RIP Nafta

[nzwasp]

You guys are willing to throw away our great copyright protections laws and adopt the us draconian methods for cheaper cheese?

[Xtrema]

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You guys are willing to throw away our great copyright protections laws and adopt the us draconian methods for cheaper cheese?

We almost did. And throw the generic drug market into chaos as well.

So did NZ if I recall as they were part of TPP as well.

But NZ has been doing US's bidding anyway on Kim Dotcom.

[suntan]

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If you see an industry go under the wealth that was created in that industry disappears. Any wealth creation you're talking about needs to overcome that AND absorb the economic activity it generates to boot (and overcome the significant job loss, associated tax loss from contributors becoming receivers, a sector of people not receiving government money now receiving government money). Similar to the price of oil affecting all sorts of service industries, the same happens with agriculture. All the steps that go into creating the product to be sold get replaced by just the product from somewhere else and you lose everything down the chain.

You've called Canadians and Europeans dumb, but haven't chastised the Americans for wanting to transfer us wealth, and not wanting to embrace the loss of their lumber industry and deal with all the wealth creation taking our free money via softwood lumber. Why is that? They'er clearly the dumbest ones around in all of this.

Also, where has all the wealth creation been in Canada since 2014 with the lower cost of oil? We should be entering a golden age with your reasoning of 'job loss = good'.



So hopefully this is what you've been telling all the oil workers in Alberta who are complaining about not having a job.

Also, how do you feel about government subsidies affecting the free market? Canadian milk isn't inherently more expensive to produce than other milk resulting in inflated prices. It just isn't subsidized to allow the oversupply that sees lower milk prices like in the U.S.

Damn I'm always impressed by how confounded you always are.

There are two issues here:

There are massive, massive tariffs on dairy goods imported into Canada.

There is a supply management system in Canada, which indeed is a clear-cut subsidy.

Canada can reduce tariffs. No one will then give a shit if Canada keeps their supply management system.

Fact is, even if European and American cheese starts "flooding" the market, most people are still going to buy Canadian dairy products. Just our bilingual language requirements and small customer base will keep many players away, despite a more open market.

I hardly quantify the dairy market as being so efficient and commoditized that customers will instantly flock to the cheapest products. Fact is there's lot of cheap dairy crap available right now.

[suntan]

Also, where has all the wealth creation been in Canada since 2014 with the lower cost of oil? We should be entering a golden age with your reasoning of 'job loss = good'.

I'm going to address this specifically.

Yes indeed there has been wealth creation in Canada due to low oil and gas prices. Ontario and BC are both large consumers of said products and have seen large increases in GDP due in part to low energy cost inputs.

The problem is that Alberta and some other provinces produce the products, and our GDP is tied to that production, whereas other provinces are not.

Fuck you're such a simpleton.

[Buster]

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If you see an industry go under the wealth that was created in that industry disappears. Any wealth creation you're talking about needs to overcome that AND absorb the economic activity it generates to boot (and overcome the significant job loss, associated tax loss from contributors becoming receivers, a sector of people not receiving government money now receiving government money). Similar to the price of oil affecting all sorts of service industries, the same happens with agriculture. All the steps that go into creating the product to be sold get replaced by just the product from somewhere else and you lose everything down the chain.

You've called Canadians and Europeans dumb, but haven't chastised the Americans for wanting to transfer us wealth, and not wanting to embrace the loss of their lumber industry and deal with all the wealth creation taking our free money via softwood lumber. Why is that? They'er clearly the dumbest ones around in all of this.

Also, where has all the wealth creation been in Canada since 2014 with the lower cost of oil? We should be entering a golden age with your reasoning of 'job loss = good'.

The wealth does not "disappear", it is simply re-allocated to other areas of the economy that can more efficiently use it. When you protect one industry, you confer a significant, concentrated benefit on a small minority. When you remove a protection, you create a more diffuse, generalized benefit on the economy as a whole. It is a harder to see and feel that benefit, so it is easier for people to assume it doesn't exist. But that benefit is much larger in scale.

