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Those leveling a duties will end up being losers. More and more corporations require not just international employees but consumers as well. Otherwise all you do is punish local consumers compared to others and lower local standard of living. The key to western world is basically being better at technology by the various system overall. Leading in technology takes more than being intelligent but freedom to think beyond bounds which many systems do not allow. Western world is way past where turning a screwdriver is needed with automation. It likely means more at the top supporting more at the bottom in time Just as we see now happening. Its more and more the case that at a point its not worth training some in new jobs at age and its starting to be many in mid 20's.That is more or less what wealth sharing advocates are getting at in reality.
TalentLost, how do you assess how many offshore employees are performing what tasks on behalf your hypothetical insurance company selling policies to USA residents?
If they were employees of your insurance company itself, the enterprise will not truly divulge such data as a basis for taxing the insurance company.
If the services were being provided by a contracting foreign enterprise, that contract would likely be based upon payments for completed tasks rather than upon numbers of workers or their job descriptions.
How the tasks are performed by how many employees and those employees’ job descriptions are proprietary information. The U.S. government cannot demand a foreign enterprise to divulge their company’s workings within their own nation.
If divulging such data would be contrary to the foreign enterprises’ clients interests, they are certainly not motivated to co-operate with our federal government; sovereign governments wouldn’t tolerate USA’s presumption of such rights.
Do you now recognize the difficulty of monitoring and regulating imported services that do not require any physical object to enter or depart from a domestic port?
Smoot–Hawley Tariff
Threats of retaliation began long before the bill was enacted into law in June 1930. As it passed the House of Representatives in May 1929, boycotts broke out and foreign governments moved to increase rates against American products.
The dutiable tariff level under the act was the highest in the U.S. in 100 years. The great majority of economists then and ever since view the Act, and the ensuing retaliatory tariffs by America's trading partners, as responsible for reducing American exports and imports by more than half.
Unemployment was at 8% in 1930 when the Smoot–Hawley tariff was passed, but the new law failed to lower it. The rate jumped to 16% in 1931, and 25% in 1932-33. U.S. imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decreased 61% from $5.4 billion to $2.1 billion. Thus, net exports declined from $1 billion to $600 million
According to government statistics, U.S. imports from Europe decreased from a 1929 high of $1,334 billion to just $390 million during 1932, while U.S. exports to Europe decreased from $2,341 billion in 1929 to $784 million in 1932. Overall, world trade decreased by some 66% between 1929 and 1934
Don't let me spoil it for you. But do you know what comes next when economies fail, countries cut each other off, and blame their internal problems on outside forces?
Last edited by Thatsright19; 06-26-2015 at 06:02 AM..
I never said foreign insurance companies are selling in America. I said domestic insurance companies are using foreign labor to service domestic policies. There is no trading going on. Responses need to address that issue. The issue is not about business all over the world trying to sell products or services to one another. It is about using foreign labor to reduce cost of their domestic service.
Again there is no trading going on. IBM knows exactly how many people they have working for them in Canada. Those people are not selling anything they are servicing what has already been sold by the domestic company. A very big difference. Because business are doing that it is displacing American service workers.
Thatright19, your response has nothing to do what I am saying. Again we are not trading products. I am not discussing how a foreign software company is selling into the US market. charging duty on labor supporting the domestic product by domestic companies is not the same as charging duties on foreign products.
I am talking about a domestic company using foreign labor to help reduce labor cost on servicing their product already sold by the domestic company to a domestic company or individual.
I never said foreign insurance companies are selling in America. I said domestic insurance companies are using foreign labor to service domestic policies. There is no trading going on. Responses need to address that issue. The issue is not about business all over the world trying to sell products or services to one another. It is about using foreign labor to reduce cost of their domestic service. ...
...your response has nothing to do what I am saying. Again we are not trading products. I am not discussing how a foreign software company is selling into the US market. charging duty on labor supporting the domestic product by domestic companies is not the same as charging duties on foreign products.
...I am talking about a domestic company using foreign labor to help reduce labor cost on servicing their product already sold by the domestic company to a domestic company or individual.
Talent Lost, I completely understood your post’s hypothetical insurance company operating within the USA was using foreign “back-office” labor within foreign locations. It is inconsequential as to where the insurance company claims to be headquartered.
