[Draft] World Assembly Agreement on Trade

[Jarish Inyo]

Copying the failing EU is not a good idea. If the EU allowed tariffs between its members, then it wouldn't have one bankrupted nation and one on the verge. Or had a nation leave it.

[Sciongrad]

Copying the failing EU is not a good idea. If the EU allowed tariffs between its members, then it wouldn't have one bankrupted nation and one on the verge. Or had a nation leave it.

OOC: That doesn't make any sense. The reason that certain EU nations are having budgetary issues has absolutely nothing to do with trade. The EU has a unified monetary system but not a unified fiscal system, which contributed to the Euro crisis a few years back. The reason a few states like Portugal and Greece are struggling is because the troika is instituting harsh austerity measures on them.

[Jarish Inyo]

The EU has never had an unified monetary system. Many nations of the EU do not the euro. Greece could use the funds raised by tariffs to bolster its economy after it's economical crisis that started in 2009. But it can not enact said tariffs because of the EU.

[Sciongrad]

The EU has never had an unified monetary system. Many nations of the EU do not the euro. Greece could use the funds raised by tariffs to bolster its economy after it's economical crisis that started in 2009. But it can not enact said tariffs because of the EU.

OOC: The EU has a unified monetary system -- the Eurozone -- which comprises 19 of the 28 EU member states and is administered by the Eurosystem. The reason Potugal, Greece, Italy, Spain, and Ireland all suffered tremendously during the European debt crisis was because the Eurozone had a unified monetary system but not a unified fiscal system. (Recommended Reading).

Raising tariffs would also not have resulted in net revenue for Greece -- while it would raise revenue from imported goods, it would make goods less expensive, drive down domestic demand, and result in a net decrease in wealth (see: dead weight loss). Even if it did raise revenue, Greece's debt crisis is so profound that it would be impossible to raise even a fraction of the sum needed to pay of their debt through tariffs alone.

[Jarish Inyo]

A third of the EU members have not and do not use the euro. That means that the EU has never had an unified monetary system. Your own recommended points out reasons for not accepting your proposal. Tariffs would help Greece, Cyprus, Italy, Spain, Portugal, and Ireland with needed funding to help their economies. It would help most of them pay back what they have borrowed from the European Central Bank and other European banks.

If tariffs would would make goods less expensive, that is a good thing for consumers. It would not drive down domestic demand. Tariffs do not drive down domestic demand or in a net decrease in wealth. Tariffs can work and avoid deadweight loss, thus providing needed funding.

One can not claim a system is working when a fifth of of member nations are in an economical crisis, a third of membership doesn't use the euro, and one has withdrawn from the EU.

[Sciongrad]

A third of the EU members have not and do not use the euro. That means that the EU has never had an unified monetary system. Your own recommended points out reasons for not accepting your proposal. Tariffs would help Greece, Cyprus, Italy, Spain, Portugal, and Ireland with needed funding to help their economies. It would help most of them pay back what they have borrowed from the European Central Bank and other European banks.

If tariffs would would make goods less expensive, that is a good thing for consumers. It would not drive down domestic demand. Tariffs do not drive down domestic demand or in a net decrease in wealth. Tariffs can work and avoid deadweight loss, thus providing needed funding.

One can not claim a system is working when a fifth of of member nations are in an economical crisis, a third of membership doesn't use the euro, and one has withdrawn from the EU.

1. Every single country that suffered in the Euro Debt Crisis -- Portugal, Spain, Italy, Cyprus, Greece, Ireland -- was part of the Eurozone. The reason the Eurozone crisis happened is literally because the Eurozone has a single currency and monetary system without a unified fiscal system. That's, like, not an argument, that's actually what happened. Not everything is spun to fit an ideological agenda. And the recommended source doesn't advocate for totally nixing the euro, it argues that a unified currency cannot exist sustainably without a unified monetary and fiscal system.

2. That was a typo. I so obviously meant that tariffs increase the price of goods and the fact that you just went along with it suggests to me you don't even know what you're talking about. A tariff has to raise the price of domestic goods. That's definitionally what they do.

3. You're talking about two totally different things. The European Union has a single market which embraces the four freedoms: movement of goods, services, capital, and labor. That is totally separate from the Eurozone Crisis, which was caused not by the single market but because the member nations using the Euro did not have a coherent and unified fiscal policy. Implementing tariffs would neither resolve the underlying issues that caused the Eurozone crisis nor would it serve any remedial function because tariffs increase prices, lower demand, and inhibit growth.

