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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (113941)	9/7/2003 8:53:59 PM
From: Maurice Winn	Respond to of 281500

<Their markets get forced open, while their own exports, anything where they have a competitive advantage, faces high tariffs and massive subsidies to rich countries' producers.> Jacob, there's a logical fault in that almost universal misconception. The old balance of trade silliness. Money can only flow from people who have it. So, "forcing open a market", but refusing the locals to export, results in zero trade. You see, the locals have to get hold of some foreign currency before they can buy, which means getting it from tourists, or by exporting something. The only other means of paying for imports is to pay in local currency, which of course can only be spent locally. People in other countries won't accept payment in the local currency, unless it has become, like the Swiss Franc, a big, tough, currency in its own right. One way or another, trade balances up. Money flows from those who have it to those who want it and have something to sell. If the USA refuses to buy stuff from New Zealand, or puts huge tariffs on NZ products so little is sold, then the locals here can't buy USA products, such as CDMA phones, cars and stuff. We have to sell our steel to China and buy stuff from China. Which of course is very good for China and Americans are the losers. Which is not China's or New Zealand's problem. If Americans want to vote themselves poor, they are free to do so. Indians voted themselves poor for half a century. Mqurice