EU, Canada, Others invoke trade sanctions on US goods

[Salvation122]

Canada is stepping up action against an illegal U.S. trade measure known as the Byrd amendment by slapping sanctions on some U.S. imports.

The announcement of a 15 per cent surtax on cigarettes, oysters and live swine from the United States came Thursday just as the European Union took similar measures.

"For the last four years, Canada and a number of other countries have repeatedly urged the United States to repeal the Byrd Amendment," said International Trade Minister Jim Peterson in a statement.

"Retaliation is not our preferred option, but it is a necessary action. International trade rules must be respected."

The moves come as countries from around the world protest the Byrd amendment -- legislation that the World Trade Organization has deemed illegal.

The amendment allows American companies to keep the proceeds that Washington collects in anti-dumping disputes -- something Canada and other countries complain unfairly enriches their U.S. rival firms.

The WTO first ruled the legislation illegal in 2002 and gave the United States until the end of 2003 to conform. It didn't, so last November, the WTO gave Canada and the other complainants the authority to retaliate.

The other complainants are the European Union, Brazil, Chile, India, Japan, Mexico and South Korea.

Beginning May 1, the EU is adding additional duties of up to 15 per cent on such U.S. products as paper, textiles, machinery and farm produce.

"The Commission took this latest step in the dispute over the Byrd Amendment in light of the continuing failure of the United States to bring its legislation in conformity with its international obligations," the European Commission said in a statement.

Since the Byrd legislation came into place, over $1 billion US has been distributed to such American industries as steel and metal producers and food and household items.

Peterson says that while, overall, the Canada-U.S. trade relationship is as strong as ever, "both sides lose from such disputes. We must put an end to them."

I really, really don't understand how socialized and/or protectionist countries (like, say, Denmark and Japan) can try to claim some kind of moral high ground over the Byrd Amendment.

Anyway. Thoughts? Consequences?

[Serious Paul]

I can sum my own opinion up pretty easily by editing a single line.

"Retaliation is not our preferred option, but it is a necessary action. We be respected."

Of course that's just at first glance, and I have been listening to some NWA...I'll have a more serious reply as soon I mull over this for a while.

[Toryu]

I really, really don't understand how socialized and/or protectionist countries (like, say, Denmark and Japan) can try to claim some kind of moral high ground over the Byrd Amendment.

Anyway. Thoughts? Consequences?

What exactly don't you understand?

[lorg]

I really, really don't understand how socialized and/or protectionist countries (like, say, Denmark and Japan) can try to claim some kind of moral high ground over the Byrd Amendment.

Anyway. Thoughts? Consequences?

The Byrd amendment is probably a form of government subsidizing to the US Steel industry which in turn makes EU/Canadian steel a less interesting option for purchase. So that is probably the justification for that. So it's not a matter of winning the moral high ground but a tit for tat tradewar, one lowers the prices on something and they hit back on a few other things, in this case live swine, oysters and cigarettes.

What a wacky selection of items that was.

[FlakJacket]

What a wacky selection of items that was.

There's probably a lot of sense behind them. Rather than just pick goods and slap on an increase, they'll target them specially by selecting products that put the squeeze on certain key politicians.

[Salvation122]

I really, really don't understand how socialized and/or protectionist countries (like, say, Denmark and Japan) can try to claim some kind of moral high ground over the Byrd Amendment.

Anyway. Thoughts? Consequences?

What exactly don't you understand?

The Byrd Amendment gives the fines from anti-dumping disputes to American corporations in the same buisness (which is pretty consistant with American law); essentially the government collects the money and immediately funnels it into corporations The WTO and EU et al have a problem with this, which is strange to me because socialized nations have partially government-subsidized industries. They're doing the same thing, just using a different method.

[lorg]

What a wacky selection of items that was.

There's probably a lot of sense behind them. Rather than just pick goods and slap on an increase, they'll target them specially by selecting products that put the squeeze on certain key politicians.

Really? This isn't exactlly the first trade dispute between the involved parties and somehow it is always "wacky stuff" that gets picked. Just how many live swine do we import? tons of oysters etc? Why not slap something like Software or something that might actually hurt not selling to Europe and Canada.