[Feruk]

Why would we pick some industries to protect and not others? It's been shown time and time again that free market works way better than government planned economies. So why would we support government picking winners and losers?

I never see anyone protesting opening up the telecommunications industry to competition, but somehow getting fucked on the price of cheese is ok?

[msommers]

What about maple syrup and the Federation?

[kertejud2]

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The wealth does not "disappear", it is simply re-allocated to other areas of the economy that can more efficiently use it. When you protect one industry, you confer a significant, concentrated benefit on a small minority. When you remove a protection, you create a more diffuse, generalized benefit on the economy as a whole. It is a harder to see and feel that benefit, so it is easier for people to assume it doesn't exist. But that benefit is much larger in scale.

Except you're supporting the demise of a domestic industry, for the benefit of a protected foreign industry.

The U.S. wants us to end supply management and open up the market to their milk so their subsidized dairy producers can sell more product and make more money who can then use that money to re-invest in the economy. Yet you're saying that Trump should end that subsidy and let American dairy producers go under for the good of their economy. Why do you think the U.S. is protecting their dairy industry? Why do you think Europe is? Why are they so desperate to get Canada to open up the market to their dairy?

[msommers]

Cuz China is lactose intolerant.

[Buster]

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Except you're supporting the demise of a domestic industry, for the benefit of a protected foreign industry.

The U.S. wants us to end supply management and open up the market to their milk so their subsidized dairy producers can sell more product and make more money who can then use that money to re-invest in the economy. Yet you're saying that Trump should end that subsidy and let American dairy producers go under for the good of their economy. Why do you think the U.S. is protecting their dairy industry? Why do you think Europe is? Why are they so desperate to get Canada to open up the market to their dairy?

I'm not supported the demise of an industry, but I am supporting the increased wealth of the average Canadian so they can support other industries. Again, this is the argument about a small, but concentrated benefit versus a large, but diffuse benefit. The latter is obviously preferable, but harder to see intuitively. Which is why I end up in discussions like this.

You're wrong on the assumption that a subsidized industry will be able to "re-invest" in the economy. Quite the opposite is true: subsidizing an industry like the Americans or Europeans are doing with dairy is a net negative on their economy, not a net positive. You are taking productive resources from the economy and diverting them to less productive areas of the economy through taxation. The money to pay for a subsidy comes from the rest of the economy and is simply captured by the gov't and re-purposed.

[max_boost]

Damn you learn so much from reading the posts of @rage2 and @Buster

[vengie]

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Damn you learn so much from reading the posts of @rage2 and @Buster

Economics

[Sugarphreak]

...

[kertejud2]

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Why would we pick some industries to protect and not others? It's been shown time and time again that free market works way better than government planned economies. So why would we support government picking winners and losers?

I never see anyone protesting opening up the telecommunications industry to competition, but somehow getting fucked on the price of cheese is ok?

Volatility in price and supply made food production effectively a national security and sovereignty issue across the globe in the 20th Century. Dairy is particularly susceptible to price volatility (short shelf life, high demand staple means any change in supply could see wild shifts in prices) which means farmers and producers are vulnerable and supply could be inconsistent as a result. Canada combated this with supply management, Europe and the U.S. combated it with direct subsidies. Both were done to ensure a stable supply of a staple food item just like poultry and egg protections.

You protect your own agriculture industries because otherwise you lose leverage with the economies you then rely on in trade negotiations for other things. Then a trade war becomes more than just trying to get the best deal for car parts or electronics or steel. It can result in a huge disruption to your population's access to food, which isn't something any government should want for their people.

Sure the Cold War might be over and we're trying to be more open, but like a military de-escalation a market protection de-escalation can only work if everybody is going along with it. 'We'll drop subsidies if you drop them, too' kind of stuff, hoping that the market will actually be free and fair. What Trump wants with dairy isn't fair. He wants Canada to open up our market (drop our protections) so that the protected American industry can have access to it.

[kertejud2]

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I'm not supported the demise of an industry, but I am supporting the increased wealth of the average Canadian so they can support other industries.

Does the wealth of the average Canadian go up if a hundred thousand people or so lose their jobs? Doubtful.

