principle of free trade for which this proposal stands. The thing is, that is a silly way to discourage multinational businesses that need to import or export goods (or even services) from multiple nations. Even very small percentages add up to a lot of money; Your Excellency has said so directly. The Great Chiefdom sees no reason why certain kinds of businesses, including both for-profit and non-profit, should be arbitrarily singled out for this type of tax.

A 0.005% exchange tax is almost negligible to currency exchange firms and multinational corporations. It would neither encourage nor discourage multinational operations, while it would have only a positive net impact on government revenue. I don't see where you have any base to call such a tax silly. Indeed, you seem to be taking the same old tired free trade agenda that was so evidently rejected during the repeal of the World Assembly Economic Union. Free trade is not inherently good trade.

We decided to begin with the bare minimum of language because the Great Chiefdom is no stranger to the evolution of proposals - most of the time the word count rises. We have no objection to the language in the FWA, except that we are attempting to avoid having a committee decide on taxation. We would rather abolish this type of tax altogether.

You already have a committee monitoring exchange rates. Where is the great leap in monitoring tax rates? A committee, whether it be the World Assembly Exchange Committee or the International Trade Administration, would not need the authority to set individual tax rates, but only to deny their existence where they can severely harm international trade. You seem to have no qualms with doing the latter in a broad stroke. Why not in a more refined way, so that you aren't doing harm to where a tax is doing good?

It is our opinion that this resolution is sufficiently narrow in focus that it already occupies a middle ground. It leaves perfectly intact any protective tariffs that a nation might want to impose on imports, much as the Great Chiefdom feels that such measures are distasteful. We feel that any proposal to address those aspects of trade should be handled separately. ...

The primary issue here, then, is that the Great Chiefdom does not currently wish to add more bureaucratic language and oversight to such a small aspect of trade. We feel that the WA has plenty of safeguards, a veritable wall of "SUGGESTS", "RECOMMENDS", and even "STRONGLY RECOMMENDS". This proposal can stand to have a single direct impact on trade without undermining the principles of free and fair trade. This proposal does so, in our finding.

If it's such a small aspect of trade, why are you asking the World Assembly to regulate it in any way, shape, or form? I'm beginning to suspect that you aren't being entirely honest, here. If it's important enough for the World Assembly to regulate, then it's important enough to institute fair regulation thereof. A sweeping ban is anything but fair regulation.

Are there any other concerns that Your Excellency has regarding the text and formatting of this proposal? We may ultimately not agree on the issue of the taxation ban, but I see no reason to not solicit any other suggestions that might be brought before the Great Chiefdom.

The taxation ban is my only concern. Saying those words, "taxation ban", makes me wonder if the clause itself is in conflict with WAR#17's protection of domestic taxation policies. The debate over whether or not an exchange tax is a domestic tax would have to happen, to settle that claim.

[float=left]Dr. Bradford William Castro

Ambassador-at-Large,
Permanent Chief of Mission for World Assembly affairs,
the Commonwealth of Glen-Rhodes[/float][float=right][/float]

[Krioval]

OOC_

Major loophole: If a nation's government controls the only agency through which such transactions can legally occur within that country then it can simply raise its commission on them to cover the lost revenue from the abolished taxes...
... and can you actually prevent the existence of such 'state' monopolies without falling foul of the "No Ideological Bans" rule?

OOC: I'm planning to close that loophole by adding text allowing the recovery of administrative costs, but that they cannot profit from the fee. One way could be to cause the WAEC to fund the administrative costs directly. The other "patch" could be to allow the use of any WA nation's currency in any other WA nation directly, and task the WAEC with disseminating the exchange rates as appropriate for each WA member. That would shift the burden of administration to the committee and away from the governments.

[Krioval]

A 0.005% exchange tax is almost negligible to currency exchange firms and multinational corporations. It would neither encourage nor discourage multinational operations, while it would have only a positive net impact on government revenue. I don't see where you have any base to call such a tax silly. Indeed, you seem to be taking the same old tired free trade agenda that was so evidently rejected during the repeal of the World Assembly Economic Union. Free trade is not inherently good trade.

Clearly the issue is with the concept of free trade. The Great Chiefdom feels that the opening of international markets, when done transparently and in good faith, leads to prosperity. So, yes, Krioval has an agenda of sorts. But we're not about to hide behind a wall of words to obscure and deflect from it. If Your Excellency has a problem with free trade for its own sake, even in this form, then so be it. We would then ask that Your Excellency offers constructive criticisms on the remainder of the proposal; we will note concerns that have been raised, and if needed, we may make changes later that make Your Excellency more comfortable with the final product.