The Byrd Amendment gives the fines from anti-dumping disputes to American corporations in the same buisness (which is pretty consistant with American law); essentially the government collects the money and immediately funnels it into corporations The WTO and EU et al have a problem with this, which is strange to me because socialized nations have partially government-subsidized industries. They're doing the same thing, just using a different method.

Well we are not exactlly alone in doing that. The US does it, Europe does it, everybody does it. Which is why I think this is a neverending tit for tat game. Plus the sanctiones never really amount to much if one compares the values.

[Van Der Litreb]

*sneezes, coughs, almost faints from his flu, and airily waves a hand*

This is not the Dane you're looking for.. *wheeze*

[paladin2019]

Anti-dumping disputes? As in dumping waste? Or dumping prices (to make the goods more attractive?)

[3278]

I don't understand this issue at all. Could someone explain it to me the way you'd explain it to a child?

[mrmooky]

I really, really don't understand how socialized and/or protectionist countries (like, say, Denmark and Japan) can try to claim some kind of moral high ground over the Byrd Amendment.

There's no moral aspect to it whatsoever. It's simply a case of Canada and the EU saying, "you're trying to fuck us over, and we don't like that, so we won't play ball. Or rather, we'll play a different ballgame, which is about protectionism rather than free trade." Perfectly defensible, since the moment the Byrd Amendment passed, the US stopped playing the free trade game itself.

[Toryu]

I don't understand this issue at all. Could someone explain it to me the way you'd explain it to a child?

Sure.

First, a little background on the Byrd Amendment.

In late 2000, one of the final acts of the outgoing 106th U.S. Congress was to pass the Agriculture Spending bill, Public Law 106-387.

Included in that bill, as amendment Title X, Sen. Robert Byrd inserted the Continued Dumping and Subsidy Offset Act of 2000 -- now known as the CDSOA or "Byrd Amendment."

Essentially, the CDSOA modifies the Tariff Act of 1930 and instructs Customs to put all antidumping tariffs it collects into special accounts, one for each case. Previously, that money went directly into the general Treasury. At the end of the fiscal year, the money collected in those case-by-case accounts is then paid out directly to the companies successfully participating in each case.

While the CDSOA, originally authored by Senator DeWine (Ohio), was around since early in the 106th Congress, it had failed to gather any significant support due to serious questions about its legality under World Trade Organization rules and NAFTA rules.

Senator Byrd, the influential senior Senator from West Virginia, picked up on the CDSOA as a way to support the ailing steel industry in his and neighboring areas. Senator Byrd added the CDSOA as an unrelated "rider," Title X, to that critical agriculture appropriations bill. Few congressmen say they realized it had been added, and it passed almost unnoticed, with no deliberation. After that maneuver, it became known as the "Byrd Amendment."

The CDSOA took effect for 2001 and the first payouts were made late in 2001. In the bearing industry, only Timken and Torrington were eligible for payments. For 2002, a few other manufacturers joined Timken and Torrington to became eligible in one case, but it was unclear if they would file to receive payouts if their proportion was too small to warrant the effort.

When Senator Byrd sponsored the legislation, he stated that the program would primarily benefit U.S. steel manufacturers; he also indicated the General Accounting Office had determined the program would cost no more than $38 million. In fact, however, the CDSOA program in 2001 paid out $230 million to 900 claimants. In 2002, the amount ballooned 43% to $329 million paid out to over 1,200 claimants.

The CDSOA quickly provoked a predictable trade backlash around the world. Even in the United States, support has been almost entirely from politicians and not from industry -- except for those few companies receiving payouts. It has also provoked widespread anger from small manufacturers who say they were hurt by unfair imports but could never afford the time and expense of hiring high-priced lawyers to participate in antidumping cases.

On October 28, 2000, President Clinton signed the agriculture spending bill, containing the Byrd amendment, into law. Mr. Clinton indicated that he wanted Congress to override the Byrd amendment, saying, "I call on the Congress to override this provision, or amend it to be acceptable, before they adjourn." But Congress did not take action.

