# It's time to establish trading blocks **URL:** \ **Category:** Great Debates\ **Created:** [October 5, 2010, 1:26pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111 "2010-10-05T13:26:47Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 5, 2010, 1:26pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/1 "2010-10-05T13:26:47Z")
I propose that the United States, Canada, Japan and Europe should end all trade barriers with each other and establish a Wastern block, and impose severe tariffs against (at the very least) China and India until they meet all of the following, which includes _but is not limited to_: 1. No currency pegging 2. Their wages rise to levels comparable to the Western block nations 3. They have full-on democracy (I’m not in favor of invading and “democratizing” them, but we do not have to trade with them either) (Obviously this primarily applies to China) 4. Institute rigorous pollution control laws on par with the Western block 5. Institute workplace safety laws on par with the Western block 6. Show a drastic decrease in their people’s habits of singling out baby girls for death or abandonment, and I mean all the way down to Western block levels (which are, compared to them, pretty much nil) (this obviously applies chiefly to China and India) 7. Respect Western intellectual property laws As for the Middle East if they can’t meet these conditions, I’m willing to accept a slower “phase-out” period where we move away from depending on them for oil. This would require knuckling down and accepting a move toward alternative fuels. If China gets ugly about it, default on all debt owed to them and cut them loose. Bite the bullet, take the economic punch to our noses, dust ourselves off, pick ourselves back up, and cut them off until they can meet I’d love to see how the so-called “BRIC” could economically wipe out the West in that scenario. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [October 5, 2010, 1:44pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/2 "2010-10-05T13:44:48Z")
> [@Le\_Jacquelope](#): > > If China gets ugly about it, default on all debt owed to them and cut them loose. What will you do when the Supreme Court tells you that this is in [direct violation of the Constitution](http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution)? Regards, Shodan ---
**Author:** ![voltaire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voltaire/32/313_2.png) [@voltaire](https://boards.straightdope.com/u/voltaire)\ **Post date:** [October 5, 2010, 2:00pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/3 "2010-10-05T14:00:12Z")
Why don’t you just Pit China and the rest of the developing world and let it all out at once without having to hold back? Because this reads more like a manifesto than a way to start off a debate… ---
**Author:** ![Giles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giles/32/60_2.png) [@Giles](https://boards.straightdope.com/u/Giles)\ **Post date:** [October 5, 2010, 2:14pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/4 "2010-10-05T14:14:33Z")
> [@Shodan](#): > > > [@Le\_Jacquelope](#): > > > > If China gets ugly about it, default on all debt owed to them and cut them loose. > > What will you do when the Supreme Court tells you that this is in [direct violation of the Constitution](http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution)? The other problem is that U.S. treasury bonds can be sold on the open market. If the U.S. stops payment to to Chinese holders, they can just be sold to someone else. The bottom would drop out of the market, as people bought them from China at a discount, rather than from the U.S. Treasury. How would the U.S. be able to fund its foreign wars without being able tpo sell bonds? ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 5, 2010, 2:22pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/5 "2010-10-05T14:22:02Z")
How is India supposed to et its wages up to Western levels without engaging in international trade with the countries that can actually buy stuff from them? ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [October 5, 2010, 2:29pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/6 "2010-10-05T14:29:34Z")
I have a suspicion that our French friend has given relatively less consideration to his economic suggestions beyond “let’s fuck the Chinese over”. Regards, Shodan ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 5, 2010, 2:34pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/7 "2010-10-05T14:34:36Z")
> [@Giles](#): > > The other problem is that U.S. treasury bonds can be sold on the open market. If the U.S. stops payment to to Chinese holders, they can just be sold to someone else. The bottom would drop out of the market, as people bought them from China at a discount, rather than from the U.S. Treasury. How would the U.S. be able to fund its foreign wars without being able tpo sell bonds? If the U.S. can’t fund ruinously expensive foreign wars that have nothing to do with defending the country, then I count that as an epic POSITIVE. In the past we managed to fund wars that were needed to defend us; what has changed that we cannot do that now? > [@RickJay](#): > > How is India supposed to et its wages up to Western levels without engaging in international trade with the countries that can actually buy stuff from them? How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? They have a market of one billion people. They can find a way just like we did.