[Thyerata]

A third of the EU members have not and do not use the euro. That means that the EU has never had an unified monetary system. Your own recommended points out reasons for not accepting your proposal. Tariffs would help Greece, Cyprus, Italy, Spain, Portugal, and Ireland with needed funding to help their economies. It would help most of them pay back what they have borrowed from the European Central Bank and other European banks.

If tariffs would would make goods less expensive, that is a good thing for consumers. It would not drive down domestic demand. Tariffs do not drive down domestic demand or in a net decrease in wealth. Tariffs can work and avoid deadweight loss, thus providing needed funding.

One can not claim a system is working when a fifth of of member nations are in an economical crisis, a third of membership doesn't use the euro, and one has withdrawn from the EU.

(1) economic crises occurred because states let their sovereign debt get out of control. As a result, the eu is busily creating a more structured financial mechanism to avoid such crises in the future
(2) the member states who do not use the euro do not use it because of opt outs (Britain and Denmark), or because they don't meet the convergence criteria. Those members who do not have opt outs, but who do not use the euro, are required to do so when they meet the convergence criteria
(3) the eu has, as recently as last month, adopted a "two speed" approach to integrating. That means that those states wishing to fully integrate may do so, while those who are less interested in full integration, but are still actively contributing to the eu, will not be left behind
(4) Article 50TEU provides that the uk (my country) will still be bound by eu law until two years after that article is invoked, at which point eu law automatically no longer applies, or until an agreement is signed, whichever comes first. Until either of those things occur, the uk is still very much a part of the eu

[Jarish Inyo]

1) The EU is not busily creating a more structured financial mechanism to avoid such crises in the future. It is currently using things like the European Financial Stability Fund and the European Stability Mechanism to give loans to the nations that are in economical crisis.
2) Incorrect. of the nations not using the euro, one one is waiting referendum approval to switch. None of the other nations have adopted the euro as their official currency.

[Thyerata]

1) The EU is not busily creating a more structured financial mechanism to avoid such crises in the future. It is currently using things like the European Financial Stability Fund and the European Stability Mechanism to give loans to the nations that are in economical crisis.
2) Incorrect. of the nations not using the euro, one one is waiting referendum approval to switch. None of the other nations have adopted the euro as their official currency.

Please give me some credit. I do a law degree. This is on my syllabus, and I have an exam on it in 3 weeks' time, so I think I know a fair amount about how the eu functions, and especially about the single market

[Jarish Inyo]

Because you have a law degree doesn't mean you know how the EU functions, and especially about the single market. Yes, it could be said that those nations let their sovereign debt get out of control. But it can also be said that because of EU laws and regulations, those nations could not take actions that would have helped said nations.

Also, according to Article 50 TEU, the UK is not bound to EU laws for to years after it is invoked. It is that way if your government doesn't issue a date of entry into force of the withdrawal agreement. So the sooner Prime Minister May and parliament does so, then no more EU laws in the UK.

[Bananaistan]

A third of the EU members have not and do not use the euro. That means that the EU has never had an unified monetary system. Your own recommended points out reasons for not accepting your proposal. Tariffs would help Greece, Cyprus, Italy, Spain, Portugal, and Ireland with needed funding to help their economies. It would help most of them pay back what they have borrowed from the European Central Bank and other European banks.

If tariffs would would make goods less expensive, that is a good thing for consumers. It would not drive down domestic demand. Tariffs do not drive down domestic demand or in a net decrease in wealth. Tariffs can work and avoid deadweight loss, thus providing needed funding.

One can not claim a system is working when a fifth of of member nations are in an economical crisis, a third of membership doesn't use the euro, and one has withdrawn from the EU.

I'm calling BS on this. I can't speak to the intricacies of the economies of the other nations, but as regards to Ireland, tariffs would completely tank the Irish economy considering the huge number of multinational companies who use Ireland as their European base and would be a complete reversal of the entire economic and social strategy underpinning Irish society and economy since the late 1950s.

And pointing to one single factor and saying that this caused the economic crisis is incredibly simplistic and wrong. In any case, I don't think anyone has ever seriously suggested that Irish membership of the EU and the attendant lack of a right to set tariffs independently caused the economic crisis in Ireland. Yes, had the domestic central bank had control of interest rates during the later years of the Celtic tiger, they may well have cooled the economy somewhat, but the politicians had many fiscal and regulatory tools available to them which they refused to use, particularly from 2004 on after Charlie McCreevy was shafted and sent out to pasture as a Commissioner. However, this has nothing to do with tariffs.

