Whatever happened to made in Mexico?

[aurelius]

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger[/url]

Global trades depends upon a global economy. Which is in the early stages of ceasing to function as it has the past few decades. China has been unwilling to play by the established international trade rules. This was by and large a minor disruption to the global economy. As China's economy has grown and China actions becoming aggressive, this disruption becomes a serious concern.

While I don't agree with Trump's particular strategy and execution, it was far past time the US played hardball with China. The idea was we could simply make deals with them and ignore their blatant disregard for the rules and China would 'grow up' and learn that playing ball was the best deal for all involved. They didn't.

Add to that China is militarizing the South Sea, has a stated goal to build a US beating military by 2035 (and many in China think it could already beat the US in a war), and we have a pretty classic recipe for a war. China will control the South Seas and they will end the free passage of trade that currently exists in that very important region of world trade.

The US needs to accept global free trade is not going to happen with the present players at the table. The US needs to start uncoupling itself from China. And needs to reconfigure the economy to work with Europe and Americas. The US now allows the Chinese (through Chinese corporations) to own important pieces of infrastructure such as ports of entry in the US. That is insane. US needs to end that now. Even it if means nationalizing. Another focus should be on Mexico and then central/South America. The US should throw considerable resources into stabilizing these region. It starts with ending the so called war against drugs. And be willing to use military options where we have partners on the ground. Focus on assisting in building infrastructure. The US has done little to take advantage of Central America and the entire continent of South America. We should emulate the Chinese's belt and road initiative in South America. The US should also throw considerable investment into automated manufacturing Stateside. These would have the double benefit of becoming more independent and cutting the Chinese legs out from underneath them.

We can fight world war 3 after giving the Chinese the money to build a custom built military to beat ours. Or we can stop funding their war machine and force them to come to heel now.

[quark]

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger[/url]

Global trades depends upon a global economy. Which is in the early stages of ceasing to function as it has the past few decades. China has been unwilling to play by the established international trade rules. This was by and large a minor disruption to the global economy. As China's economy has grown and China actions becoming aggressive, this disruption becomes a serious concern.

While I don't agree with Trump's particular strategy and execution, it was far past time the US played hardball with China. The idea was we could simply make deals with them and ignore their blatant disregard for the rules and China would 'grow up' and learn that playing ball was the best deal for all involved. They didn't.

Specifically, which rules and what is it that China has been doing that's against those rules? How has this hurt the US, consumers and producers?

[OrderInChaos]

Specifically, which rules and what is it that China has been doing that's against those rules? How has this hurt the US, consumers and producers?

I bet Aur is referring at least in part to IP theft and mimicry and counterfeiting which they've gotten really good at which undercuts producers elsewhere and gives China such a cut that eventually OG industries die out from the pressure. Undoubtedly much more than that but it's a start

[aurelius]

Specifically, which rules and what is it that China has been doing that's against those rules? How has this hurt the US, consumers and producers?

Off the top of my head:
-Intellectual property theft. This is the big one. China has been stealing US IP for decades. Technology is the most important part of the US economy.
China does not get where it is today without stealing US IP.
-China does not allow open access to its markets and forces companies to give their technology to them for access.
-China manipulates their currency and lies about it.
-China restricts foreign investment in their country.
-China maintained a 10% import tariff (they reduced it from 40%) after they joined the WTO. This partly explains why there is a trade discrepancy. The other is
-knockoffs. Chinese does nothing to police outright brand and product mimicry within its borders. Chinese companies copy foreign products who can't compete because of the tariffs.

Any attempt to address these issues with China has been met with denials and threats.

As to how has this hurt the US economy, the estimated cost to the US economy from Chinese IP theft is ~250 billion to 600 billion annually. It has been nearly 2 decades since China joined the WTO: that is trillions of dollars China has stolen from the US economy. Which China has used to buy US assets to further their aim of economic disruption. To put that into perspective, depending on the year that could be the entire annual budget for the US military per year. The entire 10-year Iraq war cost ~2.5 trillion.

As to how does this hurt the US consumer: terrible question. It implies that simply buying low cost goods is in and of itself the end goal of an economy. Which it is not. The Chinese flood US markets with cheap goods while denying access to their markets to US producers through tariffs or simple denial. This means US companies cannot compete on equal footing. This is intentional. The push to manufacturing in China is much more complex and deliberate than cheap labor. Drive through small town America or the urban centers and look at their vacant industrial zones. Look at the growing wealth inequality which this certainly plays a factor. There is your impact to the average American.

China does not want to be player or even the biggest player in world trade. It wants to dominate world trade. Just look at their belt and road initiative. Talk about a Trojan Horse.

[Allentown]

Couldn't people just buy the US IP products instead?

[aurelius]

Couldn't people just buy the US IP products instead?

In the US, where IP rights are enforced and WTO rules followed, people do.

Not in China. China does not enforce IP rights of foreign firms. China has tariffs on imported goods. China outright denies access to their markets to many foreign firms.