\* Heck, India and China have a space program, although China is further ahead. Hell, India could make alliances with the Middle East (oh my, wouldn’t that be difficult!) to control the oil supply and make life hard on that Western block. China is trying to do that much. India and China have been flirting at a [India-China](http://www.indiachinaonline.org/popup/9mou-ind-china.htm) tech alliance. In essence, they’ll do just fine. It would not be the end of the world for these countries. The West would not curb stomp them as a mere afterthought. We would have quite a challenge, especially if Russia is in their block and not ours. - Edited to add: they can develop a market of 1 billion people and make them prosperous just like everyone else in the West did. Added because I know they’re very poor right now. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [October 5, 2010, 2:36pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/8 "2010-10-05T14:36:17Z")
> [@Le\_Jacquelope](#): > > I propose that the United States, Canada, Japan and Europe should end all trade barriers with each other and establish a Wastern block, and impose severe tariffs against (at the very least) China and India until they meet all of the following, which includes _but is not limited to_: > … > 2) Their wages rise to levels comparable to the Western block nations Has it occurred to you that artificially lowering the hourly value of foreign labour is a _really_ stupid way of raising their wages? ---
**Author:** ![Giles](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/giles/32/60_2.png) [@Giles](https://boards.straightdope.com/u/Giles)\ **Post date:** [October 5, 2010, 2:39pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/9 "2010-10-05T14:39:31Z")
> [@Le\_Jacquelope](#): > > How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? They have a market of one billion people. They can find a way just like we did. Europe did is partly by having colonial empires – including India and China – to exploit. Canada and the U.S. did it by pushing out the native people of North America, and exploiting the resources they found there. Are you going to let China and India have similar resources, and where will you find them? ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [October 5, 2010, 2:44pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/10 "2010-10-05T14:44:22Z")
I agree with most of your post with regards to China. However, what’s the evidence for India’s engaging in #6 and #7: generalized sexism aside, I’m not aware of abandonment or selective abortions in India nor am I aware of rampant IP pirating. Come to think of it, I’m not aware of #1 either. Seems like India is mainly “guilty” of #2, with a little bit of #4 and #5, with a bit of protectionism thrown in as well. I’m not sure if it calls for such drastic measures in the case of India. Perhaps we could persuade them to increase their worker’s and environmental protections if they are not up to our standards. If this occurs where needed, then their natural rate of growth along with the increased productivity that comes from healthy workers and a clean environment will take care of the wage issue. But I would not oppose something like what you have proposed with regards to China. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 5, 2010, 2:47pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/11 "2010-10-05T14:47:46Z")
> [@Grumman](#): > > > [@Le\_Jacquelope](#): > > > > I propose that the United States, Canada, Japan and Europe should end all trade barriers with each other and establish a Wastern block, and impose severe tariffs against (at the very least) China and India until they meet all of the following, which includes _but is not limited to_: > > … > > 2) Their wages rise to levels comparable to the Western block nations > > Has it occurred to you that artificially lowering the hourly value of foreign labour is a _really_ stupid way of raising their wages? Please explain how this plan would “artificially lower the hourly value of foreign labour”. > [@Giles](#): > > > [@Le\_Jacquelope](#): > > > > How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? They have a market of one billion people. They can find a way just like we did. > > Europe did is partly by having colonial empires – including India and China – to exploit. Canada and the U.S. did it by pushing out the native people of North America, and exploiting the resources they found there. Are you going to let China and India have similar resources, and where will you find them? China, for one, is [moving into Africa](http://www.heritage.org/Research/Reports/2006/02/Chinas-Influence-in-Africa-Implications-for-the-United-States) in search of resources. China is [running around the world](http://www.foreignaffairs.com/articles/61017/david-zweig-and-bi-jianhai/chinas-global-hunt-for-energy) looking for resources. Do those examples count? I’m certainly not calling for war against China to push them out of Africa (I wonder when the Africans will wake up and get tired of the world exploiting them, though), they’re free to go hunting wherever they can and back it up with the PLA if they can muster the ability to. On a side note: one part of your sentiment is correct. That was a pretty damned shitty thing to do to the native people of North America. No one can deny that India and China are getting some karmic payback. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [October 5, 2010, 2:51pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/12 "2010-10-05T14:51:43Z")
