Microsoft Asks WTO Not to Impose Software Tariffs

Element5 writes "In an interesting story featured on Netscape's Netcenter Tech News, Microsoft is apparently trying to keep the WTO from imposing a duty fee for international online transactions."

Comments

microsoft, actually RIGHT about something?!

[apocalypse_now]

Probably not. But a continuation of the temporary ban could actually be beneficial for developing countries (who, remember, the WTO is supposed to benefit the most) by allowing them more unrestricted access to items - items with heavy duties tend not to make their way into countries with poor distribution networks or a small demand. However, in the end, the ban should be lifted, and the items should be taxed in the same manner as all international trades are.
--
Matt Singerman

Re:microsoft, actually RIGHT about something?!

[_ska]

The WTO isn't, never was, and never will be a benifit to develping countries. In fact, it isn't about benifit to any countries. The WTO is all about empowering corporations --- the largest benifit is to large multinationals.

Any statements (and we will probably here a lot of them next week) to the contrary are smoke & mirrors...

S.

Finally, something good coming out of Redmond...

[awkwardone]

It's about time that Microsoft came up with a good proposal for the World Trade Organisation (WTO) summit in Seattle this week.

Regulating international commerce via the Internet would be a rather tricky endeavour anyways. Sometimes, a company is based in one nation while that company's Web host is in another country. Attempting to impose import/export duties on online transactions would pose a great difficulty because the transaction takes place in a different country from the company's home country, and it must be shipped to yet *another* country (whew!). Microsoft's idea is a very good one, and I hope that the delegates at the summit will be open to it despite the legal troubles Microsoft is dealing with now.

So, Microsoft (the company) isn't all bad (excepting the fact that it's an abusive monopoly), but I still hate Windoze...

For more information about the World Trade Organisation (WTO) summit, visit oneworld.net for up-to-date news and views.

awkwardone

Explaination?

[Listerine]

Could someone be so nice as to explain what Microsoft is trying to ban? What does it mean software tarriffs? Thanks.

Knee-jerk reactions and more...

[MostlyHarmless]

The immediate reaction to any e-commerce tax is "heck no!". Of course we don't want governmental interference with this great electronic world. However, the same people who believe this (usually) believe that eventually technology will progress to the point where the whole world spends their entire time wired directly into the Internet in a utopia of communication. I, myself, subscribe to this view.

But stop and think for a moment. If in a thousand years we will spend our life wired up, then surely in a hundred we will do all our shopping online! But at this point, the government won't be able to collect sales tax because of our silly "moratorium" on Internet taxes. So why now do we shout "keep the Internet tax-free" when in a hundred years the government will be mired in debt due to our shortsightedness?

Re:Knee-jerk reactions and more...

[Hobbex]

Well, ask yourself how big government would need to be in that society. If everybody is directly wired to the Internet, would we need a government, or just a really good OS?

-
We cannot reason ourselves out of our basic irrationality. All we can do is learn the art of being irrational in a reasonable way.

Re:Knee-jerk reactions and more...

[awkwardone]

So why now do we shout "keep the Internet tax-free" when in a hundred years the government will be mired in debt due to our shortsightedness?

Somehow I don't think real-life person-to-person interactions and transactions are going away anytime soon. Some things *need* to be done in person, like depositing a paycheck. I, for one, would not want to buy golf clubs online because I want to check out how they feel and how well I can hit the ball with them before I buy them. Regardless of how much we can do online, people still like to talk to a human (especially when they call for technical support) ;o)

Even if face-to-face interaction *is* going away, this "moratorium" can always be lifted. Then, the government can tax to its heart's content. Until then, keeping Internet transactions tax-free is certainly the way to go.

awkwardone

Re:Knee-jerk reactions and more...

[DaveHowe]

But stop and think for a moment. If in a thousand years we will spend our life wired up, then surely in a hundred we will do all our shopping online! But at this point, the government won't be able to collect sales tax because of our silly "moratorium" on Internet taxes. So why now do we shout "keep the Internet tax-free" when in a hundred years the government will be mired in debt due to our shortsightedness?
I can't see the problem here - no-one is suggesting a permanent ban on RW goods and services; all they are suggesting is that purely electronic transactions (software and online services) are so difficult to track and police, the cost of doing so far exceeds the benefit to be gained. I would't be too surprised to see a "internet tax" taxing the right to use the internet, though. that would be wrong as well, but the government already taxes the right to receive radio waves here in .uk, so.....
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M$ Against Duties

[mmmmbeer]

Of course M$ is against duties on online transactions. First, it makes their products less expensive to consumers overseas. I guess that's not really a problem for them right now, but it could become one. But the real reason M$ doesn't want duties is because they don't want to deal with them. I work for an e-commerce company myself, and so I can tell you it will make things a lot easier for me if I don't have to worry about including duties in my pricing code. It would save my company a lot of time and money, too. Micro$oft just sees this as a way to save money, and as much as it surprises me to say this, I completely agree.

