angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 Supply and demand. When world demand for oil goes up, so does the price in Canada. Food is another commodity, why do you think it would be different. Our producers will not invest in ramping up production for foreign markets if it is not worth their while. If it is, you will pay the same price as their other customers. You should go to Japan sometime. They are very picky consumers, they don't shop price as much as quality. I go to Japan once a month. I am well aware of their food habits. This analogy still does not work. Let's assume your premise is correct, which it isn't, but let's assume it's correct and that the Japanese's appetite for beef is one that has a higher standard and that Canada's current beef quality is worse. The Japanese look at what the Canadian industry offers. It's cheaper than their own Wagyu beef, but they go...nah, not interested. Doesn't meet our standards. NEXT.. Basically, under your premise, the Japanese will buy the cheapest quality beef that meets their needs. If Canadian beef isn't of that standard, even though it's cheaper, they won't buy it. If that means Canada will never be able to sell to Japan, the price of Canadian beef remains unchanged. If however, you take American beef and let's say it's the same quality, then if the American beef is cheaper, then the Canadian beef industry will be undercut. Again, the consumer always wins. A similar analogy is this. I'm a Mercedes guy. I'm into high end cars. Just because a Lexus is cheaper, doesn't mean that I buy a Lexus. Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 Basically, under your premise, the Japanese will buy the cheapest quality beef that meets their needs. If Canadian beef isn't of that standard, even though it's cheaper, they won't buy it. If that means Canada will never be able to sell to Japan, the price of Canadian beef remains unchanged. If however, you take American beef and let's say it's the same quality, then if the American beef is cheaper, then the Canadian beef industry will be undercut. Again, the consumer always wins. A similar analogy is this. I'm a Mercedes guy. I'm into high end cars. Just because a Lexus is cheaper, doesn't mean that I buy a Lexus. My premise is that our producers (and the Americans) will go after the high end market like Mercedes and Lexus because that's where the money is. You won't by a Lexus even though it is cheaper, the Japanese see it the same way, they buy what they want. Most people don't buy Mercedes and Lexus, they buy Fords, Chevs, Honda's and Toyota's. The price of those cars doesn't effect the price of Mercedes and Lexus, or the people who buy them. They don't give a shit so it has no effect on the price of Fords and Toyotas. The Japanese will eat Mercedes and Lexus and if you want to eat the same, you will pay what they are willing to pay and if you do go to Japan, you know how much that is. Quote "Never trust a man who has not a single redeeming vice". WSC
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 (edited) My premise is that our producers (and the Americans) will go after the high end market like Mercedes and Lexus because that's where the money is. You won't by a Lexus even though it is cheaper, the Japanese see it the same way, they buy what they want. Most people don't buy Mercedes and Lexus, they buy Fords, Chevs, Honda's and Toyota's. The price of those cars doesn't effect the price of Mercedes and Lexus, or the people who buy them. They don't give a shit so it has no effect on the price of Fords and Toyotas. The Japanese will eat Mercedes and Lexus and if you want to eat the same, you will pay what they are willing to pay and if you do go to Japan, you know how much that is. Again, another apples to oranges comparison. Does one really need a degree in economics to explain this? Let me try again. Let's assume, that ALL Canadian beef producers all go super high end (which it would never ever do) because the profits are very very high to address the Japanese market. Obviously, ALL producers would need to invest significant amounts of money in whatever they need to to improve quality (which would never happen because not every farmer has the $ to do so), but let's play along. Let's also assume we can change our weather - again, playing along. Let's say magically all of this happens, and we magically end up with amazing beef so we can sell to the Japanese... So where can we buy our crappy beef from then? Well obviously, not from Canada, but probably from the Americans. But wait, Americans also want in on this crazy profit beef thing. So they too, start to focus their attention to the Japanese. Uhh... UH OH. Everyone's going after the profit heavy Japanese market. So how do the Americans/Canadians compete? Back on price. Quality is up there, but those crazy profit margins start to decrease. As the British come in, the Chinese come in....BANG. Back to the same problem, profit margins squeezed, and then the Japanese get what they want. High quality beef at the lowest price. But then there will be a market need! Canadians will go....but, we want to only pay $6, I can't afford your $30 beef. So then again, supply and demand, we'll have a business that addresses that market. If that doesn't make sense, I don't know what will. You are talking about the ability to command a premium when two products are identical. In international trade, the beauty is the ability to command a premium decreases. (which is why things like free trade benefits consumers and forces business to compete like hell) Edited October 5, 2015 by angrypenguin Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 You are talking about the ability to command a premium when two products are identical. In international trade, the beauty is the ability to command a premium decreases. (which is why things like free trade benefits consumers and forces business to compete like hell) In an international market you pay the same as the consumer who is willing to pay the most for the same product, wherever he is. Quote "Never trust a man who has not a single redeeming vice". WSC