> [@Le\_Jacquelope](#): > > On a side note: one part of your sentiment is correct. That was a pretty damned shitty thing to do to the native people of North America. No one can deny that India and China are getting some karmic payback. Wha’? China and India are being punished for how Native Americans were treated? Payback is a bitch, certainly, but I didn’t know she was an idiot as well. Regards, Shodan ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 5, 2010, 2:55pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/13 "2010-10-05T14:55:06Z")
> [@Le\_Jacquelope](#): > > How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? It took us centuries, and we helped ourselves to the resources of the very countries you now want to block out. ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [October 5, 2010, 3:14pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/14 "2010-10-05T15:14:32Z")
> [@Le\_Jacquelope](#): > > How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? > [@](#): > > Edited to add: they can develop a market of 1 billion people and make them prosperous just like everyone else in the West did. Added because I know they’re very poor right now. They are doing it exactly the way we did it, by erecting protective market barriers, by infringing foreigners’ intellectual property, by polluting freely, by exploiting our workers with low wages and dangerous working conditions, etc. For several decades, this country’s government was engaged in ongoing armed street battles against the country’s workers. It seems like China and India haven’t had to resort to such measures yet. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 5, 2010, 3:22pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/15 "2010-10-05T15:22:13Z")
> [@Ludovic](#): > > I agree with most of your post with regards to China. However, what’s the evidence for India’s engaging in #6 and #7: generalized sexism aside, I’m not aware of abandonment or selective abortions in India nor am I aware of rampant IP pirating. [China pegging its currency to our dollar](http://www.marketwatch.com/story/geithner-takes-strong-stand-on-china-currency-2010-06-10?pagenumber=1). [It’s a big issue](http://www.washingtonpost.com/wp-dyn/content/article/2005/05/10/AR2005051001460.html) with America, too. [Sex selective abortions in India](http://www.nytimes.com/2007/07/15/world/asia/15india.html), or at least India’s attempts to outlaw it. [More](http://www.csmonitor.com/Commentary/Opinion/2009/1014/p09s01-coop.html) on the subject. [In case the other links](http://www.merinews.com/article/female-foeticide-abortion-and-infanticide-in-india/135929.shtml) go 404 for some reason. [Some info](http://www.copyright.gov/docs/regstat052505.html) on the IP piracy problem in China. [More info](http://www.pbs.org/newshour/bb/asia/july-dec05/china_10-13.html) (less dry reading than the former). [Some sensationalized video](http://www.cbsnews.com/video/watch/?id=3467568n) about the subject. [One last article](http://www.nytimes.com/2009/04/28/technology/28cell.html). Intellectual piracy [India](http://www.insidecounsel.com/Issues/2007/November%202007/Pages/Intellectual-Property.aspx) is a big problem for US businesses. [Another link](http://www.caslon.com.au/ipguide27.htm). Software piracy in India [“down to 65%”](http://www.business-standard.com/india/storypage.php?autono=93942&tp=on). :eek: I’m looking for some links about pharmaceutical IP piracy in India at the moment, which is what delayed this post. Did I answer all your questions? If I missed something I’ll be glad to go back and dig. 🙂 > [@](#): > > I’m not sure if it calls for such drastic measures in the case of India. Perhaps we could persuade them to increase their worker’s and environmental protections if they are not up to our standards. If this occurs where needed, then their natural rate of growth along with the increased productivity that comes from healthy workers and a clean environment will take care of the wage issue. As “hypothetical supreme ruler of America” I’d be willing to consider such a compromise. > [@](#): > > But I would not oppose something like what you have proposed with regards to China. And it’s not a permanent, static block either. As they clean up their act I’d be willing to let them join. Take Japan, for instance. I thought long and hard about including them in that hypothetical block. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 5, 2010, 3:25pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/16 "2010-10-05T15:25:45Z")
> [@RickJay](#): > > > [@Le\_Jacquelope](#): > > > > How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? > > It took us centuries, and we helped ourselves to the resources of the very countries you now want to block out. > [@acsenray](#): > > > [@Le\_Jacquelope](#): > > > > How they do that is up to them, just like how the West did it was up to us. The West pulled itself up to prosperity, why can’t India? > > > [@](#): > > > > Edited to add: they can develop a market of 1 billion people and make them prosperous just like everyone else in the West did. Added because I know they’re very poor right now. > > They are doing it exactly the way we did it, by erecting protective market barriers, by infringing foreigners’ intellectual property, by polluting freely, by exploiting our workers with low wages and dangerous working conditions, etc. > > For several decades, this country’s government was engaged in ongoing armed street battles against the country’s workers. It seems like China and India haven’t had to resort to such measures yet. As I said, they’re free to pull themselves up like we did. To both of you, I do concede the point of karmic payback. America was a bunch of fracking wankers back in yesteryear. The Colonial Powers do deserve and are getting payback for their misdeeds. But no one knew any better back in the 1800s. The world knows better now; China for one has chosen not to take the better path. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [October 5, 2010, 3:27pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/17 "2010-10-05T15:27:07Z")