And this side steps that the Chinese companies STOLE a foreign entities IP. They didn't create a competing product. They stole the IP and technology.

[omaniphil]

china rant

yes to all of it.

I'm generally a free marketeer and think trade barriers should come down, and that we benefit from globalization. I think the specifics of how Trump is going about the trade-war with China is a disaster, but I am in total agreement that something has to be done about China's completely perverted unfair trade practices, especially the IP theft.

I think the decoupling of our economy and China has already begun. I've read that tech companies and other manufacturing companies are starting to look elsewhere to invest in growth - partially due to pressure from Washington and tariffs, but also since China is also quickly becoming not the cheapest place around anymore. I'd love to see more investment in India, Africa, and other southeast Asian countries in order to diversify the trade portfolio.

https://www.cnbc.com/2019/09/01/trump-o ... -have.html

[quark]

A free marketer should not support extensive patents, copyrights and other IP protections. These are government granted monopolies, not the workings of an unfettered free market.

As with any other restriction on competition, these protections increase costs for consumers. They are a deadweight loss to society, at least according to classical economics.

Are these laws necessary to spur production? Things are being produced despite whatever the Chinese are doing, a large part of which is allowing access to their markets in return for IP - no one is forced to deal with China.

China hasn't been the cheapest place for quite some time. They are a massive market and have built up infrastructure, expertise and supply chains.

[omaniphil]

A free marketer should not support extensive patents, copyrights and other IP protections.

I'm a patent attorney, so I'm inclined to disagree, but not just out of professional interest. I'm at work, and don't really have time to get into a lengthy essay on why I disagree, but suffice it to say, I don't believe that supporting a free-market means that I don't think it should necessarily be "unfettered".

I think there is a value in having IP schemes to help promote innovation and creativity. I also like a level playing field, low barriers to trade, and efficient allocation of resources.

[JonA]

A free marketer should not support extensive patents, copyrights and other IP protections. These are government granted monopolies, not the workings of an unfettered free market.

Free market != black market. Free markets by definition require things like property rights and contractual enforcement.

[aurelius]

A free marketer should not support extensive patents, copyrights and other IP protections. These are government granted monopolies, not the workings of an unfettered free market.

Economies without strong property rights don't work. This is not a concept up for debate but universally accepted in the professional economic community. See any modern first world country. Also, for a counter example see Somalia.

And except for really far out their non-serious people, it has long been recognized that government intervention plays an important role and is necessary in free market economies.

As with any other restriction on competition, these protections increase costs for consumers. They are a deadweight loss to society, at least according to classical economics.

Classical economics is interesting and introduced ground breaking concepts. But let's not limit ourselves to a philosophy from the mid 18th century. Nor confuse the philosophy of classical economics with the science of modern economics. There have been over 250 years of study, data, and analysis since Adam Smith introduced his philosophy.

The theft of US IP is not a deadweight loss to society. Real resources are expended on research and development of IP. Systemic IP theft results in much lower to no return on investment. If property rights are weak/not enforced, there is little to no investment in the economy. That is a death spiral.

Are these laws necessary to spur production?

Yes. Again, strong property rights are unambiguously recognized as a requirement for a modern economy.

Things are being produced despite whatever the Chinese are doing, a large part of which is allowing access to their markets in return for IP - no one is forced to deal with China.

I provided many examples. So the fact there is manufacturing outside of China means what exactly?

Companies are notoriously short sighted and open to taking risk. Especially when they feel the government will bail them out. The US government has a responsibility to take a much longer view and reduce risk. 'Giving' US IP (technology) to China is not in the US's long term best interest. Especially specific technologies. The US needs a comprehensive plan to maintain its technological innovation and part of that is protecting IP abroad.

You asked what rules China was breaking. Those are rules in the WTO, an organization China CHOSE to join in 2001. And they chose to join it for access to international markets and the protections their IP would receive from the WTO member nations. It is now evident China had no intention of reciprocating that access and protection to other countries.

[hsilman]

Also, for a counter example see Somalia.

But they have radios, don't they?

[DoctorWho]

Mexico and Canada have a distance advantage for trading with the US, but that may not be as big an advantage as it once was. Something that has made a major difference in global trade is the shipping container, which made it much cheaper to ship things and therefore made distance less important. The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

Great book.

[DoctorWho]

A free marketer should not support extensive patents, copyrights and other IP protections. These are government granted monopolies, not the workings of an unfettered free market.

As with any other restriction on competition, these protections increase costs for consumers. They are a deadweight loss to society, at least according to classical economics.

Are these laws necessary to spur production? Things are being produced despite whatever the Chinese are doing, a large part of which is allowing access to their markets in return for IP - no one is forced to deal with China.

China hasn't been the cheapest place for quite some time. They are a massive market and have built up infrastructure, expertise and supply chains.

I agree with @omaniphil and @JonA comments, but add that this isn't really accurate -- much more than saying a "free marketer" should not support a functioning court system to enforce contracts or prohibit fraud or, say, stop someone from disclosing trade secrets.