Some further points of note:

1. U.S. antidumping duty laws are designed to compensate for any price advantage gained by dumped imports. If a company imports a product deemed to be sold at less than fair value, it must pay the punitive duty. When these duties are then handed over to other U.S. companies, those companies then get the same price advantage the U.S. company importing the product was not allowed to enjoy. To make things worse, the advantage received by Byrd Amendment recipients comes directly from the pockets of other U.S. companies. It actually creates twice the benefit because the money comes from one U.S. company and at the same time, goes directly to its competitor.

2. The Byrd Amendment creates a subsidy for a select group of companies, an irony considering antidumping and countervailing duty laws were implemented in part to combat subsidies.

3. Subsidies create trade barriers, which in turn hampers free trade, something which the U.S. is otherwise quite fond of.

4. The Byrd Amendment results in a greater cost to consumers because imported products must be priced higher to offset the distortion it creates. It encourages inefficiency.

5. The WTO ruled the Byrd Amendment illegal more than a year ago, but the U.S. has failed to comply.

6. The WTO is the only international agency overseeing the rules of international trade. It polices free trade agreements, settles trade disputes between governments and organises trade negotiations. WTO decisions are absolute and every member must abide by its rulings.

7. The EU, Canada, Japan, South Korea and Brazil are going to impose penalties in retaliation of the Byrd amendment, which are sanctioned by the WTO.

[Toryu]

The Byrd Amendment gives the fines from anti-dumping disputes to American corporations in the same buisness (which is pretty consistant with American law); essentially the government collects the money and immediately funnels it into corporations The WTO and EU et al have a problem with this, which is strange to me because socialized nations have partially government-subsidized industries. They're doing the same thing, just using a different method.

Socialized nations? Partially government-subsidzed industries? I'm curious. What do you mean by this? Can you give a few examples on how/where EU countries subsidize companies relevant to the Byrd Amendment?

[WillyGilligan]

The example I keep hearing involves Canadian softwood lumber. Supposedly their government subsidies the lumber companies.

[Marius]

Ah, Grand Dragon Byrd. Our favorite Senator.

[3278]

Well, I do appreciate the effort, Jan, but when I said, "Explain it to me like I'm a child," I really meant it. International trade - in the specific, anyway - is something I'm almost totally ignorant of. For instance, I don't know what "dumping" means in this context, making everything everyone's said completely meaningless to me.

I really would like someone to simply, cleanly, in basic everyday terms, explain what this all means, and what about it is good or bad.

[Ln(e)]

The example I keep hearing involves Canadian softwood lumber. Supposedly their government subsidies the lumber companies.

Actually, the United States complaint is that the Canadian Government (or more correctly, the Provinicial Governments) doesn't charge the companies enough to use the land to get the lumber. Apparently this is subsidizing the lumber industry. What is really is that the governments give the companies sweet deals to make their businesses profitable, then tax the worker.

In Canada, the governments have an auction for the land to be leased. The winner of the auction then gets to harvest the resources available (in this case, the trees for lumber) in the period of of the lease. The companies then pay a royalty to the provincial goverment for the right to harvest and sell the government's lumber. All of this costs much less then the US version I hear (our stumpage fees are less that the US), so the softwood lumber Canada sells to the US is less expensive than the US producers, who have to cut their prices to compete. This forces the US companies to earn less profit, or even lose money and market share. Of course, I could be wrong, as I am applying what I know about petroleum leases to what I have heard about the lumber industry. Any Canadian lumberjacks about? Perhaps Sock Monkey could help, he seems to have done a lot of jobs, and knows a lot about things I don't and never expected him to.

The Byrd Admendment, and action against softwood lumber has violated both the WTO and NAFTA agreements. But the US holds most of the power in our relationship, so there isn't much Canada can do. Except look for and develop other markets, which is why Canada is becoming so chummy with China.

I don't know what the complaints are against the steel industry, but I hear that the US is just being protectionist there. Places like China and Korea have more modern equipment and technology, as well as lower labour costs, which makes their steel less expensive to produce. When sold on the US market, it costs less than the US producers can make steel at. But that is just one side of the story I have heard.

[FlakJacket]

The steel industry is also getting massacred thanks to the generous pensions schemes they used to offer years back and which have now matured from what I've been told.

[Toryu]

Well, I do appreciate the effort, Jan, but when I said, "Explain it to me like I'm a child," I really meant it. International trade - in the specific, anyway - is something I'm almost totally ignorant of. For instance, I don't know what "dumping" means in this context, making everything everyone's said completely meaningless to me.