[Jarish Inyo]

Ireland's economy is already in the tank. And tariffs would boost Ireland's economy. Ireland did have tariffs before the EU made it give them up. And I'm betting number of multinational companies were in Ireland when there were tariffs. So tariffs wouldn't be complete reversal of the entire economic and social strategy underpinning Irish society and economy since the late 1950s.

The EU central bank controls those fiscal and regulatory tools you are referring to. And a one size fits all regulatory system does not work. It is proving that when a fifth of the EU's members are currently experiencing economical crisis. A nation should handle its own economical policies. Not an international organization. The three largest economies in the world have tariffs.

[Bananaistan]

Ireland's economy is already in the tank. And tariffs would boost Ireland's economy. Ireland did have tariffs before the EU made it give them up. And I'm betting number of multinational companies were in Ireland when there were tariffs. So tariffs wouldn't be complete reversal of the entire economic and social strategy underpinning Irish society and economy since the late 1950s.

The EU central bank controls those fiscal and regulatory tools you are referring to. And a one size fits all regulatory system does not work. It is proving that when a fifth of the EU's members are currently experiencing economical crisis. A nation should handle its own economical policies. Not an international organization. The three largest economies in the world have tariffs.

This is all wrong.

1) Ireland's economy is not currently in the tank. By any reliable measure, we turned the corner on the recession from ~ 2013 or 2014 onwards.

2) The EU didn't make Ireland give up anything. Ireland freely chose to join the EU in full knowledge of what it was about and this was the logical decision to follow on from Irelands free market policies in place from the 1950s onwards when the government made the explicit decision to leave behind protectionism and move towards free trade without tariffs. It's also worth adding that all EU members have a say in setting the high level policy. It's not like the EU just hands down diktats that member states have no input to.

3) Before this liberalisation, there were virtually no multinationals in Ireland precisely because of protectionism. It was only after this was dropped and the tariffs were reduced when Ireland signed GATT in 1960 , and other tax changes in the 1950s took effect, that we attracted any significant international investment.

So tariffs would in fact be a complete about turn.

4) From 1999 (introduction of the Euro) the ECB controlled only some of the regulatory tools and none of the fiscal tools. It still controls none of the fiscal tool but has more of the regulatory tools. The ECB has and has never had any control over fiscal policy. When the Irish economy was over heating in the mid 2000s, the government did not have to continuously cut taxes in every budget from 2005 to 2008 which contributed significantly to the bubble. It could have kept the course of the previous years (2001 to 2004) when there were no tax cuts. And this is just one example of the fiscal policy the government could have used to rein in the economy.

Regarding regulatory powers, no European institution would have prevented any Irish institution from prohibiting 100%+ mortgages.

5) Whatever about how the regulatory system and the EU works in general, I don't think there's any doubt that membership of the EU and the Euro has been hugely beneficial to Ireland, and at the least, membership of the EU has been hugely beneficial to Greece, Italy et al. Though I agree that there is an argument about how a common currency can't provide its highest potential benefits without a greater degree of central control over fiscal policy. It's a shame that there's no appetite in Europe for the sort of political and economic union that saw the USA enjoy incredible economic success for most of its existence.

[Excidium Planetis]

OOC
I'm fairly sure that, unless we're changing the rules, proposals can't include expiry dates legally: Once a resolution passes, it's in effect unless & until repealed... Right?

OOC: Is that a rule? Which rule would cover that? And even if a rule did cover that, this proposal doesn't include provisions with expiration dates. It requires member nations to come into compliance with its provisions within a certain time frame.

I don't think it's a rule, but I do think that Bears is concerned with future resolutions establishing certain tariffs that would expire by this resolutions' deadline. It might not be a contradiction of this resolution because it may or may not be ten years since this resolution called for a gradual reduction of tariffs.

[Sciongrad]

OOC: Is that a rule? Which rule would cover that? And even if a rule did cover that, this proposal doesn't include provisions with expiration dates. It requires member nations to come into compliance with its provisions within a certain time frame.

I don't think it's a rule, but I do think the Bears is concerned with future resolutions establishing certain tariffs that would expire by this resolutions' deadline. It might not be a contradiction of this resolution because it may or may not be twenty years since this resolution called for a gradual reduction of tariffs.

