Tax, tariff and trade
Encyclopedia
The tax, tariff and trade laws of a political region, state
or trade bloc
determine which form of consumption
and production tend to be encouraged or discouraged. All three are often changed by a trade pact
.
, safe trade
, or any tying of money supply
to methods of measuring well-being. It is advocates of these measures that usually refer to tax, tariff, and trade policy as a single and indivisible anti-globalization movement
, for instance, focuses on relationships between internal and external rules, and on the internal markets of a state, and what kinds of trade relations they create. They criticize inadequacy of existing rules, and argue that most of the so-called 'trade' rules are actually investment guarantees.
Critics of these movements and defenders of free trade
and global investment liberalization respond that the older ideas of independent trade policy, investment policy
and industrial policy
assumed that a higher degree of control by governments over business was possible.
While factions disagree on the changes and the direction of change, all agree that the newer ideas about unified tax, tariff and trade laws take globalization
for granted, and assume that not only nation states but larger trade blocs and smaller regions and cities are in competitive positions relative to other players worldwide:
Despite some exceptions, in a global economy, policy on all three issues reduces to quantitative distinctions, and impact of change must be considered on all fronts at once. To avoid a "race to the bottom
" as competing jurisdictions try to undercut pricing, trade bloc
rules and trade pact
s become more necessary, e.g. North American Free Trade Agreement
, and political integration for common rule-making more desirable, e.g. as in the European Union
(EU).
Critics of this process, notably in the safe trade
, fair trade
, and anti-globalization movement
s, argue that this is itself a race to the bottom, in standards and regulations. Protections typically afforded by the state to its own citizens can no longer be economically afforded in an environment where the state itself is in a competitive position in a global market.
One solution is the development of simultaneous policy
initiatives, which would require trading partners to implement similar political, e.g. labor rights
, measures all at the same time, so none were disadvantaged economically relative to its trading partners for implementing a measure that all of the partners deemed desirable.
The EU, has a particularly strong form of integration of the three, fixing the targets of taxation, ending most internal tariffs, and building a common West European trade bloc. Recently they also developed a common currency, the Euro
, and are planning to implement some fair trade
rules based on means of measuring well-being. In the process, however, they have retained a system of agricultural subsidy
which keeps the EU self-sufficient in food. Some call this hypocrisy, others call it evidence that a program of liberalization has limits, and that food and water supplies are inherently tied to local interests and ecologies. Thus some subsidies, and agricultural policy
, are not part of the same negotiations as lead to tax, tariff and trade rule changes. Monetary integration is also considered a separate issue, and indeed the Euro was not implemented until long after acceptance of tax, tariff, trade rules.
The tax, tariff and trade laws of a political region, state or trade block determine which forms of consumption and production tend to be encouraged or discouraged. All three are often changed by a trade pact.
Typically all three types of laws must also be changed to implement any program of moral purchasing, fair trade, safe trade, or any tying of money supply to methods of measuring well-being. It is advocates of these measures that usually refer to tax, tariff, and trade policy as a single and indivisible anti-globalization movement, for instance, focuses on relationships between internal and external rules, and on the internal markets of a state, and what kinds of trade relations they create. They criticize inadequacy of existing rules, and argue that most of the so-called 'trade' rules are actually investment guarantees.
Critics of these movements and defenders of free trade and global investment liberalization respond that the older ideas of independent trade policy, investment policy and industrial policy assumed that a higher degree of control by governments over business was possible. Tariffs on marijuana were implied during the early 1900's but were then removed by the marijuana tax stamp in 1938, making it illegal.
While factions disagree on the desirability of the changes and the direction of change, all agree that the newer ideas about unified tax, tariff and trade laws take globalization for granted, and assume that not only nation states but larger trade blocks and smaller regions and cities are in competitive positions relative to other players worldwide:
Tax policy to encourage or discourage particular types of consumption or production in the jurisdiction.
Tariffs, or lack thereof, to encourage or discourage imports or consumption inside the jurisdiction.
Trade, especially investment, policy to encourage or discourage location of particular types of activity in the jurisdiction, especially leading to export opportunities.