I really would like someone to simply, cleanly, in basic everyday terms, explain what this all means, and what about it is good or bad.

Awright, let's start with the basics, then.

Free Trade
...means trade between countries without tariffs, duties or other trade barriers. Free trade is generally considered a good thing, at least between developed countries, as it raises the standard of living and spurs economic growth. Free trade is mainly based on the 19th century works of David Ricardo, who formulated his Theory of Comparative Advantage.

Trade Barriers
Trade Barrier in general means a restriction on international trade by a country's government through (among others) tariffs and duties, or subsidies.
Tariffs and duties are basically a tax placed on imported and/or exported goods to artificially inflate the price of imported goods, e.g. steel. Countries mostly do this to protect a domestic industry from more efficient competitors from abroad who are able to produce the goods in question at a lower cost.
A subsidy is generally a monetary grant given by government in support of an industry. The most prominent example of subsidies are those given to farmers in the EU and the US, mainly in the form of tax reductions and lowered prices for water. This gives the subsidized industry an artificial competitive advantage, as it lowers their production costs.
These means of protectionism are often politically motivated: Politicians are protecting certain industries through tariffs and subsidies because they want to get on the respective industry's good side in order to get their votes. The Byrd Amendment mainly protects the steel industry, EU and US farming subsidies...well, you guessed it, the farmers.
Protectionism certainly does benefit the producers in the protected industry, but consumers are usually worse off, as they have to pay either higher taxes to finance the subsidies, or pay higher prices for goods in case of a tariff.


Dumping
Dumping is the act of selling a product at a loss now in order to drive competitors out of business, with the goal of raising prices when they do in order to recoup the investment. In international trade, however, it is very hard to determine if a foreign company is actually dumping a product, or is simply more efficient in making the product, or has an advantage in production. It could be argued that Canada has a real advantage in logging because there's just so many fucking trees there up north, and that the low cost at which the Canadian provincial goverments allow timber companies to log crown lands doesn't constitute an illegal subsidy, as this is solely a matter of supply (duh.) and demand. Yes, the Canucks do have a lot of trees.

[Toryu]

The Byrd Amendment gives the fines from anti-dumping disputes to American corporations in the same buisness (which is pretty consistant with American law); essentially the government collects the money and immediately funnels it into corporations The WTO and EU et al have a problem with this, which is strange to me because socialized nations have partially government-subsidized industries. They're doing the same thing, just using a different method.

Socialized nations? Partially government-subsidzed industries? I'm curious. What do you mean by this? Can you give a few examples on how/where EU countries subsidize companies relevant to the Byrd Amendment?

I am anxious to hear your reply, Sal.

[Cain]

Well, just about every Westernized nation subsidises their farmers, us included.

32: If you want to understand the underpinnings of free-market theory, I highly suggest you read the original work on the topic, Adam Smith's The Wealth Of Nations. As an additional disclaimer, I reccomend that you do not operate heavy machinery or drive while reading Smith; he can be a hard read. However, Smith's theories form the basis of our entire economic system.

[Johnny the Bull]

Well, just about every Westernized nation subsidises their farmers, us included.

32: If you want to understand the underpinnings of free-market theory, I highly suggest you read the original work on the topic, Adam Smith's The Wealth Of Nations. As an additional disclaimer, I reccomend that you do not operate heavy machinery or drive while reading Smith; he can be a hard read. However, Smith's theories form the basis of our entire economic system.

Or you could read a basic economics text. Far more relevant than the writings of Smith in terms of getting a basic understanding of the concepts.

[Johnny the Bull]

Attack of the Double Post.

[lorg]

Is a book from 1776 really the best one to explain the current state of world trade? I know that Smith is more or less the father of the topic but I would think someone newer could possibly explain it a bit better and in a more current fashion then his original work.

[Toryu]

What lorg said. Adam S. is overrated.

[Serious Paul]

I agree. His work is really put into context after you've read modren economics texts. That said, his woks for the time were excellent. It's just that his time is oh 200 plus years long gone.

