Practical cases of commercial liberalism
In IR202 and IR431, the discussion before the study break was centered on the theory of liberalism. In particular, the focus was on commercial liberalism, free trade and its six norms.
In IR431, we connected our discussion to human security. The specific category of interest was economic security. Trade is supported by a robust manufacturing sector, the sector provides remunerative work for many individuals.
The founder and CEO of FedEx supports the point above in his Wall Street Journal op-ed. He said that:
Heather Long from CNN Money said:
U.S. leaders are blaming China for the decrease of employment in the manufacturing sector. China is undercutting American workers with cheap labour. Cheap labour leads to low production cost and high returns. This makes China an economic haven for offshore outsourcing. The cost is less in China to produce suits and ties, then in the U.S.
From my understanding, this is one reason why we have this current trade war between U.S. and China. The U.S. imposed a tax on Chinese steel and aluminum. China responded on Monday with tariffs on a host of U.S. products, including apples, pork and ginseng.
In IR202, we used the letter from 'Concerned Consumer' on customs procedures. The writer must be a person with sound knowledge of economics. He called on the government to remove the import tariffs in the 2019 National Budget as the policy objective of introducing the tariffs remains unclear.
However, the government's explanatory memorandum for the Customs Tariff (2018 Budget)(Amendment) Bill 2017 gives some interesting information about the objectives. The bill proposed 4 major amendments, but I will focus on the first amendment since it is closely related to our discussion.
According to the explanatory memorandum, the government decided to suspend the tariff reduction policy because there were significant concerns raised by PNG manufacturers on the stiff competition coming from imported goods. The government in an effort to support local manufactures increased import tariffs on certain tariff items.
I went through the document but did not find diary products or milk. I wanted to validate what 'Concerned Consumer' said in paragraph four which led to our discussion on the price of Pauls Milk and Illimo Milk. Maybe the tariff on diary products is in another document.
Meat products like bacon and corned beef experienced an increase from 15% to 20%. That means the prices of imported bacon and corned beef has already increased. This is good for local manufacturers but a burden on consumers like you and I.
The final sentence, in the first amendment, outlined key objectives that are relevant to both manufacturers and consumers. The Bill is expected to reduce health related issues, enable local manufacturers to compete with imports, increase economic activities and create employment for our people.
I would like the government to increase the tariff on imported chicken from 15% to 20% as well. I do not really like the taste of imported chicken compared to chicken from local manufacturers like Niugini Tablebirds or Zenag. Not forgetting our local poultry farmers who also produce better tasting chicken.
After going through the four amendments, I think the objective of the change in the 2018 Budget is clear. The 'Concern Consumer' should read this document to reason out the changes.
The sub theory of commercial liberalism, its central tenet free trade with its six important norms help us to understand what is happening between China and the U.S. at the moment. In addition, PNG's decision to suspend the last phase of the tariff reduction policy in the 2018 Budget is another practical case.
In IR431, we connected our discussion to human security. The specific category of interest was economic security. Trade is supported by a robust manufacturing sector, the sector provides remunerative work for many individuals.
The founder and CEO of FedEx supports the point above in his Wall Street Journal op-ed. He said that:
"History shows that trade made easy, affordable and fast...always begets more trade, more jobs, more prosperity,"
Heather Long from CNN Money said:
"manufacturing remains a key part of the U.S.economy. Over 12.3 million Americans are employed in the industry."She also shared the data comparing manufacturing jobs in 1960 with today, to show the decrease in employment in the sector.
U.S. leaders are blaming China for the decrease of employment in the manufacturing sector. China is undercutting American workers with cheap labour. Cheap labour leads to low production cost and high returns. This makes China an economic haven for offshore outsourcing. The cost is less in China to produce suits and ties, then in the U.S.
From my understanding, this is one reason why we have this current trade war between U.S. and China. The U.S. imposed a tax on Chinese steel and aluminum. China responded on Monday with tariffs on a host of U.S. products, including apples, pork and ginseng.
In IR202, we used the letter from 'Concerned Consumer' on customs procedures. The writer must be a person with sound knowledge of economics. He called on the government to remove the import tariffs in the 2019 National Budget as the policy objective of introducing the tariffs remains unclear.
However, the government's explanatory memorandum for the Customs Tariff (2018 Budget)(Amendment) Bill 2017 gives some interesting information about the objectives. The bill proposed 4 major amendments, but I will focus on the first amendment since it is closely related to our discussion.
According to the explanatory memorandum, the government decided to suspend the tariff reduction policy because there were significant concerns raised by PNG manufacturers on the stiff competition coming from imported goods. The government in an effort to support local manufactures increased import tariffs on certain tariff items.
I went through the document but did not find diary products or milk. I wanted to validate what 'Concerned Consumer' said in paragraph four which led to our discussion on the price of Pauls Milk and Illimo Milk. Maybe the tariff on diary products is in another document.
Meat products like bacon and corned beef experienced an increase from 15% to 20%. That means the prices of imported bacon and corned beef has already increased. This is good for local manufacturers but a burden on consumers like you and I.
I would like the government to increase the tariff on imported chicken from 15% to 20% as well. I do not really like the taste of imported chicken compared to chicken from local manufacturers like Niugini Tablebirds or Zenag. Not forgetting our local poultry farmers who also produce better tasting chicken.
After going through the four amendments, I think the objective of the change in the 2018 Budget is clear. The 'Concern Consumer' should read this document to reason out the changes.
The sub theory of commercial liberalism, its central tenet free trade with its six important norms help us to understand what is happening between China and the U.S. at the moment. In addition, PNG's decision to suspend the last phase of the tariff reduction policy in the 2018 Budget is another practical case.
Hi Mr. Yegiora, could you please explain a little bit on how offshore outsourcing affects employment in another country. I have read the linked definition but I still don't get it.
ReplyDeleteThanks.
DeleteFor example, let us look at the Globe factory near the airport. At the moment the company provides jobs for many citizens. If the company wants to make more profit and incur less expense, then a country like China would be a good country to invest. That means management will close the factory and move everything to China where the cost of production is less. When they do this then all those who working for Globe will be unemployed.
Many companies around the world are moving to China because of the low cost of production. Factors like the currency value play a huge part. Since the Chinese yuan is very low, the cost is less to hire a person.