Despite some exceptions, in a global economy, policy on all three issues reduces to quantitative distinctions, and impact of change must be considered on all fronts at once. To avoid a "race to the bottom" as competing jurisdictions try to undercut pricing, trade block rules and trade pacts become more necessary, e.g. North American Free Trade Agreement, and political integration for common rule-making more desirable, e.g. as in the European Union (EU).
Critics of this process, notably in the safe trade, fair trade, and anti-globalization movements, argue that this is itself a race to the bottom, in standards and regulations. Protections typically afforded by the state to its own citizens can no longer be economically afforded in an environment where the state itself is in a competitive position in a global market.
One solution is the development of simultaneous policy initiatives, which would require trading partners to implement similar political, e.g. labor rights, measures all at the same time, so none were disadvantaged economically relative to its trading partners for implementing a measure that all of the partners deemed desirable.
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
or trade bloc
Trade bloc
A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, are reduced or eliminated among the participating states.-Description:...
determine which form of consumption
Consumption (economics)
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...
and production tend to be encouraged or discouraged. All three are often changed by a trade pact
Trade pact
A trade pact is a wide ranging tax, tariff and trade pact that often includes investment guarantees. The most common trade pacts are of the preferential and free trade types are concluded in order to reduce tariffs, quotas and other trade restrictions on items traded between the signatories.-By...
.
Concept
Typically all three types of laws must also be changed to implement any program of moral purchasing, fair tradeFair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
, safe trade
Safe trade
Safe trade is a slogan advocated by Greenpeace in its desire to "green" the World Trade Organisation and the Doha Development Round. It is designed to compete with "free trade" as a concept....
, or any tying of money supply
Money supply
In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...
to methods of measuring well-being. It is advocates of these measures that usually refer to tax, tariff, and trade policy as a single and indivisible anti-globalization movement
Anti-globalization movement
The anti-globalization movement, or counter-globalisation movement, is critical of the globalization of corporate capitalism. The movement is also commonly referred to as the global justice movement, alter-globalization movement, anti-globalist movement, anti-corporate globalization movement, or...
, for instance, focuses on relationships between internal and external rules, and on the internal markets of a state, and what kinds of trade relations they create. They criticize inadequacy of existing rules, and argue that most of the so-called 'trade' rules are actually investment guarantees.
Critics of these movements and defenders of free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
and global investment liberalization respond that the older ideas of independent trade policy, investment policy
Investment policy
An investment policy is any government regulation or law that encourages or discourages foreign investment in the local economy, e.g. currency exchange limits.- Explanation :...
and industrial policy
Industrial policy
The Industrial Policy plan of a nation, sometimes shortened IP, "denotes a nation's declared, official, total strategic effort to influence sectoral development and, thus, national industry portfolio." These interventionist measures comprise "policies that stimulate specific activities and promote...
assumed that a higher degree of control by governments over business was possible.
While factions disagree on the changes and the direction of change, all agree that the newer ideas about unified tax, tariff and trade laws take globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
for granted, and assume that not only nation states but larger trade blocs and smaller regions and cities are in competitive positions relative to other players worldwide:
- Tax policy to encourage or discourage particular types of consumption or production in the jurisdiction.
- Tariffs, or lack thereof, to encourage or discourage imports or consumption inside the jurisdiction.
- Trade, especially investment, policy to encourage or discourage location of particular types of activity in the jurisdiction, especially leading to export opportunities.
Despite some exceptions, in a global economy, policy on all three issues reduces to quantitative distinctions, and impact of change must be considered on all fronts at once. To avoid a "race to the bottom
Race to the bottom
A race to the bottom is a socio-economic concept that is argued to occur between countries as an outcome of regulatory competition, progressive taxation policies and social welfare spending...
" as competing jurisdictions try to undercut pricing, trade bloc
Trade bloc
A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, are reduced or eliminated among the participating states.-Description:...
rules and trade pact
Trade pact
A trade pact is a wide ranging tax, tariff and trade pact that often includes investment guarantees. The most common trade pacts are of the preferential and free trade types are concluded in order to reduce tariffs, quotas and other trade restrictions on items traded between the signatories.-By...
s become more necessary, e.g. North American Free Trade Agreement
North American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...
, and political integration for common rule-making more desirable, e.g. as in the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
(EU).
Critics of this process, notably in the safe trade
Safe trade
Safe trade is a slogan advocated by Greenpeace in its desire to "green" the World Trade Organisation and the Doha Development Round. It is designed to compete with "free trade" as a concept....