Double-speak

[nmos]

"He spoke out firmly against an EU proposal that would reclassify electronically delivered software as a service. Software has traditionally been classified as goods."

``It would be sort of stupid to see the same product classified differently whether it's delivered on a CD for example or delivered electronically. It's the same product we believe it should be treated equally and as goods,'' he said. "

Hasn't MS been saying all along that "your not buying the software, your licensing it's use". That sounds a lot more like a service than a product to me.

Maybe someone should pass this link on to the folks responsible for the latest UCITA fiasco:

http://www.badsoftware.com/

I'm sure they'd be interested in MS's change of heart.

Way to Go Microsoft (With a Caveat)

[thales]

Although I'm sure thier reasons may be different from mine, I offer a tip of the hat to Microsoft. I found myself mostly in agrement with the paragraph "Among the principles it proposed were that electronic commerce should not be subject to more onerous rules than those applied to traditional commerce and that any WTO agreement should not favor or freeze in place any particular technology." However I realize this could be a two edged sword. While it does allow for the propriatary standards that MS loves so much, Getting this into any agreement prevents open source from being frozen out in favor of (currentally) more popular software.

Do you people have any idea what this means?

[evilad]

I am in favour of a global economy, but a moratorium on tariffs means one more nail in the coffin of governmental control over the hypercorps. Microsoft isn't asking that governments work towards eliminating unreasonable barriers to international trade. They are asking that elected governments be categorically forced to allow unrestricted trade. They are lobbying for an overruling of the democratic principle in this one specific case that happens to strongly favour -- you got it, the hypercorps.

This is precisely what makes it possible for third-world wage-slavery to exist. This is what makes it possible for unnamed chemical companies to dump as much shit as they want into the water, so long as they do it in countries too poor to say no to the business. Odd how those same countries also tend to be too poor to buy their products, too.

Here is an example of why tariffs can be good. Canada can't impose strict environmental protection laws, because to do so would be to force some companies to produce in Mexico, which cannot afford strong environment laws for exactly the same reason. Canada loses the business, Mexico's environment gets polluted. Canada is then prohibited from imposing an "environmental tariff" on those same goods. That tariff would keep the company in Canada, locally producing goods for local consumption. If the locals think the pollution is too bad to justify the product, then they get to legislate it out of existence. That is what government is for.

An electronic transaction is no different than a phone call. If there is no good reason for import restrictions then let free market do as it will! But when there is a good reason, then somebody should make it clear that I am doing the world a disservice by purchasing that product.

A tariff will do this perfectly well, without prohibiting a damned thing.

This has been an unsponsored and uneducated rant. Flame away.

Figures

[Spazmoid]

That's all very interesting but how can they do that in good conscience(sp)? They are planning on charging a seat type fee for secure transictions using the next degeneration of IIS in W2K. Maybe they think that if people are charged duties for international transactions they will go with a cheaper web solution?

Once again my .02

Taxes? from where to where?

[DaveHowe]

I can't see how you could possibly keep track - for example, say bigsoftwarecorp.com sells a copy of superware V3 (tm) to an aol user at aol .com. ALL the following could be true:

1. bigsoftwarecorp.com is in the .com domain
2. bigsoftwarecorp.com's host is in New Zealand
3. bigsoftwarecorp.com has a download server in england that the software actually comes from (download.bigsoftware.com)
4. bigsoftwarecorp.com is actually an english company
5. john@aol.com is in the .com domain
6. john@aol.com registered in japan
7. john@aol.com is actually in england, and will be downloading and using the software there. so, which of the countries are entitled to duty? we are downloading from england to england, but the data is going to AOL's US server enroute...
   --

Re:Taxes? from where to where?

[DaveHowe]

How do you know that he didn't post his reply BEFORE the parent post was moderated up?
It's not good to assume things you can't prove.
It's not a problem - as far as I know, he hadn't posted his response yet, as there were no replies to the topic at all when I composed it. That said, I had to read the topic, then the link, then compose my message. I got id #32, he got #4, so he was "before" me; however, I suspect the only ones that beat him into the list were "first post"ers, even if two of them didn't use those words.
I didn't think it was worth worrying about - At worst, He would get a mod point that might have gone to me, but if his post was better, it deserved it, and it's not like I need the karma :+)
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Yeah, great...

[crayz]

...except that this is from Bill Gates, who, if he could, would probably have everyone paying him by the hour for everything they do on the net. I believe there was an article in Time or Newsweek where he said exactly that.