(Note: Burger King is now or is attempting to headquarter abroad).
“Back-office” labor located on behalf of an enterprise’s USA operations are service products that are in effect imported into the USA. That’s exactly what I responded to.
We do agree that charging duty on foreign service products, (i.e. foreign labor) directly supporting domesticly produced goods and/or service products is not the same as charging duties upon imported goods.
Importation of almost all service products do not require any physical object to enter or depart from the importing nation’s ports.
Recognizing the extreme difficulty to monitor and/or to possibly regulate importation of service products, Import Certificate policy would only be applicable to goods; it cannot be applied to service products.
You are referring to but not responding to previous expansion of this explanation as applied to your hypothetical insurance company.
Why are you jumping from your hypothetical insurance company to IBM? You’re considering that a moving target is more difficult to hit?
If you do not believe duties would work then use tariffs, restrict domestic companies from using offshore labor to service domestic economy. We cannot have unrestricted tradeable services. All your issues can be resolved in trade agreements. You would be amazed on how much information the government collects on businesses working with foreign companies.
In product imports there is an ISF (Import Security Filing) that requires the importer to identify the actual manufacture that does the work (not where the order is placed) with the product classification (HTS codes), quantities, carrier and trucker that delivers to the export port and the trucker that picks up the container at destination port for first delivery in US. The US government will also go to the mfg facility to validate, they call that CTPAT certification. If they pass, the imports from that manufacturer will have a fast track into the US. If the carrier does not get an ISF clearance 3 days before shipping on any master bill of lading, goods cannot be loaded on the vessel.
That is the good part of trade agreements, the issues you have with gathering information would be resolved in the trade agreements. The WTO has already set up processes to discuss countries that are affected by tradeable services, however the WTO support unrestricted tradeable services between nations.
Those are the types of agreements that are in trade agreements, which is a good thing. The question is do you support the issue or are just against my remedy?
Thatright19, your response has nothing to do what I am saying. Again we are not trading products. I am not discussing how a foreign software company is selling into the US market. charging duty on labor supporting the domestic product by domestic companies is not the same as charging duties on foreign products.
I am talking about a domestic company using foreign labor to help reduce labor cost on servicing their product already sold by the domestic company to a domestic company or individual.
My response has everything to do with it. You think you can put up barriers and attack the viability of service jobs of another country without retaliatory measures?
Comparison between a tariffs and an Import Certificate policy.
TexDav and ThatsRight19, I’m a proponent of of a proposed Import Certificate policy for USA’s global trade. It is significantly superior to tariffs.
I just responded to your posts within the discussion thread of //www.city-data.com/forum/econo...-median-5.html .
Refer to Wikipedia’s “Import Certificates” article.
Respectfully, Supposn
TalentLost, I’m among the proponents for USA’s adopting a specific species of Import Certificate policy for conducting our foreign trade. I’m completely confident that our adoption of this unilateral policy would be to our nation’s best economic benefit. It would significantly reduce if not entirely eliminate our annual trade deficits of goods and would more than otherwise increase our numbers of jobs and median wage. Thus it would more than otherwise increase our GDP.
We concur that nations’ entire annual net aggregate trade deficits are net detrimental to their economies and both goods and service products are included within the aggregate products that compose those trade deficits.
You contend that we can reasonably monitor and possibly eliminate any possible trade deficit of imported service products. Most imported service products are or can be in the form of information that can be transmitted with nothing physical passing through national boundaries.
I contend that a democratic nation that upholds the concept of free speech cannot effectively monitor or regulate the importation of most, (if not all) service products for the purpose of collecting taxes based upon the values of those service products.
I chosen what you selected as an example, (i.e. I applied my arguments to the insurance industry).
Full Definition of DUTY
1: conduct due to parents and superiors : RESPECT
2a : obligatory tasks, conduct, service, or functions that arise from one's position (as in life or in a group)
b (1) : assigned service or business (2) : active military service (3) : a period of being on duty
3a : a moral or legal obligation
b : the force of moral obligation 4: TAX; especially : a tax on imports
5a : WORK 1a
b (1) : the service required (as of an electric machine) under specified conditions (2) : functional application : USE <got double duty out of the trip> (3) : use as a substitute <making the word doduty for the thing — Edward Sapir>
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