, fair trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
, and anti-globalization movement
Anti-globalization movement
The anti-globalization movement, or counter-globalisation movement, is critical of the globalization of corporate capitalism. The movement is also commonly referred to as the global justice movement, alter-globalization movement, anti-globalist movement, anti-corporate globalization movement, or...
s, argue that this is itself a race to the bottom, in standards and regulations. Protections typically afforded by the state to its own citizens can no longer be economically afforded in an environment where the state itself is in a competitive position in a global market.
One solution is the development of simultaneous policy
Simultaneous policy
Simultaneous policy requires governments in all jurisdictions at once, worldwide, to implement a policy shift at once, so that none is disadvantaged or unfairly advantaged....
initiatives, which would require trading partners to implement similar political, e.g. labor rights
Labor rights
Labor rights or workers' rights are a group of legal rights and claimed human rights having to do with labor relations between workers and their employers, usually obtained under labor and employment law. In general, these rights' debates have to do with negotiating workers' pay, benefits, and safe...
, measures all at the same time, so none were disadvantaged economically relative to its trading partners for implementing a measure that all of the partners deemed desirable.
The EU, has a particularly strong form of integration of the three, fixing the targets of taxation, ending most internal tariffs, and building a common West European trade bloc. Recently they also developed a common currency, the Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
, and are planning to implement some fair trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...
rules based on means of measuring well-being. In the process, however, they have retained a system of agricultural subsidy
Agricultural subsidy
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...
which keeps the EU self-sufficient in food. Some call this hypocrisy, others call it evidence that a program of liberalization has limits, and that food and water supplies are inherently tied to local interests and ecologies. Thus some subsidies, and agricultural policy
Agricultural policy
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets...
, are not part of the same negotiations as lead to tax, tariff and trade rule changes. Monetary integration is also considered a separate issue, and indeed the Euro was not implemented until long after acceptance of tax, tariff, trade rules.
The tax, tariff and trade laws of a political region, state or trade block determine which forms of consumption and production tend to be encouraged or discouraged. All three are often changed by a trade pact.
Typically all three types of laws must also be changed to implement any program of moral purchasing, fair trade, safe trade, or any tying of money supply to methods of measuring well-being. It is advocates of these measures that usually refer to tax, tariff, and trade policy as a single and indivisible anti-globalization movement, for instance, focuses on relationships between internal and external rules, and on the internal markets of a state, and what kinds of trade relations they create. They criticize inadequacy of existing rules, and argue that most of the so-called 'trade' rules are actually investment guarantees.
Critics of these movements and defenders of free trade and global investment liberalization respond that the older ideas of independent trade policy, investment policy and industrial policy assumed that a higher degree of control by governments over business was possible. Tariffs on marijuana were implied during the early 1900's but were then removed by the marijuana tax stamp in 1938, making it illegal.
While factions disagree on the desirability of the changes and the direction of change, all agree that the newer ideas about unified tax, tariff and trade laws take globalization for granted, and assume that not only nation states but larger trade blocks and smaller regions and cities are in competitive positions relative to other players worldwide:
Tax policy to encourage or discourage particular types of consumption or production in the jurisdiction.
Tariffs, or lack thereof, to encourage or discourage imports or consumption inside the jurisdiction.
Trade, especially investment, policy to encourage or discourage location of particular types of activity in the jurisdiction, especially leading to export opportunities.
Despite some exceptions, in a global economy, policy on all three issues reduces to quantitative distinctions, and impact of change must be considered on all fronts at once. To avoid a "race to the bottom" as competing jurisdictions try to undercut pricing, trade block rules and trade pacts become more necessary, e.g. North American Free Trade Agreement, and political integration for common rule-making more desirable, e.g. as in the European Union (EU).
Critics of this process, notably in the safe trade, fair trade, and anti-globalization movements, argue that this is itself a race to the bottom, in standards and regulations. Protections typically afforded by the state to its own citizens can no longer be economically afforded in an environment where the state itself is in a competitive position in a global market.
One solution is the development of simultaneous policy initiatives, which would require trading partners to implement similar political, e.g. labor rights, measures all at the same time, so none were disadvantaged economically relative to its trading partners for implementing a measure that all of the partners deemed desirable.