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Comment by econcon | Hacker News Reader

We need several fixes:

Force most countries to adopt freemarket, remove trade barriers, remove import and export duties (except for extreme situations like pandemic)

Right now lots of market imposes duties on import of American goods, this reduces American exports.

Some countries like India, Brazil play extremely unfair - this only helps few industrialists in these countries but overall public suffers usually as they are forced to buy substandard goods from local providers, instead of someone internationally competitive. But yes, it helps the politicians who usually get their money from those handful of those industrialists monopoly setup through import taxes.

In hyper competitive market, local producers will usually figure out the niches worth exploiting and they'll build long term advantage there rather than aiming for some generic niche where they've no competitive advantage.

This prevents countries like India or Brazil from becoming Taiwan

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>> 1. Force most countries to adopt freemarket, remove trade barriers, remove import and export duties (except for extreme situations like pandemic)

Who wants that? Just look at the US and the trade war. As soon it realizes it can't compete/lead in the said industry it declares it a national security issue, be it communications(5G) or raw materials. I don't even want to mention the millitary procurement or oil. It was never about a free market. It was always about a market ruled by the most powerful where everyone can make a buck but not too much.

this is very good point. "freedom" has always been chosen freedom by the ruling class, even in the u.s., and our system is no less authoritarian than any other. things are chosen for us much more than we'd like to admit.

>> even in the u.s., and our system is no less authoritarian than any other.

Of course is not true. You can't compare the US with NK or China. Proof is the simple fact that you could write that comment without being censored and/or thrown in a jail cell.

it is true for things that matter. of course in china, there are stricter rules for citizens on speech and writings.

however, who cares that i can tweet the president whatever i want within reason? is that freedom? i don't have any power or any effect.

in the u.s., politicians cannot say what they want. everything they say is couched in layers to appease others in government. a former presidential nominee is basically an outcast for voting in a well-reasoned manner against party lines. people have been removed from office for even being perceived to be going against the president.

don't equate choice of words and what products to buy with freedom.

if you watch the documentary hypernormalization by adam curtis, you'll see that the west has created a different kind of control. it's a sort of chaotic control. if you increase the chaos, you reduce people's ability to differentiate between truth and not truth, which in turn increases the ability to control and manipulate. in my opinion, this method of control is much more sinister because it hides behind "look how we free are" and a supposedly free media.

there is no one setup that defines all authoritarian powers.

>> however, who cares that i can tweet the president whatever i want within reason? is that freedom? i don't have any power or any effect.

I care. Of course it is freedom and it has power. Why do you think the authoritarian governments don't like it? What freedoms you have in China and not the US or Europe? Of course democracies are not perfect but they are a step forward compared with dictatorships. It's a big difference between manipulative politicans and dictators who put you in jail or even kill you if you don't agree with them.

What's the alternative? Every country should become island with no import or exports?

Politicians should understand that there are many things which can't be locally produced and penalising local businesses from importing those things from other countries is only going to disrupt the value add chain and lower their net exports.

This is something developing countries like India need to learn.

Get bad quality local machine = product crap quality end product = can no longer compete in international market = business goes bankrupt = local machine manufacturer is also dead in long term.

> What's the alternative? Every country should become island with no import or exports?

Reciprocity and fairness? Seems like a basic diplomatic concept but apparently it only applies to "important" countries who have enough leverage to warrant it. How can developing countries develop the leverage necessary to negotiate favorable trade agreements with established super powers like the US and Europe?

We need the ability to say "we don't actually need you but we're willing to entertain your proposal if we find it to our benefit". Anything less is actually exploitation. The fact the US can just send an aircraft carrier to somebody's coast to project some force prior to negotiations doesn't help, does it? It was never a level playing field.

You're saying like its one way. Why aren't you calling for the U.S. to stop the heavy subsidizing of its agriculture production and allow it to compete freely with other countries crops who want to export to the U.S.? Or should free market be only for the industries where the U.S. has an upper hand? Brazil and India can compete on crops and mining, but not on most manufactured goods. I'm all for lowering import taxes, but it should go both ways.

Well my personal opinion is that a few industries should be exempt from this and that includes agriculture.