I'm less than surprised by reactions on either side of this issue-I have predicted the parting of allies for years now. Europe and America are growing apart because they aren't honestly asses their relationship with each other. We alls till think it's post world war two, and that everything will be okay.

Europe isn't just waiting for America, grateful and subservient any more. Americans need to realize that. Americans will never be Europeans. Never. Europeans need to realize that their standards, and society will never completely intergrate itself into ours.

Until then we'll have these little skirmishes, and maybe, just maybe a thousand years from now a nice war.

[Toryu]

The Byrd Amendment gives the fines from anti-dumping disputes to American corporations in the same buisness (which is pretty consistant with American law); essentially the government collects the money and immediately funnels it into corporations The WTO and EU et al have a problem with this, which is strange to me because socialized nations have partially government-subsidized industries. They're doing the same thing, just using a different method.

Socialized nations? Partially government-subsidzed industries? I'm curious. What do you mean by this? Can you give a few examples on how/where EU countries subsidize companies relevant to the Byrd Amendment?

I am anxious to hear your reply, Sal.

I'm still anxiously waiting, but take your time, Sal...I'll be here all week.

[Salvation122]

Socialized nations? Partially government-subsidzed industries? I'm curious. What do you mean by this? Can you give a few examples on how/where EU countries subsidize companies relevant to the Byrd Amendment?

I am anxious to hear your reply, Sal.

I'm still anxiously waiting, but take your time, Sal...I'll be here all week.

The board's been down all day, and I've got pneumonia.

At any rate, I was under the impression that various industries in some of the Nordic EU countries - notably steel and seafood - were partially/entirely socialized. Since the Byrd Amendment is essentially a backasswards form of direct government support, I don't really see a great deal of difference between the two.

[Toryu]

The board's been down all day, and I've got pneumonia.

At any rate, I was under the impression that various industries in some of the Nordic EU countries - notably steel and seafood - were partially/entirely socialized. Since the Byrd Amendment is essentially a backasswards form of direct government support, I don't really see a great deal of difference between the two.

I think your perception of EU steel aid is quite off. The EU has - contrary to the US - very restrictive rules on steel aid. The main provisions are summarized here. You can read up on the latest developments - or rather, lack thereof - here.

[lorg]

I'm less than surprised by reactions on either side of this issue-I have predicted the parting of allies for years now. Europe and America are growing apart because they aren't honestly asses their relationship with each other. We alls till think it's post world war two, and that everything will be okay.

Europe isn't just waiting for America, grateful and subservient any more. Americans need to realize that. Americans will never be Europeans. Never. Europeans need to realize that their standards, and society will never completely intergrate itself into ours.

I concur. Recent events (say last 5 to 10 years) have hopefully given the transition a much needed shove in the right dirrection. But the shift have already taken place before and now it is about to do it again. Not that I think it will be the other way around or anything but perhaps for the first time a more equal footing instead of one serving the other like a "loyal" subject.

Until then we'll have these little skirmishes, and maybe, just maybe a thousand years from now a nice war.

I think our skirmishes will be limited to the areas of politics and finance. Nobody has much to gain by going to war vs the other. But then a thousand years is a long way away.

At any rate, I was under the impression that various industries in some of the Nordic EU countries - notably steel and seafood - were partially/entirely socialized. Since the Byrd Amendment is essentially a backasswards form of direct government support, I don't really see a great deal of difference between the two.

Yes, there are companies that are partly or majority controlled by the governments here. But there are also companies in the same line of business that are private. I don't think there are any seafood companies here that are government owned, could be some in Norway or Denmark. Sweden has a forestry company that is owned by the government (Sveaskog), think Finland has one to. Sweden has a few others like that to. Most of them are publicly held companies, the government tend to own a fair share of them thou. So if they dumped prices to sell their steel or whatever product it might be they would screw the shareholders and I doubt that would go down very well. This isn't communism after all where the government tell them what to do, they just rake in a portion of the profit. Unfortunatly there is the other spectrum of state run enterprises like the national railroad network that they usually have to inject money into on a more or less constant basis.

If you are interested in Swedish steel go here:
Swedish Steel Producers' Association
SSAB - Swedish Steel Corporation
SSAB - USA

But then I don't really find anything odd about the whole state subsidised business sector, every single country have them. Usually in a wide variety of different fields.