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 (edited) In an international market you pay the same as the consumer who is willing to pay the most for the same product, wherever he is. If I make something and I could sell it to you for $5 or $50, obviously I'm going to sell it to the person buying it for $50. But why would the person pay $50 for something that he could pay $5 for? [assuming the product is the same which is what you are assuming] I make good money, but that doesn't mean I go and piss it away and pay more than I have to for an identical product. Edited October 5, 2015 by angrypenguin Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 If I make something and I could sell it to you for $5 or $50, obviously I'm going to sell it to the person buying it for $50. But why would the person pay $50 for something that he could pay $5 for? [assuming the product is the same which is what you are assuming] I make good money, but that doesn't mean I go and piss it away and pay more than I have to for an identical product. Doesn't matter what you want to pay, you will pay what he wants to pay if you want to buy the same thing. That's how commodity markets work. Quote "Never trust a man who has not a single redeeming vice". WSC
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 Doesn't matter what you want to pay, you will pay what he wants to pay if you want to buy the same thing. That's how commodity markets work. I think I give up. What I'm saying is he will not want to pay for something that can be bought at a cheaper price. This is basic economics. Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 I think I give up. What I'm saying is he will not want to pay for something that can be bought at a cheaper price. This is basic economics. Doesn't matter if it is a cheaper price to him if it is a higher price than I want to pay. I pay $5 bucks a pound for a steak. We sign a trade deal. He goes from paying $10 bucks to $7 bucks. How much do you think I am going to pay in future? Quote "Never trust a man who has not a single redeeming vice". WSC
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 Doesn't matter if it is a cheaper price to him if it is a higher price than I want to pay. I pay $5 bucks a pound for a steak. We sign a trade deal. He goes from paying $10 bucks to $7 bucks. How much do you think I am going to pay in future? This post makes absolutely no sense. I can't even figure out if you're trolling at this point because it defies all logic. Under a free trade agreement, you would pay $5 or less. Period. If at this point you still don't get it, please reread my earlier posts. I've spent enough time and energy on this. Quote My views are my own and not those of my employer.
ReeferMadness Posted October 5, 2015 Report Posted October 5, 2015 Wow, it's truly a miracle. Everybody wins. Praise the Lord. It's a miracle. Quote Unlimited economic growth has the marvelous quality of stilling discontent while preserving privilege, a fact that has not gone unnoticed among liberal economists. - Noam Chomsky It is difficult to get a man to understand something, when his salary depends on his not understanding it. - Upton Sinclair
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 (edited) Wow, it's truly a miracle. Everybody wins. Praise the Lord. It's a miracle. No, the dairy farmers in Canada and the auto sector in Canada will lose if this goes through. It's up to the government at that point to help by way of $ transfers as they cry foul for not being competitive in a global market. This is the same thing that happened to the Atlantic fisheries when the free trade agreement went through in Europe. Edited October 5, 2015 by angrypenguin Quote My views are my own and not those of my employer.
Michael Hardner Posted October 5, 2015 Report Posted October 5, 2015 This is economic orthodoxy and yet it can't be discussed publicly. I find that so strange. Quote Looks like someone has a new patronizing catch phrase ! Michael Hardner
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 (edited) This is economic orthodoxy and yet it can't be discussed publicly. I find that so strange. What country has given up their bargaining power by discussing this publicly (on points where it would impact their negotiating power)? This is Negotiations 101. As someone who has discussed multi billion $ deals internationally for my employer (who does almost a trillion $ a year in gross revenue), the accusation that our government is an idiot because they haven't made this stuff public makes me roll my eyes. EDIT: News conference on TPP cancelled until tomorrow morning. Edited October 5, 2015 by angrypenguin Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 This post makes absolutely no sense. I can't even figure out if you're trolling at this point because it defies all logic. Under a free trade agreement, you would pay $5 or less. Period. If at this point you still don't get it, please reread my earlier posts. I've spent enough time and energy on this. Why should you pay $5 when some other guy is willing to pay seven. He is paying 30% less and happy to do so. His concern is what he pays, not you. You have the supply side down, it's too bad you can't get a grasp on effect demand has on prices. Interesting, considering the hammering commodity prices are taking these days. Quote "Never trust a man who has not a single redeeming vice". WSC
