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The Forum > Article Comments > Dumping on free trade > Comments

Dumping on free trade : Comments

By Stephen Kirchner, published 13/6/2013

Did anti-dumping laws help drive Ford Australia out of business?

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Rhian, functions like research are not services but the early part of
production. Marketing is a service as it does not produce anything.
It is an overhead, as necessary as it might be.
Some of IT would be overhead and some would be production.

I wonder how they define services ?
Posted by Bazz, Monday, 17 June 2013 7:49:26 AM
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Rhian, under free trade, we benefited from mining, while our other industries are in decline in relative terms. At the moment, thre is little growth from domestic sector.

Now illusion of reliance on mining is complicated, where do you think enough wealth will be created in production terms to pay for decent level of services.

One cannot really exist with other.

I see a lot of pain ahead. I see our society becoming more unequal, and I don't see either party offering much to meet our challenges, albeit as hard as solutions may be.

Certainly I don't see the CIS or IPA offering much, but the usual cut govt and get govt out of the way.

Will it work, like it did under the Howard govt? It wll be interesting now mining boom appears to have peaked. Now treasury looks to the housing sector for a domestic recovery.

The joke of Aust governance now goes on and on as limitations on debt growth by households emerges
Posted by Chris Lewis, Monday, 17 June 2013 8:51:38 AM
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Further on fuel etc, there is an interesting talk on Radio National
on the problem of fuel.

http://www.abc.net.au/radionational/programs/bigideas/australia27s-oil-vunerability/4565726

Well worth a listen.
Posted by Bazz, Monday, 17 June 2013 1:25:39 PM
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Chris and Bazz

Here are a couple of good articles that debunk the “manufacturing fallacy” – the idea that manufacturing is somehow more important than other industries, or should be given more government support. Services aren’t the icing on a cake of production industries. They are part of the cake.

By a leading UK business economist:
http://www.ft.com/intl/cms/s/0/a525e6dc-2cd9-11e2-9211-00144feabdc0.html#axzz2WRFh4rFT

By one of the world’s most prominent trade economists:
http://www.project-syndicate.org/commentary/the-manufacturing-fallacy

Chris
Most other industries declined relative to mining because mining grew so strongly. “Relative” decline is a mathematical inevitability when one sector is doing exceptionally well. In fact, in the past 5 years the sectors that have grown fastest are health care & social assistance (5.3%pa) and professional, scientific & technical services (5.7%pa). Mining grew at 4.8% pa and agriculture by 3.3%pa (trend data, real GVA, March 2008-March 2013).
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5206.0Mar%202013?OpenDocument (Table 7)

I also see challenges ahead, especially as the terms of trade start to fall. But some of the pressures on other industries might start to ease as the exchange rate falls with lower commodity prices.

The hard economic data (growth, employment, unemployment, inflation, real wages, consumption, investment, exports) still overwhelmingly show Australia’s economy outperforming virtually any other developed economy. The ball is in your court to show how protectionism would have made things even better
Posted by Rhian, Monday, 17 June 2013 1:33:28 PM
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Rhian, thanks for links, will look at them later.

I have always thought trade issues are tricky, albeit I am a supporter for trade (on the record).

I am not calling for protectionism, as in old days. The west has indeed been a leader in promoting trade, which has had benefits (and some consequences).

What I am suggesting is that Western countries were always going to struggle under freer trade, so how best can we remain supporters while ensuring we do enough not to dig our won graves.

As I have suggested before, we should spend less on welfare, and help aid our productive sectors rather than merely accepting their demise because of not having some supposed comparative advantage. This does not been decimating the social fabric, hut tinkering with a number o policy settings to achieve a better productive-consumption balance.

I agree answers are tough, and some pain probably needs to be inflicted, but I cant see how accepting more of the same is going to help Aust long term.

It is indeed a subject which requires much effort, by all.
Posted by Chris Lewis, Monday, 17 June 2013 3:49:17 PM
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I am not necessarily saying manufacturing is everything, albeit that a minority of nations dominate this source which represents two-thirds of global merchandise exports.

I could think of many ways to ensure that Aust has a high level of GDP per person without changing much. We could rely more and more on Chinese rich immigration and tourism, and make our universities even more reliant on international students, but what about the many ordinary Austs wishing to have a reasonable job, university or housing opportunity. As it stands, these basic expectations are getting harder by the day.

I only see more pain ahead for a growing minority, but I hope I am wrong.
Posted by Chris Lewis, Monday, 17 June 2013 4:01:21 PM
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