OOC: Oh that's actually a very interesting question. I'll have to think on this, because I want to say that should be illegal, but I'm not sure. It would be an easy fix, anyway, to simply write a clause blocking that type of thing.

[Bears Armed]

OOC

"Indeed, what of future proposals to impose or allow tariffs (or other protectionist devices)[/i] through General Assembly resolutions? Would those have to contain expiry dates so as not to contradict this proposed resolution, if their contents were not completely covered by the list of allowed exceptions here?"

"No, this proposal would foreclose the possibility of future resolutions permitting the discretionary use of protectionist devices outside of the exceptions provided here."

So it would definitely close off a large portion of the 'Protective Tariff's area-of-effect? I think that it needs actually to say so... and that we need a collective Secretariat opinion about whether that would leave enough of the area-of-effect available to be legal.

I'm fairly sure that, unless we're changing the rules, proposals can't include expiry dates legally: Once a resolution passes, it's in effect unless & until repealed... Right?

OOC: Is that a rule? Which rule would cover that?

Opinion based on memory of at least one past ruling (back on Jolt), on the OOC basis that as the stat effects don't go away without a repeal the legal effects shouldn't do so either. I suppose that might be seen as falling within 'Game Mechanics'.

And even if a rule did cover that, this proposal doesn't include provisions with expiration dates. It requires member nations to come into compliance with its provisions within a certain time frame.

If this propsoed resolution doesn't explicitly forbid the passage of new resolutions on the subject that aren't covered by its allowed exemptions then people could submit & pass them... but it might be argued that, in order not to contradict this proposed resolution, their effects would have to end within your 10-year deadline.

[Thyerata]

This entire post is OOC


I'm going to leave the preambulatory clauses as they are. No questions about them.

1. Promotes the exchange of goods, services, and capital between member nations

I understand what you're trying to do, but the free movement of goods, services and capital are all covered by three separate areas of EU law. For the sake of simplicity, I'm going to strike out references to "services and capital"...

1. Promotes the exchange of goods

2. Instructs the International Trade Agency to liaise with relevant officials from members nations in order to schedule the removal, within ten years, of all quotas, subsidies, tariffs and other protectionist devices on goods and services produced within member nations;

EU law is stricter than this. It doesn't allow for any transitional arrangements at all. The moment a state joins the Single Market, it is bound by its rules. I am going to assume that, somewhat like the European Commission, the International Trade Agency is an enforcement/supervision mechanism, so...

2. Instructs all member states to abolish all quotas, subsidies, tariffs and other protectionist measures with immediate effect, and instructs the International Trade Agency to enforce and supervise this abolition, and ensure that no Member State establishes any such protectionist devices, except where such devices are established as provided under the exceptions listed below

3. Mandates that member nations shall implement, in good faith, the agreements reached with the International Trade Agency within the aforementioned time frame;

I've effectively merged this into the new clause 2 above, so I would delete it. It also means that subsequent clauses need to be renumbered

3. Mandates that member nations shall implement, in good faith, the agreements reached with the International Trade Agency within the aforementioned time frame;

4. Permits members nations to temporarily implement protectionist devices on good and services produced within member nations if:

An unstable economic situation requires such protectionist devices to ensure the production of essential products,
The exporter of a given product is in violation of extant international legislation on human rights, environmental standards, or quality standards, provided such protectionist devices are assigned proportionally to all exporters that violate the aforementioned legislation,
To protect domestic industries from discriminatory protectionist devices implemented by other member nations, provided the protectionist devices by the former nation are reasonable and proportional to the discriminatory protection devices,
To stabilize or protect industries during times of economic crisis

The EU's exemptions to tariff-free trade are different to this. There are no exemptions to the prohibiton on border tariffs, and most of the exceptions listed above don't exist in EU law. There are some exceptions to other aspects of free movement of goods which I can import into this resolution, so...

3. Permits member states to impose protectionist devices where
a. it is in the public interest to impose such protectionist devices
b. the free trade in any good or goods may cause an unacceptable risk to public health, or the healt of native animals or plants
c. goods that would ordinarily be freely traded should not be exported because they are defined by national law as items of historical, artistic, archeological or other national importance, such that they should remain in the nation of origin

I'm leaving clause 5 (now clause 4) in place, since EU law does not touch on relationships betwen the Single Market and external countries.

[Thyerata]

"As a nation that relies on protectionist tariffs for our economy, there is no way Excidium Planetis can support this draft." Schultz states.

