Thursday, June 21, 2018

Trade War -- Getting to Zero Zero

Reducing trade restrictions feels a bit like "gettin' nekkid". It's the same thing as "taking off your clothes" except you know you're gonna be doing something you oughtn't. For a European that may sound silly, but Americans would understand the feeling and the humor of it.

I think there is uncertainty is how much product (in dollar, euro, yuan, renmimbi, peso etc.) might be sold into a market, so the effect of going Zero-Zero isn't entirely known. But, making the leap and trusting that business will appreciate more open markets and that we won't destroy ourselves has to be worth the effort.

It may become a bit more complicated when we face areas which law requires us to protect. For most parts of the world this would relate to food products, but it may relate to other things such as pesticides. Of course, national defense military type items aren't in the equation at all.

I think America has to take up Europe on the reduction of tariffs on transportation products and I would ask if both regions can go from that to including ALL manufactured goods. Both regions already serve their people with these goods, so the value of the market is quite large for the U.S. and Europe. I'm not sure it matters what the current trade numbers are. An open market should be worthwhile for both sides. Either side could add an asterisk to except for some kind of products which require restriction, such as pesticides and food products. On those areas there can be real negotiations to even the deal or to simply accept and ignore the restriction.

I'm not sure what kinds of restrictions there are in North America, but we've used NAFTA for several years and it has improved trade significantly. Is now the time to take the next leap and open the door further? Are there large areas of trade where we can go to Zero-Zero at once?

I hope the U.S. Trade Representative is paying attention to the trade numbers and present restrictions to help ensure any large reductions of barriers doesn't overstep important restrictions from America's point-of-view.

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