> Force most countries to adopt freemarket, remove trade barriers, remove import and export duties

No thanks. I'd rather not have US laws imposed on my country via trade agreements just so it's easier for them to sell their stuff here. If they want to expand to our markets, they should have to establish a real presence here and play by our rules.

Also, import taxes don't matter much compared to currency fluctuations. I remember a time when USD 1 ≈ BRL 1.6, importing consumer goods was a relatively simple matter despite taxes. Today USD 1 = BRL 5.11 and prices have become prohibitive even without any taxes.

> Some countries like India, Brazil play extremely unfair - this only helps few industrialists in these countries but overall public suffers usually as they are forced to buy substandard goods from local providers, instead of someone internationally competitive.

I used to think that way but the truth is it was a massive gain for our industry. Computer technology was licensed from foreign companies and produced here. Only large scale computers could be imported. This is great and continues to this day: companies pay less taxes if they manufacture their products here instead of importing. Software was a similarly protected industry and that is part of the reason why Lua exists.

Japan, USA and many other countries employ protectionism to great effect but when we do it we get sanctions from the USA? Because they want "compensation" for the losses american companies suffered due to the policy? Where's our compensation for the american agricultural subsidies?

This is why so many people say trade agreements are just modern day imperialism. It's obvious who's being favored by the agreement.

> This prevents countries like India or Brazil from becoming Taiwan

Why should we want to become Taiwan? If anything we should want to be more like China: heavy industrialization, access to the intellectual property of established international players, sells directly to markets they couldn't care less about (like us), will one day be in a position to compete directly with if not undercut them, etc.

>I used to think that way but the truth is it was a massive gain for our industry

This is only good if you want to work for big government granted monopolies where you are just a cog in a big machine.

To create a culture of export and value addition, every person should have ability to import the best machine they can afford from abroad without government eating into budget through import taxes.

For example, imagine I am creating fishing line and I found that best way to go about is to import a German machine through which I will be able to create high quality fishing lines.

Government imposed 200% duty on German machinery and now my competitor who is in Singapore can easily import that machine because he isn't paying 200% import duty on importer machine.

How is my product going to be able to compete in international export market when my investment is already double of my competitor.

This is the process of niche discovery. Big companies are slow at finding new niches to exploit. Small companies can do the exploration work and if they find something which works, they can become future big companies.

And if I am not able to import German machine guess what I am going to do? I am going to import end product form someone who is able to create the end product at cheaper cost then put my label on top of it and sell locally. What did I learn? Just slap label, market and print money?

I gained no manufacturing expertise.

When you add useless import taxes, you increase import of "final product" over import of "intermediary product". This way your country can't add value and you fail to capture value from a supply chain

> This is only good if you want to work for big government granted monopolies where you are just a cog in a big machine.

People I met who lived in that era didn't describe it that way to me. They were prideful of what they'd accomplished.

> Government imposed 200% duty on German machinery and now my competitor who is in Singapore can easily import that machine because he isn't paying 200% import duty on importer machine.

Best way to deal with this is to get the local industry to reverse engineer the machine and produce a copy. Intellectual property be damned. This boosts local industry, improves the local economy, allows independent innovations, reduces the nation's dependence on foreign markets, etc.

Obviously, the established players don't want this. They want developing countries to buy their stuff instead of making their own. Intellectual property is the true government-mandated monopoly.

> How is my product going to be able to compete in international export market when my investment is already double of my competitor.

The point is to focus on the needs of your people first and foreigners second. The fact is companies don't care all that much about their secondary markets. I've seen products for sale here with labels printed in spanish: they didn't even care enough to create labels for us.

The trick is to make your own people your primary market. The US does this, Japan does this. Why should other countries be any different?

> I am going to import end product form someone who is able to create the end product at cheaper cost then put my label on top of it and sell locally. What did I learn? Just slap label, market and print money?

It's a lot easier to develop an existing industry than to create one out of nowhere. Industry could start by simply assembling parts. When the industrialists see a return on their investment, they can expand the scope of their operations and perform R&D.

Is this serious? It is exactly what led to the current situation.

When all you have is a neoliberal hammer...

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