People would start up Windows, open IE, go through MSN to a website that in run off of WindowsNT, and they would pay MS a few pennies for every little thing they do.

The only reason Bill is against this version of the plan is that he doesn't get the money.

Thoughts

[wyv]

Disclaimer: These are just things to think about. The whole matter confuses me thoroughly, so I could be 100% wrong.

We discussed the WTO in my political science class last week. If I got the jist of it straight, the WTO is basically supposed to give underdeveloped countries the chance to develope.

Suppose that you've got a few big industrial nations that import raw materials from smaller, poorer countries. They take those materials and turn them into much more expensive goods. This way, they get lots of profit. The poor countries are stuck selling their cheap raw materials and importing expensive manufactured goods (created with the same materials they sold.) Thus they don't make enough money to start industrializing themselves, and it becomes a cycle.

The WTO is supposed to let the poor countries impose high tariffs on the manufactured goods from foreign nations. This way demand will be created for domestic industry to produce cheaper goods. With demand comes capital, and with capital comes industry. With industry comes being able to compete in the global marketplace.

But this is dealing with raw materials, like metals and food, etc. Does the same logic hold for non-material-based goods like software? After all, there is no "raw material" to create software, other than a compiler and good mind. I suppose this is what Microsoft, and many other software companies think. They think that the WTO does not need to impose tariffs to help the smaller countries, because there is nothing stopping the smaller countries from buying a few computers and creating there own software.. it's a lot cheaper and easier than building a factory to start an industry.

This is a reasonable argument, but it can also be said that countries underdeveloped in the electronics industry resign themselves to importing superior products from their more technological neighbors. Some could argue that by imposing (at least temporary) tariffs on software imports it would spur domestic interest in software development. As soon as the domestic software industry in these smaller countries gets on it's feet, the tariffs can gradually decrease as they become more competitive in the global software marketplace. So maybe tariffs wouldn't be that bad.

I'm not taking a stand either way. I'm Just thinking about it.

Taxes, etc.

[awkwardone]

We need less taxes and less stupid waste, not more taxes.

As Bob Dole, one-time Presidential candidate and now poster boy for Erectile Dysfunction and Viagra once said, "It's time for the government to pinch pennies instead of the American citizens!"

Our money goes towards some of the dumbest things. I heard something about government-sponsored studies to see what causes male sexual arousal or something like that... kind of a segue with the whole Bob Dole thing ;o)

oneworld.net - for all the latest WTO summit news.

awkwardone

The WTO isn't for the 3rd world.

[Forge]

Where I come from import duty is charged on the item at a percentage of the invoiced cost *or* the "true value" ( as determined by some bureaucrat ) and the tax collector can actually choose which one to use. You are of course allowed to fight it.

As an aside for computer stuff they use "Computer Shopper" as the reference and if they reject your invoice ( people do get forged invoices with lower prices ) you can look through the latest issue and suggest the lowest advertised price for each item.

Not a fare system by any means but lawmakers suck.

As to the WTO being "for the benefit of developing nations" that is such absolute bull I could laugh. Jamaica as a former colony of England ( up to 1962 ) has a special deal with England and some of her allies in Europe where they buy our Sugar and Banana at well over the market price. ( For 400 years they tacked everything earned hear so don't start with morality etc... ). The US took this deal before the WTO as unfair competition and won the 1st round. If this goes all the way before these crops are fazed out Jamaica will suffer real and immediate problems.

Not least of which is a massive jump in unemployment and a widening of the trade gap.

Good for them, there's not always a catch

[Mojojojo]

I'm not a big fan of Microsoft, but they're doing something here that is beneficial to everyone. There's no reason to cry foul. Contrary to popular belief, microcrap isn't all bad. Their software needs work, and their predatory tactics could definitely be changed. But this is in everyone's best interest, especially those who sell software to foreign markets. The last time I checked microsoft was selling quite a bit of software, so its in their best interest too remember.

I will go on to say that the problem with Microsoft is not necessarily their buggy software, but the fact that if you use it, you're better off having MS everything. Reason being: Windows works best with a total MS environment, no 3rd party software (this is desktop, MS's server stuff could use some work...Win2000 has the management features down pat, now they need to improve the quality of the back end). They make it hard to use other peoples stuff or other OSes in the network. They do this very well. They also make some quality desktop software and IE is only better than netscape now because it's more stable and the market it and make development a cinch so retards use it (classic MS marketting). Office is a pretty good office suite, but it has way too much shit in it. I prefer Abiword and Gnumeric myself, they are simle and have what you want to use (except bullets ;), not wacked out formatting. If I wanted that I'd get Adobe Acrobat Writer. I want the basic stuff: justification, spell check underline, bold, italics, font and font-sizing, cut paste, inserting pictures, the OLE stuff is good too. Anyways, Microsoft wants everything dealing with computers to go through them in some way or another, and hopefully the Judges ruling will force them to play nice with everyone else.