You're wrong on the assumption that a subsidized industry will be able to "re-invest" in the economy. Quite the opposite is true: subsidizing an industry like the Americans or Europeans are doing with dairy is a net negative on their economy, not a net positive. You are taking productive resources from the economy and diverting them to less productive areas of the economy through taxation. The money to pay for a subsidy comes from the rest of the economy and is simply captured by the gov't and re-purposed.

So if Trump smartens up and ends American dairy subsidies, driving the price of their product up, what savings will the average Canadian see then? The only reason there are even savings to be talked about by opening the market up is because there would be access to subsidized dairy. If that stops, how is the average Canadian better off? Sure there could still be a good sized Canadian dairy industry, but it would be rife with volatility that could see massive spikes and dips in price that saw the need to instill protections that ensured stable supply in the first place.

[mazdavirgin]

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I could be wrong, but doesn't the US massively subsidize their farmers?

Fuck the dairy cartel for sure, however any new agreement has to take that into consideration

I'd be in favour of true free markets, but that is never going to happen because there will always be special interest groups getting subsidies or market protection on both sides of the border

That's sort of a huge problem... The people cheering getting rid of the "dairy" cartel are going to sell us out to the American and their subsidies. This shit is no different than the whole ongoing softwood lumber fiasco. You have to protect your own industries when the folks south of the border keep doing stupid shit to prop up their own industries. Rolling over and letting us get boned by Trump is really not the proper course of action here.

[Buster]

So we create high prices because it's better to be inefficient, but stable, than efficient but open to market forces? This isn't good reasoning. Open markets will lead to price and supply stability, not the reverse, as we reach equilibrium, or equilibrium needs to shift.

As for the US being "unfair" in their subsidies - that's just fine. If it takes $5 to produce a wheel of brie, and it gets sold at retail here for $4 with the difference being the US taxpayer, then that's a net transfer of $1 from the US taxpayer to me when I buy it. That's a flow of wealth into Canadian pockets in the form of a subsidy. A US taxpayer is literally giving a Canadian citizen a dollar.

Never mind if you CAN compete with that, why would you WANT to. It's a great deal. The financial capital, and the human capital that goes into the Canadian dairy industry would be re-allocated to other things. It would not disappear. And the supply of that capital (every Canadian not in the dairy industry), would then in fact have MORE capital to invest in the rest of Canada. That dollar saved on the wheel of cheese is going to get saved and turn into investment capital, or it will get spent and fortify a different industry. All Canadians win. The dairy guys just have to go find something else to do - which in all likelihood will be far more beneficial to the Canadian economy than selling over-priced cheese.

Imagine a house with two room-mates. The room-mates like to drink beer. One room-mate has a job he goes to to earn money. The other room-mate is very good at making beer, and so he sits in the basement and makes beer all day. When the other room-mate arrives home at night, Beer Roommate sells him a beer for $20 - this is Beer Room-mates only source of income. Worker Room-mate is okay with this transaction, the beer is good, but not great. One day the Worker Roommate comes home and says to the Beer Roommate: "hey man a liquor store down the road opened and sells awesome beer for cheap." Beer Roommate gets worried and tells worker Room-mate that he better not buy THAT beer because then Beer Roommate would no longer be able to afford his share of the rent. This is a silly argument on its face as the money is all coming from the Worker Roommate anyway. It should be obvious what happens next: Worker Room-mate sees that he can take the $15 a day savings and invest it in something that will be valuable - perhaps something that can be sold outside the house. Perhaps Beer Roommate says: look man buy the cheap beer, can I borrow the $15 difference, and use it to build some a tomato garden in the back-yard? We can eat some of the tomatoes, but sell far more.

The two Roommates got rich selling tomatoes, all the while drinking cheap awesome beer. The End.

[dirtsniffer]

except in reality this room mate is quebec, so it goes broke and refuses to move out. while blaming the other roommate for letting the other store open

[tonytiger55]

I think one of the key points being missed in regards to subsidies that is not about CHEAP cheese. Its the GOOD CHEAP CHEESE.

[msommers]

What Canada really needs much more of is Mache.