You already have a committee monitoring exchange rates. Where is the great leap in monitoring tax rates? A committee, whether it be the World Assembly Exchange Committee or the International Trade Administration, would not need the authority to set individual tax rates, but only to deny their existence where they can severely harm international trade. You seem to have no qualms with doing the latter in a broad stroke. Why not in a more refined way, so that you aren't doing harm to where a tax is doing good?

Basically, the Great Chiefdom is attempting to do one particular thing with this resolution. We want to make it such that the only issue when dealing between two (or more) countries is the strength of their currencies relative to one another. A tax levied by one nation against another creates an inequality in this exchange. Krioval considers this to be unfair and seeks to rectify it with this proposal.

If it's such a small aspect of trade, why are you asking the World Assembly to regulate it in any way, shape, or form? I'm beginning to suspect that you aren't being entirely honest, here. If it's important enough for the World Assembly to regulate, then it's important enough to institute fair regulation thereof. A sweeping ban is anything but fair regulation.

Nice swipe against our integrity there, Your Excellency. The Great Chiefdom has pretty much put it all out on the table. This proposal is about fairness. It is about knowing what one's money is worth regardless of one's location, non-WA members notwithstanding. This "sweeping ban" is needed to make trade both freer and fairer. Krioval is open to supporting additional proposals that would protect social equality, but this proposal is dedicated to principles of trade.

The taxation ban is my only concern. Saying those words, "taxation ban", makes me wonder if the clause itself is in conflict with WAR#17's protection of domestic taxation policies. The debate over whether or not an exchange tax is a domestic tax would have to happen, to settle that claim.

It is the argument of the Great Chiefdom that this tax is international in nature, but we will seek a ruling from the advisory body of the World Assembly prior to submission.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Glen-Rhodes]

Basically, the Great Chiefdom is attempting to do one particular thing with this resolution. We want to make it such that the only issue when dealing between two (or more) countries is the strength of their currencies relative to one another. A tax levied by one nation against another creates an inequality in this exchange. Krioval considers this to be unfair and seeks to rectify it with this proposal.

Unfair to whom? The poor country that stands to gain, or the rich country that stands to lose?

[float=left]Dr. Bradford William Castro

Ambassador-at-Large,
Permanent Chief of Mission for World Assembly affairs,
the Commonwealth of Glen-Rhodes[/float][float=right][/float]

[Krioval]

Unfair to whom? The poor country that stands to gain, or the rich country that stands to lose?

Unfair to all nations, Your Excellency. The Great Chiefdom believes strongly that developing economies would benefit far more greatly from a standardized system of trade than from an exchange tax, especially if that tax is 0.005%. We find that slinging accusations as to our ulterior motives is extremely non-productive. Krioval could just as easily accuse detractors from this proposal of stifling developing nations' economies in order to secure political favor with their governments later. Naturally, that would be tarring many nations unfairly with a wide brush; we will abstain from such cheap political stunts.

[Lord] Ambassador Darvek Tyvok
Great Chiefdom of Krioval

[Glen-Rhodes]

Unfair to all nations, Your Excellency. The Great Chiefdom believes strongly that developing economies would benefit far more greatly from a standardized system of trade than from an exchange tax, especially if that tax is 0.005%. We find that slinging accusations as to our ulterior motives is extremely non-productive. Krioval could just as easily accuse detractors from this proposal of stifling developing nations' economies in order to secure political favor with their governments later. Naturally, that would be tarring many nations unfairly with a wide brush; we will abstain from such cheap political stunts.

Is it the World Assembly's responsibility to dictate developing nations' economic policies, or to ensure that the economic practices of all nations do not harm the greater international economy? More importantly, does the Great Chiefdom have the moral authority to dictate that this single economic policy is what's best for all nations?

It simply boils down to this: if a nation chooses to tax exchanges, and such taxation does not harm trade, then why ban the source of revenue? This is what I do not understand. "We're banning it because it's harmful." "What if it isn't? What if, in some circumstances, it's beneficial?" "We're banning it anyways."

A perfect compromise exists, yet the Lord Ambassador is bent to the extreme of pure free trade.

PROHIBITS any World Assembly member from imposing any tax or penalty on currency exchange, if such a tax or penalty has the potential to severely harm international trade.

This small change in language prevents a negative impact, yet allows a positive impact. It is, in all sense of the phrase, the best of both worlds. In a clear and concise argument, that isn't founded in pure economic ideology, could you provide an answer as to why you prefer no to do it this way?

[float=left]Dr. Bradford William Castro

Ambassador-at-Large,
Permanent Chief of Mission for World Assembly affairs,
the Commonwealth of Glen-Rhodes[/float][float=right][/float]