As far as I'm concerned with Microsoft, I think the best solution is not to open source them, though I think they need to open up the API's so other OSes on the Intel Platform can run Windows executables should the choose to add support for it. I don't think breaking them up would do any good either. I think they should be required to make it so that other operating systems can access Microsoft products too. The case is about the Desktop Monopoly. They don't have a Server monopoly, though were it not for Linux they probably would be really close, but now they're going to have to play nice with other OSes. They should be required to port Office and IE to competing platforms. Ah shit, I don't know, I'm not expressing what I'm trying to say very well, but I hope you get the point, that and I'm rambling on which doesn't help.

-Mojojojo

The WTO

[Sharks]

Does any of you know the power the WTO wields? They have this awesome power to pretty much shut down any economy they want to, and override any government they want to.

One little country decided to not import some goods that would be bad for a couple of reasons, and the WTO stepped right around it because it "hurt" their business.

The WTO shut down a law in New Jersey for the same reasons. The law conflicted with what the WTO wanted to do, and so it got rid of the law.

It has happened to the EU as well, concerning the decision not to import beef from the US. The WTO stepped in, and now Europe is importing beef from the US.

The reason for those governments giving in is simple. If they didn't, the WTO and all the supporting corporations, and possibly countries could, and probably would, boycott the "offending" nation, sending that nation into total economic ruin, and that isn't cool.

This means that the WTO takes what little voice you do have in your government, and throws it all out the window, and it could be on the whim of some large corporation, such as Microsoft. So be wary of what the WTO can do.

Re:The evil capitalists?

[hensley]

Implying that I come from a communist country is wrong -- I don't (I live in Germany).

That said, I think that capitalism is responsible for many bad things in today's world. Just think about South America. Yes, I know Cuba is a thorn in USA's ass but how many people are starving (and dying from that) in the capitalist countries of South America compared to Cuba? How is the rate of education in all those great capitalist (you would probably say democratic, capitalist is what you really mean) countries compared to Cuba? How has the quality of life improved in the eastern European countries since the great turnover for the average population? Just take a look: many people have been set off (rates of 80% are quite common), they don't have a life as good as before.

That said, I don't believe in communism -- at least not how it was implemented in all those countries like SU, GDR et al. Those were not really communist countries but IMO state-capitalistic with some people having control (and privileges and money and ...). So calling something communist (or capitalist for that matter) doesn't make it like that.

E-commerce/direct sales circumvent trade barriers

[acacia]

O.K. time to set the record straight on the WTO's purpose and how this relates to MicroSoft's appeal. The WTO is an international organization that was brought into being in 1995, and is really just a successor to GATT, which was set up in the Bretton Woods agreement after WWII. It was set up more or less to expand the scope of GATT to include those countries which were not part of the Bretton Woods agreement.

GATT, as some of you might remember, was essentially a forum for the settlement of grievances between countries that related to trade. It allowed a forum for countries to decide as a group whether or not barriers or subsidies within a member country was "unfair" or "predatory". It also sought to lower the barriers to trade between all countries, as these barriers have a negative effect on the efficient allocation of resources globally.

Countries have the ability to tax and subsidize activities as they please, within the boundaries of their own nation. What this means in the international realm is that it is harder/easier to sell certain things to other countries. By creating artificial barriers to trade via taxes, a government can protect a local (by which I mean local to that country) industry from competitors outside of that country. It can also subsidize an industry (via tax relief, guaranteed prices, buying up a percentage of production to raise prices, etc.) to help local industries be profitable enough to continue/expand. Here in the USA, there are many instances of that type of behavior in our agriculture, steel, manufacturing industries.

Now that e-commerce is becoming widespread, issues related to protectionism get really interesting. The internet respects no boundaries, and doesn't care about where the buyer and seller are. If international barriers on e-commerce are not imposed, then goods and services can be exchanged without the intervention of sovereign governments, right! All the sudden protectionist taxes become meaningless, because the normal flow is short-circuted. This has got to have the bureaucrats in a tizzy, because their carefully crafted walls have suddenly sprung leaks.

In general, this is good for the average consumer. I say in general, because it affects people in different ways. If the price of imported socks becomes 50 cents versus $5.00 because you can buy them on line, everybody wins, right? But how about the textiles plant in South Carolina that has to close shop and lay off thousands of workers because they can no longer produce socks at a competitive price? (BTW, the textiles industry is the most protected industry in the USA. Some estimates say it costs every US family an average of about $1500 per year.)