Wilber Posted October 5, 2015 Report Posted October 5, 2015 No, the dairy farmers in Canada and the auto sector in Canada will lose if this goes through. It's up to the government at that point to help by way of $ transfers as they cry foul for not being competitive in a global market. This is the same thing that happened to the Atlantic fisheries when the free trade agreement went through in Europe. So you are OK with direct subsidies to farmers if necessary? Quote "Never trust a man who has not a single redeeming vice". WSC
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 (edited) So you are OK with direct subsidies to farmers if necessary? No, if it were up to me, I'd tell the farmers and the auto industry to pound sand and let them go out of business. That is precisely why I could never cut it as a public official. Why should you pay $5 when some other guy is willing to pay seven. He is paying 30% less and happy to do so. His concern is what he pays, not you. You have the supply side down, it's too bad you can't get a grasp on effect demand has on prices. Interesting, considering the hammering commodity prices are taking these days. As I said, I give up. I don't enjoy in engaging in public attacks, and so I won't, because that's what I want to do at this point. So i'll bite my tongue and move on. Edited October 5, 2015 by angrypenguin Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 No, if it were up to me, I'd tell the farmers and the auto industry to pound sand and let them go out of business. That is precisely why I could never cut it as a public official. As I said, I give up. I don't enjoy in engaging in public attacks, and so I won't, because that's what I want to do at this point. So i'll bite my tongue and move on. Good thing. Have a nice day. Quote "Never trust a man who has not a single redeeming vice". WSC
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 Good thing. Have a nice day. You as well! Quote My views are my own and not those of my employer.
Michael Hardner Posted October 5, 2015 Report Posted October 5, 2015 What country has given up their bargaining power by discussing this publicly (on points where it would impact their negotiating power)? This is Negotiations 101. As someone who has discussed multi billion $ deals internationally for my employer (who does almost a trillion $ a year in gross revenue), the accusation that our government is an idiot because they haven't made this stuff public makes me roll my eyes. EDIT: News conference on TPP cancelled until tomorrow morning. I have never heard it stated that way. Public negotiations undercut bargaining position ? Why wouldn't they admit THAT ? Quote Looks like someone has a new patronizing catch phrase ! Michael Hardner
Michael Hardner Posted October 5, 2015 Report Posted October 5, 2015 Why should you pay $5 when some other guy is willing to pay seven. He is paying 30% less and happy to do so. His concern is what he pays, not you. You have the supply side down, it's too bad you can't get a grasp on effect demand has on prices. Interesting, considering the hammering commodity prices are taking these days. I think there was already an example given of Americans paying less for something than Canadians. The same drugs are sold in Canada for less than in the US. Pricing is tricky business, is the answer. Quote Looks like someone has a new patronizing catch phrase ! Michael Hardner
angrypenguin Posted October 5, 2015 Report Posted October 5, 2015 (edited) I have never heard it stated that way. Public negotiations undercut bargaining position ? Why wouldn't they admit THAT ? Because in my opinion, it's common sense, but it's degrading to the public to mention such a thing. For example, if you and I are negotiating something, and I then go to my country and then I say "hey everyone, this is how I screwed over Mr. Hardner and these are all the great things that I negotiated for us" at your cost... think about that. Does that help my negotiating power? No. This is why no countries that are part of the TPP have told their country how they have advanced their country's needs ahead of others. Negotiations are sometimes a zero sum game. For one party to announce how they won at another's cost is pure stupidity (prior to signing the agreement) Edited October 5, 2015 by angrypenguin Quote My views are my own and not those of my employer.
Wilber Posted October 5, 2015 Report Posted October 5, 2015 I think there was already an example given of Americans paying less for something than Canadians. The same drugs are sold in Canada for less than in the US. Pricing is tricky business, is the answer. And yet the US has a supposedly free market in those drugs but in Canada, the provincial governments are the customers. Quote "Never trust a man who has not a single redeeming vice". WSC
Michael Hardner Posted October 5, 2015 Report Posted October 5, 2015 And yet the US has a supposedly free market in those drugs but in Canada, the provincial governments are the customers. It's not free - it's regulated by the US Government. Quote Looks like someone has a new patronizing catch phrase ! Michael Hardner
Wilber Posted October 5, 2015 Report Posted October 5, 2015 It's not free - it's regulated by the US Government. So why do they pay so much? Quote "Never trust a man who has not a single redeeming vice". WSC
Michael Hardner Posted October 5, 2015 Report Posted October 5, 2015 So why do they pay so much? My understanding is that the drug companies rationalize this against high costs of research and FDA compliance, but I'm not familiar with the landscape in that business. Edited to add: I don't think I used a good example above. In a market that is truly open, with more competition and less regulation, you'll have better price competition. Quote Looks like someone has a new patronizing catch phrase ! Michael Hardner
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