How much of the US defence budget couldn't be seen as one GIIIANNT state subsidy, after all it ain't like you are going to buy serious hardware from someone else even if they could build it, which they probably could.

[JongWK]

Correct me if I'm wrong, Sal, but do you actually believe that only "socialized" economies (whatever that means) are protectionist?

The US might like to define itself as a free trade nation, but it also has huge subsidies. Just ask any Latin American or G20 farmer.

[Serious Paul]

Yeah I don't think I can name a nation that doesn't protect its interests in some way. I do think that socialized nations are easier to throw that term at, protectionist that is. Just because of how they operate, and how they are perceived.

[Crazy Elf]

Also, if a socialist nation has a government run company that it's giving benifits to, then it's a government run company, and it's not out there in the global field. I may be wrong, but I can't think of any government run multi-national company.

[Johnny the Bull]

Also, if a socialist nation has a government run company that it's giving benifits to, then it's a government run company, and it's not out there in the global field. I may be wrong, but I can't think of any government run multi-national company.

IIRC the Commonwealth Bank.

[Cain]

Is a book from 1776 really the best one to explain the current state of world trade? I know that Smith is more or less the father of the topic but I would think someone newer could possibly explain it a bit better and in a more current fashion then his original work.

It's like reading the Constitution to understand our legal system. There's been a lot of refinements, and you can always find the Cliff notes version, but there's just some things that come best from the original.

At any rate, I was under the impression that various industries in some of the Nordic EU countries - notably steel and seafood - were partially/entirely socialized. Since the Byrd Amendment is essentially a backasswards form of direct government support, I don't really see a great deal of difference between the two.

As Lorg pointed out, there's a world of difference between a socialized industry and a government-subsidized one. We have several socialized companies here, not the least of which is the US postal service. The primary difference is that a socialized company is generally non-profit, while a subsidized industry is for-profit.

[Toryu]

Yeah I don't think I can name a nation that doesn't protect its interests in some way. I do think that socialized nations are easier to throw that term at, protectionist that is. Just because of how they operate, and how they are perceived.

At any rate, I was under the impression that various industries in some of the Nordic EU countries - notably steel and seafood - were partially/entirely socialized. Since the Byrd Amendment is essentially a backasswards form of direct government support, I don't really see a great deal of difference between the two.

I believe some of you mistake social with socialist there, or how Euro economies really work. EU nations (some more than others) tend to be "social" in terms of social welfare and insurance. The idea that most EU corporations are state-owned ("socialized"), however, is a misconception. To take the example of the Swedish steel industry, all of the Swedish steel producers are privately-owned, as this table shows. Lorg pointed out to me that the Swedish state does still hold a few minority shares, but that's already it. One steel producer in Sweden is even US-owned.

[3278]

As Lorg pointed out, there's a world of difference between a socialized industry and a government-subsidized one. We have several socialized companies here, not the least of which is the US postal service. The primary difference is that a socialized company is generally non-profit, while a subsidized industry is for-profit.

How, then, could the US Postal Service be considered a socialized company?

[Van Der Litreb]

International trade - in the specific, anyway - is something I'm almost totally ignorant of. For instance, I don't know what "dumping" means in this context, making everything everyone's said completely meaningless to me.

Sheesh, you never read Corporate Shadowfiles?

Sal: I think your perception of the Nordic countries is a little outdated (I don't blame you; I know just about nothing about contemporary, say, South America). While a number of our services and businesses have been state-owned in the past, the majority of those are now privately owned and run. In my own lifetime here in Denmark, I've seen the break-up of such state monopolies as telecommunication, postal services, and public transporation. To the best of my knowledge, the Danish state doesn't control any steel or fishing companies, and if they do, they certainly don't have any monopoly on those areas.
Oh, and get better soon. I just spent a week in bed because of the flu, and pneumonia ferking blows compared to that. I can't think of anything worse than being sick.

[EDIT]
Oh, and I also know jackshit about economics (except for what I inevitably picked up from Corporate Shadowfiles..), so I'll refer you to Toryu, and save myself from looking like a fool.

[Cain]

As Lorg pointed out, there's a world of difference between a socialized industry and a government-subsidized one. We have several socialized companies here, not the least of which is the US postal service. The primary difference is that a socialized company is generally non-profit, while a subsidized industry is for-profit.