So you see, this stuff gets pretty complex, because there are trade-offs involved. If you open your doors to the world completely, you are vulnerable to having entire industries killed off. This may be as a result of honest competition, or maybe that foreign countries industry is being subsidized by their government so they can sell their stuff cheap, then since the domestic industry is gone, they can raise their prices at will (some would argue that Japan did exactly this to the US steel industry in the 80's, I say bullshit.)

What M$ is making a play for is to be able to open up markets, independent of government intervention, provided it is over the internet. Honestly, I think this is a pretty good thing, but it opens up a pandora's box because subsidies to industries are a lot harder internationally than tarrifs.

This diatribe has gone on long enough. To get a real understanding, you need a degree in Economics (like I did, and it's still not enough) If enough people are interested in more, maybe I'll post something on my home page.

It's not that hard

[/]

The country where the purchaser resides can tax the credit-card purchase, and the exporting country can tax the export at the dock. The intermediate countrieds might not be able to do too much, but that doesn't mean all must fail. Fail they would if I had my way, but unfortuniately I don't.

Re:It's not that hard

[DaveHowe]

The country where the purchaser resides can tax the credit-card purchase
That's certainly possible, but given most systems depending on taxing the goods, and taxing diferently depending on type, it would be difficult to do. In particular, you may end up taxing some things four or five ways, depending on national rules (for example, the country that runs the credit card takes a cut, the country you phoned from, the one you registered in, and so forth)

, and the exporting country can tax the export at the dock. The intermediate countrieds might not be able to do too much, but that doesn't mean all must fail. Fail they would if I had my way, but unfortuniately I don't.
Dock? so, for online services and downloading software.....?
I suppose you could impose a goods tax on the D/L server, but that would mean all such companies almost instantly relocating their DL servers to whatever country charges the least.....
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MS is leading you into a trap!

[cpt kangarooski]

This is _important_. MS is once again on the WRONG SIDE here. While what they propose seems to be a good idea to many of us here (who are fed up with governmental interference with the net), things would be much, much worse if MS succeeds.

The WTO has an abominable amount of power. Far too much, IMHO. Though it is not their original purpose, they basically exist now to overturn the sovereignty of the various (many) nations which are members in favor of international corporations.

If the WTO rules that US antitrust law, for instance, somehow harmed international trade and was in violation of the treaty, the US would have _no option_ but to revoke the law and submit to the WTO.

The WTO is a jillion times worse than our governments, because at least we have some hope of changing the way that our governments work. We have no such hope wrt the WTO; they serve the best intrests of real people in name but not in deed.

Sure it sucks to have trade regulations on the net. But did you support embargoes as protests against apartheid? Human rights violations? Environmental, health and safety concerns? Not only could a moritorium prevent cessession of trade with nations which had such practices or harmful effects on the planet or even yourself, but they have already done so in the past.

If you don't like the behavior of your government, fine. But for God's sake, wouldn't you rather have YOUR government listen to you and not to some faceless corporation-serving committee.

So let's not only encourage the WTO to take no action whatsoever, but encourage it's dissolution or at least an extreme change to a body which is founded on not just money but ethics as well.

Re:MS is leading you into a trap!

[dalroth5]

So let me just make sure I've got you right. You believe in representative democratic government. You don't believe in the WTO because it's a supra-governmental body which you perceive as being controlled by corporations. I think though that the idea of the WTO was to subordinate the desires of individual governments to a representative democracy of *those governments*, not to corporations.
If I'm with you so far, then it seems to me we have to determine whether the WTO is indeed controlled by multinational corporations or not. If it is, we should fix it. If it isn't, we should probably just shut up, even if it overrules the once mighty, once proud US.
Provided it is ruled by said RD, we *do* have the ability to affect it, by choosing our own governmental bit of it. Of course, that means that even the US is no longer in charge, but that's life: all empires fall.

Re:MS is leading you into a trap!

[cpt kangarooski]

Well here's the catch. I still believe in a representative democratic government, but I lean more towards the democratic side than the representative side. As far as I see it, the reasons for the US (at least) being a republic are based more in logistical issues and the idea that various elected government officials will do what's right for the people, taking into account their highly developed senses of morals and justice, et al. The first is no longer entirely a valid point, and I have severe doubts about the second in a lot of cases.

I don't really like the WTO because it's yet another step up, away from actual people. I don't believe that it can actually or accurately help or represent people being as far up in the clouds as it is. Instead the WTO's constituency seems to consist of governments and corporations, neither of which can be safely relied upon to preserve the best interests of the people whom they are supposed to be serving, IMHO.

As for American Imperialism, I personally don't care for it much. I'm actually a bit more of an isolationist. I think that America should lead by example, and not by bullying other nations and peoples around.

But this doesn't mean that we have to love tyrannical (for example) countries either. If Americans decide not to conduct business as usual with some country, then that's our call to make. If some country Foo decides that trade is more important than oppressing their people, they'll change. If not, they can do without.