> [@Le\_Jacquelope](#): > > > [@Grumman](#): > > > > Has it occurred to you that artificially lowering the hourly value of foreign labour is a _really_ stupid way of raising their wages? > > Please explain how this plan would “artificially lower the hourly value of foreign labour”. Lets say you’re a worker in some 3rd/2nd world hellhole. In a single hour you can produce $10 worth of goods, or add $10 to the value of existing goods. Your boss pays a dollar of taxes when he sells those goods, giving him $9 to split between himself (for providing the environment and other resources you need to produce that $10 of value) and you (for doing the work). No matter what, your boss will not give you more than $9 per hour, or he’d be losing money by employing you. Now, imagine the country you export to puts a tariff in place. They’ll still buy $10 of goods, but they charge your customers $15 and pocket the difference. Less people will buy your product for $15 than they will for $10, which means some combination of reduced sales numbers and reduced prices will reach a new equilibrium - let’s say at $12, with $4 getting eaten up by tariffs and another dollar still going to taxes. Now instead of having $9 to split between you and your boss, he only has $7. Your hour of work is less valuable to him, so he can’t afford to pay you as much. _That’s_ why tariffs would artificially lower the value of a foreign worker’s labour. ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [October 5, 2010, 3:28pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/18 "2010-10-05T15:28:06Z")
> [@Le\_Jacquelope](#): > > But no one knew any better back in the 1800s. The world knows better now Pull the other one. ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [October 5, 2010, 3:52pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/19 "2010-10-05T15:52:36Z")
FYI, it’s usually spelled “trading bloc.” ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [October 5, 2010, 4:02pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/20 "2010-10-05T16:02:21Z")
> [@Grumman](#): > > > [@Le\_Jacquelope](#): > > > > Please explain how this plan would “artificially lower the hourly value of foreign labour”. > > Lets say you’re a worker in some 3rd/2nd world hellhole. In a single hour you can produce $10 worth of goods, or add $10 to the value of existing goods. Your boss pays a dollar of taxes when he sells those goods, giving him $9 to split between himself (for providing the environment and other resources you need to produce that $10 of value) and you (for doing the work). No matter what, your boss will not give you more than $9 per hour, or he’d be losing money by employing you. > > Now, imagine the country you export to puts a tariff in place. They’ll still buy $10 of goods, but they charge your customers $15 and pocket the difference. Less people will buy your product for $15 than they will for $10, which means some combination of reduced sales numbers and reduced prices will reach a new equilibrium - let’s say at $12, with $4 getting eaten up by tariffs and another dollar still going to taxes. Now instead of having $9 to split between you and your boss, he only has $7. Your hour of work is less valuable to him, so he can’t afford to pay you as much. > > _That’s_ why tariffs would artificially lower the value of a foreign worker’s labour. Okay, that makes sense. It results in an initial wage drop. So why not develop your own country’s domestic market so that your wages can rise? Doing so would result in their wages rising again. If this current real world economic crisis gets any worse the value of third world labor will plummet anyway because of currency devaluation. I’m not sure if any of my detractors will acknowledge this part, but my theory is not without historical precedent; China lost something around 20 million jobs in 2008 [because of this crisis](http://edition.cnn.com/2009/WORLD/asiapcf/02/02/china.jobs/?iref=mpstoryview). Frankly speaking I do not care if their wages tank; I am interested in protecting the wages of the Western Bloc (ok, hope that’s the actual correct spelling). I am absolutely positively all about protecting our standard of living and not letting others drag us down. The fact is, though, they can reverse that downward slide by developing their own market instead of siphoning jobs away from the West. That said, this is all karmic payback for the West’s exploitation, but at some point we have a right to stop getting our asses kicked over it. For the same reason whites don’t want to give up the country they took from Native Americans (I’m talking to you, RickJay). [Next page](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111.md?page=2)