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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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yes, more protectionism will have side effects. All policy settings have unique policy advantages and consequences.

But what of agriculture where we are supposed to have a comparative advantage. By the day, our trade balance worsens, and many farmers have high levels of debt which would not offset any rise in land value over years as paying bills the bottom line.

do we simply allow foreigners or large corporations to buy all assets and keep industry going at their choosing.

Does Europe sit back and let China increase its share there of solar panels over 80% so that mercantile nation has total control of production? Sure there are pros and cons, but letting things just happen is just bs.

It is all about balance, that is why the Coalition will only partially listen to centre-right thinktanks who have their own particular bias which is only partially in touch with how the real world operates.

life and economics has a whole lot of players with different motivations and actions working at the same time, and smart govt policy (including by the West) should take all these variables into account, not simply follow an ideal because it sounds right.
Posted by Chris Lewis, Monday, 17 June 2013 4:16:04 PM
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Chris

Foreign students don’t displace local ones. They benefit our colleges and universities by contributing to fixed costs and increasing demand, allowing a wider range of subjects to be offered.

We have a comparative advantage in agriculture. We do not have a trade deficit, and we most certainly don’t have a deficit in agricultural goods:

http://ec.europa.eu/agriculture/analysis/tradepol/trade/trade-balances-main-players_en.pdf

As an exporting industry, agriculture is hurt by protectionism. Our protectionism raises input costs. Other countries’ protectionism makes it harder to export. As discussed above, I acknowledge that Australia’s farmers face serious problems. Lack of “protection” is not one of them.

You ask: “do we simply allow foreigners or large corporations to buy all assets and keep industry going at their choosing.” No we don’t. FIRB will not approve significant foreign investments if they are not in Australia’s national interest. But foreign investment is absolutely in Australia’s interest, because we do not as a country save enough to cover the cost of the investment we need. Australian business owners will behave exactly the same as foreign ones when it comes to running businesses – try to run them as profitably as possible, and close or sell them if they cannot be made profitable. We have no more power over domestic business owners than foreign ones (if anything, a little less), and no capacity to abolish the laws of business.

The EU’s decision to slap tariffs on imported solar panels will benefit German producers but hurt consumers across the EU, as well as related industries. However, in this case there may be a genuine case of predatory pricing rather than backdoor protectionism.

I agree that “life and economics has a whole lot of players with different motivations and actions working at the same time”. But not that “smart govt policy (including by the West) should take all these variables into account”. I know from bitter experience that government policy, however smart and well-intentioned, cannot possibly take all those different motivations and actions into account. That’s why, with some clear and well-known exceptions, markets are far better than government planners at optimising economic welfare
Posted by Rhian, Monday, 17 June 2013 4:53:52 PM
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but rhian, the EU's agricultural export-import ratio has remained similar since 2000 whereas Australia's has worsened greatly.
Posted by Chris Lewis, Wednesday, 19 June 2013 9:13:31 AM
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