How, then, could the US Postal Service be considered a socialized company?

It's entirely owned and operated by the government, for one. Subsidized industries are usually expected to show a profit, are answerable to their shareholders, and so on-- they're normal companies that recieve free money from the government. A socialized industry only has to meet government regulations.

Look, in communist Russia, the socialized industries were given government-mandated quotas, government-mandated budgets, and government-mandated operating procedures. Prices were set by government committee. Under normal market conditions, all of those would be determined by the market forces of supply and demand.

If we compare the USPS to other shipping companies, like UPS or DHL, the differences are pretty clear. The USPS runs much closer to the socialized model than a competitive one. And that's not always a bad thing-- socialized industries can work well in many areas, they're just not as efficient as market-driven firms.

[3278]

How, then, could the US Postal Service be considered a socialized company?

It's entirely owned and operated by the government, for one.

One could at least as accurately say that it's entirely owned and operated by itself. I don't think a clear case can be made that the postal service is entirely government-run, when it has a number of independent powers of its own.

Subsidized industries are usually expected to show a profit, are answerable to their shareholders, and so on-- they're normal companies that recieve free money from the government. A socialized industry only has to meet government regulations.

The postal service could more accurately be described as a government-affiliated non-profit organization than with either of those generalized terms.

Look, you can call it anything you like; they're your terms, after all, and you can use them how you choose. But the US Postal Service - since 1970, anyway - is so borderline and unique a case that it simply doesn't make a very good example of the socialized business model you're ascribing to it. Perhaps another example might be more accurate.

[Crazy Elf]

IIRC the Commonwealth Bank.

It does have some branches elsewhere, but when it comes to banking multiple branches simply means that trade between nations is easier to do. If it didn't, it would no longer be as viable as a banking institution. It's very different to a clothing label subsidised by the government that opens up a branch in Tailand for cheep workers while still getting kickbacks from the government.

[Johnny the Bull]

IIRC the Commonwealth Bank.

It does have some branches elsewhere, but when it comes to banking multiple branches simply means that trade between nations is easier to do. If it didn't, it would no longer be as viable as a banking institution. It's very different to a clothing label subsidised by the government that opens up a branch in Tailand for cheep workers while still getting kickbacks from the government.

Admittedly Australia doesn't have too many multinational GBE's bar the Commonwealth bank and Telstra (still majority held until later this year), but look at places like France and China. Very different story.

[Salvation122]

This has been a very informative thread. Thanks, guys.

[Crazy Elf]

Johnny, care to name some then?

[Johnny the Bull]

Johnny, care to name some then?

French and/or Chinese government owned multinationals?

[Johnny the Bull]

Off the top of my head:

Total-Fina-Elf - Oil and Gas, owned by the French government. One of the largest refiners of oil in the world.
Gaz De France - State owned natural gas company,operating in the nordic countries, Western Europe and the UK

China:
Sinopec
China National Petroleum Company
State Power
First Auto
China Mobile
China Aerospace Science & Technology Group

With a futher 196 companies key to the national interest of China that may be privatised in the future but will always be majority controlled by the Chinese government.

[Crazy Elf]

Now do they get subsidised by the government in a way that violates WTO standards?

[Johnny the Bull]

Now do they get subsidised by the government in a way that violates WTO standards?

That I don't know. Can't read french or Chinese, so I can't go through the source documents, and I can't find any media on it. I can say that the general trend for the Chinese and the French is to bail out companies they own that provide essential services but I can't be sure whether any of these companies in particular get bailed.

[FlakJacket]

Now do they get subsidised by the government in a way that violates WTO standards?

Well with the Chinese companies the government will often 'encourage' the local national banks to extend large loans to loss making state owned companies even though they'd have no chance of getting one normally. This is what has severly fucked with the banking sector and is forcing the government to throw money at the problem now since they're trying to get things in order before trying to take a number of banks public.

[Anguirel]

I can say that the general trend for the Chinese and the French is to bail out companies they own that provide essential services

Which really isn't much different from the US bailing out various companies that provide services Americans think are essential -- you know, power, water, airplane travel cheaper than walking...