Nor do I have no problem with America being subjected to the same criteria by others - we're hardly perfect, but I'd like to see if we could be.

Re:MS is leading you into a trap!

[cpt kangarooski]

I disagree. I'm very much against going to war against anyone that doesn't go to war with us first. But how could I possibly look at myself in the mirror if I protested against actions taken by some other country which I had some issue with, but at the same time also conducted business as usual.

If someone wants to act in a way that Americans will react negatively to, they'd be kind of foolish to base their entire economy on trade with us. I'm not going to stop them from trading normally with anyone else, but at least I can use the voice of my wallet. It sometimes has a curious ability to be heard when my own voice is ignored.

Re:MS is leading you into a trap!

[Brian Knotts]

As far as I see it, the reasons for the US (at least) being a republic are based more in logistical issues and the idea that various elected government officials will do what's right for the people, taking into account their highly developed senses of morals and justice, et al.

I believe you're missing one of the most, if not the most, important points of republican government. A republic, as opposed to a democracy, is designed to protect the rights of minorities (it doesn't always do so, of course, but that's an implementation issue, not necessarily a design flaw).

If Americans decide not to conduct business as usual with some country, then that's our call to make.

And I'd say the most "democratic" way for them to express their views on that is in the marketplace, not by government fiat; wouldn't you agree?


Interested in XFMail? New XFMail home page.

They didn't try too hard

[/]

Uncle Sam has already failed in regulating Internet content with the (expletive) Communications Decency Act.

They never go to try to do any regulating, because injunctions were (properly) issued because of its facially-evident unconstitutionality. It would have failed if enforced, but that's still a matter of opinion and can't be imperically determined from those particular events.

Pollution ain't got JACK to do with it.

[evilad]

although I think it speaks more strongly for global environmental protection treaties

If they could exist and be reasonably effective, I'd be right in there every day with mah letter-opener-of-death forcing my country's leaders to sign. In an imperfect, Hobbsian economic-superpower eat economic-minnow world, however, the only thing that can save us is a good healthy attitude of "Y'aint dumpin' that shit here. Now git. This thing's loaded."

... but anyway, what does pollution have to do with writing and selling software?

Nothing whatsoever, zatz. Thanks for asking. I actually stopped writing half-way through my essay because I was suddenly hugely afraid that I was off-topic. Come to think of it, I'm not, so here we go.

If I started spouting off about mob-run software sweatshops in the former USSR, people might write me off as one of those scruffy-lookin', Z-net readin', International-Buy-Nothing-Day observin' Chomsky-agreein'-with socialist fruitcakes. Chomsky's the fruitcake, and I ain't no socialist. (I mean, Who's Scruffy Lookin'?) It's just that Big Business ain't just plain folks like you and me.

Software is Big Business. Big business, be it oil, pharmas, or software, is in it for the money, and to hell with your civil rights. To hell with your human rights, for that matter -- Big Oil walks on 'em as a matter of course. Therefore, whenever you start talking about restricting a sovereign government's abilities to control the actions of a hypercorp WITHIN THAT SOVEREIGN NATION, why, I start to get a little nervous. So should you.

Your government, as shitty as they might be at it, has entered into a social contract with you, as a citizen, to provide you with certain things, like security of property and person. The nature of the contract is outlined in your constitution, or some other such document. In other words, your government is there to take care of your ass and your shit. If they didn't do that, we wouldn't have 'em. That's the basis of modern liberal political theory.

A hypercorp has entered into a contract with its shareholders. The rich ones. The little guys don't vote, generally speaking, and they don't hold enough stock to make a difference. The people a hypercorp cares about are easy to recognize. Simply put, they're the ones rich enough to own automobiles with climate control systems which enable them to not care if the smog index is too high to bike to work today. Or roll the windows down in your Ford POS, for that matter.

If they don't care about the poor piece of shit wheezing his last in the next car, what makes you think they care about some poor, intelligent, but sadly manipulated and controlled sod that they'll never see because he lives in Russia or India?

Again, I use pollution as the allegorical soapbox for my human rights tirade. I see this pollution shit going down. So do you if you'll look around. We don't see intellectual sweatshop laborers getting the shit beat out of them for trying to unionize very often, so it doesn't make a very gut-wrenching example. It is what we should really be concerned about, though. The really bad shit will never go down here, cause this is where the rich folks live.

So to sum up, forget pollution. I'm talking Sovereignty. It's there for a whole bunch of really good reasons, and it's worked quite well for a few hundred years. A hypercorp is ultimately a self-serving and incredibly resourceful beastie. Having your government promise to not interfere with a hypercorp's fits of selfish whimsy might be a good idea and it might not.