"Unless," Blackbourne interjects quickly, "You add in a clause that mandates nations engage in international trade with other member nations or requires nations to eliminate complete prohibition of trading, or skmething to that effect. I must admit I am not sure of the best way to do this, but Excidium Planetis will most certainly support this proposal if you can find a way to actively promote international trade, rather than passively promoting it in the first clause."

If I could take up Ambassador Blackbourne's point. I understand the Honourable Gentleman to be suggesting that he would happily support this proposal if there were a clause that mandated international trade among member nations. I would suggest that he considers this clause, which we have proposed after a comprehensive review and redrafting of this proposal...

Instructs all member states to abolish all quotas, subsidies, tariffs and other protectionist measures with immediate effect, and instructs the International Trade Agency to enforce and supervise this abolition, and ensure that no Member State establishes any such protectionist devices, except where such devices are established as provided under the exceptions listed below

Would this satisfy his preconditions?

[Sciongrad]

"The draft has been revised and I have incorporated the recommendations provided by the ambassador from Thyerata."

[Excidium Planetis]

Would this satisfy his preconditions?

"At the time, it would have. However, as the Imperium of Tinfect has withdrawn from the World Assembly to avoid compliance, the intended purpose behind my support for such a clause is now gone. Excidium Planetis does not support.

"However, I would suggest that the allowance for retaliatory tariffs on non-member nations be broadened to unlimited tariffs on non-member nations. Indeed, there should be mandated tariffs on non-member nations, in the interest of promoting a WA economic union, so to speak, and incentivizing nations to join the World Assembly rather than stay away from it."

[Sciongrad]

Would this satisfy his preconditions?

"At the time, it would have. However, as the Imperium of Tinfect has withdrawn from the World Assembly to avoid compliance, the intended purpose behind my support for such a clause is now gone. Excidium Planetis does not support.

"However, I would suggest that the allowance for retaliatory tariffs on non-member nations be broadened to unlimited tariffs on non-member nations. Indeed, there should be mandated tariffs on non-member nations, in the interest of promoting a WA economic union, so to speak, and incentivizing nations to join the World Assembly rather than stay away from it."

"I don't think this is unreasonable. I'll make some adjustments to the draft. Minus the mandatory tariff bit, of course."

[Bananaistan]

"Doesn't 3a sort of gut the whole thing?

"Also quotas are an essential part of our electoral system. If we can't have quotas, just how does someone win a seat in a PR-STV electoral system?"

- Ted

[Imperium Anglorum]

"Doesn't 3a sort of gut the whole thing?

OOC: I think that the changing of the burden of proof, if it were, regarding legislation, would certainly help in the creation of more economically sound policy, rather than some sort of default to self-defeating and economically disastrous protectionist measures. Such a clause also does not provide exemption for something like nationalism, non-provision of which helps the goals of peace.

"Also quotas are an essential part of our electoral system. If we can't have quotas, just how does someone win a seat in a PR-STV electoral system?"

Mortimer Wellesley, quizzically, 'Why would a nation with such an electoral system interpret the word "quota" to mean anything beyond the protectionist measure, when it is clearly contextualised as a protectionist measure?'

[Bananaistan]

"Doesn't 3a sort of gut the whole thing?

OOC: I think that the changing of the burden of proof, if it were, regarding legislation, would certainly help in the creation of more economically sound policy, rather than some sort of default to self-defeating and economically disastrous protectionist measures. Such a clause also does not provide exemption for something like nationalism, non-provision of which helps the goals of peace.

OOC: Just because it is a holy cow of the modern western economic thinking with its uber-rational robot actors who always act in their own self interest that even the slightest hint of restraining the economic freedoms of the rich and powerful will lead to the utter ruination of everyone, does not make it true in the real world outside the theories of the highly paid glorified fortune tellers.

"Also quotas are an essential part of our electoral system. If we can't have quotas, just how does someone win a seat in a PR-STV electoral system?"

Mortimer Wellesley, quizzically, 'Why would a nation with such an electoral system interpret the word "quota" to mean anything beyond the protectionist measure, when it is clearly contextualised as a protectionist measure?'

"I don't write the dictionary!"

[Christian Democrats]

3. Permits member states to impose protectionist devices where

1. it is in the public interest to impose such protectionist devices

I agree with the ambassador from Bananaistan. "Doesn't 3a sort of gut the whole thing?" All protectionists, except unabashed rent seekers, contend that protectionism is in the public interest. If they believed otherwise, they wouldn't be protectionists.