There is an argument that patents don't "promote progress" in some areas (thinking software), but calling the patent system "deadweight loss to society" is out there.

And IP laws aren't supposed to "spur production" (they don't make hair curly either).


The conventional wisdom, at the time China was given most favored nations status in trade treaties, was that economic advances and trade would make China more like the US. It's now looking not only wrong, but that it's more like it's making the US more like China.
In a place were just about everything is under the watchful eye of the government, China exports fentanyl to the US, and then ingredients to home brew it. Then it's sprinkled into pills or added to heroin by US idiots, causing massive increase in ODs in the US. (We are not blameless in this, but the craven conduct of China, along with the rest of the crap is too much.)

[cgeorg]

Mexico and Canada have a distance advantage for trading with the US, but that may not be as big an advantage as it once was. Something that has made a major difference in global trade is the shipping container, which made it much cheaper to ship things and therefore made distance less important. The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger

Great book.

You might find this interesting
https://www.psychologytoday.com/us/blog ... x-more-box

[aurelius]

But they have radios, don't they?

That they do! One per village.

[quark]

How did we ever get fire, the wheel, the alphabet, movable type, gunpowder, etc., etc. without IP protection? It's not essential for innovation. There are also other ways to fund innovation besides the current US system. Prize systems and publicly funded research are among many possibilities. Or consider http://cepr.net/images/stories/reports/ ... 017-07.pdf

I have no problem with property rights generally. I do have a problem with IP specifically under current US law. How long should IP be protected in a free market? What should be covered? IP laws are a matter of policy choice, not some fact of nature

Theft is an interesting word for actions in another country that are consistent with the laws of that country. If China made it a crime to compare its leader to Winnier the Pooh, should US persons be prosecuted if they did that?

[DoctorWho]

How did we ever get fire, the wheel, the alphabet, movable type, gunpowder, etc., etc. without IP protection? It's not essential for innovation. There are also other ways to fund innovation besides the current US system. Prize systems and publicly funded research are among many possibilities. Or consider http://cepr.net/images/stories/reports/ ... 017-07.pdf

I have no problem with property rights generally. I do have a problem with IP specifically under current US law. How long should IP be protected in a free market? What should be covered? IP laws are a matter of policy choice, not some fact of nature

Theft is an interesting word for actions in another country that are consistent with the laws of that country. If China made it a crime to compare its leader to Winnier the Pooh, should US persons be prosecuted if they did that?

Is quark trolling?

PS. My guess is that there is something to the worry about China (that is, it's lovely government) putting spy chips in stuff.

PS. Do you like the way the DOS/windows market shook out in pre-antitrust-threat days, because that happened when the conventional wisdom that software per se is not patentable. Microsoft was hated and almost split in three because of it, when small companies without IP protection (that is, only copyright) were just killed.

If someone with memory in the software industry would check my work above, I would appreciate it. It's a good anecdote if it's accurate. Any good comparisons in software in the past couple of decades? Would the browser markets be a good contra comparison?

[cgeorg]

Theft is an interesting word for actions in another country that are consistent with the laws of that country. If China made it a crime to compare its leader to Winnier the Pooh, should US persons be prosecuted if they did that?

That's what treaties are for, like the TPP (there was some bad DRM stuff in there but had IP protections)

[aurelius]

How did we ever get fire, the wheel, the alphabet, movable type, gunpowder, etc., etc. without IP protection?

Nonsensical statement that has no bearing on modern economies and ignores hundreds of years of history when modern economies emerged.

It's not essential for innovation.

Please produce a list of the most innovative and subsequently prosperous economies over the past 200 years. These economies will all have strong property rights. Please review the how and why the strong property rights evolved overtime in these countries.

There are also other ways to fund innovation besides the current US system. Prize systems and publicly funded research are among many possibilities.

Already being done on a massive scale in the US.

I have no problem with property rights generally. I do have a problem with IP specifically under current US law. How long should IP be protected in a free market? What should be covered?

property rights and IP rights are a balancing act. Must balance incentivizing innovation by guaranteeing a return on investment with allowing competition. No perfect answer to these questions.

A lot of people have issue with the US laws regarding patents and copyrights. It is a patchwork system cobbled together by poorly written laws and court decisions in need of a major overhaul. Good luck getting Congress off its ass to do something about it. That is not the same as being against IP rights altogether.

IP laws are a matter of policy choice, not some fact of nature

No such thing. The only rights that exist are enforced by governments through threat and/or application of force. It is all made up. Go and assert your natural rights in Somalia. See how that works out.

Theft is an interesting word for actions in another country that are consistent with the laws of that country. If China made it a crime to compare its leader to Winnier the Pooh, should US persons be prosecuted if they did that?

theft is the action of stealing. Stealing means to take without permission or to pass of another's ideas as one's own. Yep, theft.

And China chose to join the WTO which has rules in place regarding IP. So I don't know why you are talking about Winnie the Pooh. And if it was up to China, yes. They would want people from all over the world extradited and punished for speaking out against them.