All I'm saying is that if you think it's a good idea, please go it slow. Real fuckin' slow.

If you're not so sure and the WTO asks to meet in your city, tell 'em to piss off. I'd be doing it myself if I could get to Seattle by Monday.

EviLid

Re:Pollution ain't got JACK to do with it.

[Hobbex]

The preachy layer of populism by which you are covering your political agenda is quickly reaching molecular thickness. The weepy stories of environmental damage and abused workers in the name (but the not the mention) of infringing on the freedom trade and flows of information, are almost exactly like those elements who oppose freedom of speech, and will talk about poor abused children and victims of terrorists until their eyes water.

Bullshit. Tariffs do jack all to protect anybody in the country targeted by the tariff, and for that matter, in the long run, the country imposing them. They are just another form of piss in your pants, isolationistic throwback to a past era of regionalism that have proved to work really bad.

You know what the biggest trade war of this decade has centered on: bananas. Thousands of man hours and billions of dollars have been wasted on a useless battle because the French want to protect a bunch of people growing bad bananas (and I know because we have to eat them now) in the wrong place.

I don't particularly believe in purchasing software what so ever, but I can promise that the effect of any tariffs on software would be me having to pay triple the price for Quake3 because id are dumping the market for Swedish and Greek makers of 100 Euro frogger-clones. Hell, by European 35-hour week standards, the American software industry is one big sweatshop, and that does happen to be the reason that you are doing so much better at it than we are. Tarriffs ahoy to protect the jobs of my lazy ass nationals, and fuck our chances of ever coming back in the long run!

If you truly care about the people of the world you ought to be advocating for greater international cooperation, not jumping on the WTO as something evil in the name of sovereignity of governments (and possibly remember that the party that most argues for sovereignty in this decade is the Chinese government...)

-
We cannot reason ourselves out of our basic irrationality. All we can do is learn the art of being irrational in a reasonable way.

The Low-down on World Trade

[Horizon]

The short form is: It's All Bullshit.

Firstly, the WTO is a toothless tiger. Let's be completely painfully blunt here: it has no powers to enforce its rulings. When the WTO was established, President Clinton took great pains to prove this to Congress before they ratified the treaty.

The US has said - in essence - "the WTO plays our tune, or we quit". China has said "the WTO will play our tune, or we won't join". Japan's up the creek. Asia was always playing "if you want in to our markets, you need to invest here first". This clearly violated both the spirit and the letter of the WTO treaty, but it's been happening for years.

I don't think we can blame the players here. The MNCs (multinational corporations) are not really doing what they do out of spite, they do it because they simply must. If they don't play hardball, they lose. The market is not a self-correcting mechanism, it is a Darwinian jungle.

The WTO is not to blame. It's an attempt to regulate something that doesn't actually exist. Free trade is a lie; a sham-faced lie. For example, for the US company Boeing to enter China, they had to do an 'offset' deal. That is, the price of any Boeing planes sold to China had to be offset by Boeing spending money inside China's borders. So right away, a good deal of what is 'free trade' is deal-making that (once again) violates WTO rules.

Then you have 'transfer pricing'. For tax and profit purposes, MNCs will trade things at very precise prices back and forth between their various international incarnations. This happens so much that at least 20% of the world's 'free trade' is companies buying and selling stuff to themselves.

The upshot of all this is that according to some estimates, only about 20-30% of the world's trade is 'free trade'. The rest is swallowed up by transfer pricing, market-access deals and other such hocus pocus.

The system that has emerged is itself at fault. I can't think of any solutions that really don't have enormous drawbacks for someone; or that will be impossible to deploy. For example, to give the WTO real enforcable powers would cut out a lot of the unchecked bullshit that does happen. But to do so would mean signing away certain portions of sovereignty to a non-representative body. Or perhaps a 'world government' is established to deal with international problems that nations would bicker about. Oh dear, it's fifty years later and I want to live under some other system of government - but there's no alternative.

I have no idea where this will lead us. Something will give.

PS: did anyone catch MS's insistence that software be a 'good'? They know damn well that software is a service industry made artificially into a goods industry. It's why they are so rich ...

be well;

JC.

Of course MS don't want tariffs!!

[Dacta]

Microsoft is a very successful software company. They have a significant lead in the production of commercial software, and believe that any increase in the size of any computer driven market can only be good for Microsoft.

MS wants to sell its software in non-US countries as cheaply as possible, and having no tariffs helps that.

To take a real-world example: Australian (and NZ) farmers produce cheap, high quality lambs which are exported to the US and are still cheaper than (subsidised) US farmers can produce lambs. The US farmers argue for a tariff on lambs (which they get), while the Australians are trying to get the WTO to declare the tariff illegal.

I bet the Americans among us are saying "Great work by the govenment - saving US jobs", but stop and consider - it is also making lamb meat more expensive for you. Shouldn't we let market forces decide it?

--Donate food by clicking: www.thehungersite.com

Re:Of course MS don't want tariffs!!

[fishbowl]

"I bet the Americans among us are saying "Great work by the govenment - saving US jobs",
but stop and consider - it is also making lamb meat more expensive for you. Shouldn't we let
market forces decide it?"

How many people can have a pet lamb anyway? Seems like quite a niche market. If there were so many lambs imported that they were common, people might try to do something disgusting and gross, like even skinning them and *gasp* eating them. We can't have that, can we?

Re:Finally, something good coming out of Redmond..

[cpt kangarooski]

No, no, no no no.

No, no, no, no, no, NO, no, no no.

You are totally missing the point, I think. I agree that no one should place tarriffs or other taxes or trade barriers on Internet-mediated commerce.

The problem is actually with the WTO. Their behavior has pretty solidly been to erode the soverignty that you and I enjoy (remember that 'We the People' thing?) in favor of self-serving multinational corporations.

Imagine that you have a good reason - a really DAMN good reason to impose a tariff on commerce, including that over the net. For instance some other country is directly or indirectly polluting the US, they killed your dog with it, and you want to make them stop. Or they kill their workers if they attempt to unionize. Or attempt to hold democratic elections. Or attempt to not get killed just because some fascist soldier didn't like their face.

Is this terribly far-fetched? Do you sincerely believe that it's morally okay to 1) accept other people doing that and not even care; or 2) protest on one hand but not back it up with any actions on the other? Do you think that you have the right to call yourself an American if you're willing to have your rights taken away? That you'd prefer it if other people couldn't enjoy the same kinds of freedoms we do?

Well, if the WTO says no tarriffs, then guess what? Your vote to establish tarriffs, your protests to do something that can realistically make things better, your fscking soverignty just went down the crapper. Thanks to a combination of over-powerful corporations, stupid politicians/bureaucrats and the WTO itself, your soverignty has been overridden.

In my book, no one, and I mean but no one should get away with ensuring that you and I no longer have a say in how our own damn country should function. That our votes and our god-given freedoms are ultimately worthless. If the framers of our government could hear this they'd probably regard it as the highest treason imaginable.

So while I am all for not having tarriffs on the net, that is small potatoes compared to some organization telling me that if every single enfranchised American votes to establish a tarriff we STILL can't have it.

MS is not doing us a favor, man. They are sugar-coating a knife so that we let them stick it in our backs. We need to radically change, or abolish, or leave the WTO altogether. There may have been good intentions in its' founding, but gee, guess what the road to hell is paved with?

Software as a service, rather than as goods?

[Politas]

Snuck in the middle of that article is this gem:

...an EU proposal that would reclassify electronically delivered software as a service. Software has traditionally been classified as goods.

It sounds like an interesting proposal, given that (non-free) software is licensed rather than sold, in a purely electronic software transaction, it would seem reasonable to treat it as a service.

Some Insight and Responses

[Hangtime]

A synopsis

I will state that I support Microsoft's appeal to the WTO for withdrawal of tariffs on software products. I will give a quick affirmative stance then I'm going to address the truthfulness or fallacy of the comments here on the board.

First, I believe any form of tariff on a good is in essence a crutch for that country, an isolationist's view of the world and a subscriber to the Archimedes idea of wealth. When tariffs are imposed it means that the consumers within that country are hurt because they are "persuaded" to buy products from that country even if those products have poor performance characteristics and/or quality associated with them. I believe that consumers should be the final judge on the merit of product in the marketplace not government. Anything else is a limit of free will. The only time tariffs should be instituted are when another government has subsidized a company to produce product below costs and dump it on another. At that point, I believe it is the government's job to step in. I say this because there is a restraint on free trade when a government props up an industry by subsidies.

Isolationists such as Pat Buchanan and Ross Perot in my country (USA) like to whine and point fingers at trade agreements such as NAFTA and how they are sucking the jobs out of the United States. You can take these same arguments and find them anywhere else in the world including China. The restriction of trade in essence kills any sort of competitive advantage a country has of getting ahead because they must create all the products that are needed to sustain said country. For instance the United States has the internal resources to make any product in the world including plastic toys. However, it has been found by American business that it is not a fruitful endeavor to produce them in the U.S. because of high overhead costs associated with labor prices. Therefore most all plastic toy making and assembly happen in China instead. Well what does that do for the U.S.? Now more internal resources can be spent on things that are fruitful to make in the U.S. including computers, software, equipment, etc. By recognizing something that you cannot do as well as someone else both countries benefited. For a further example I give you the Research Triangle 25 years ago, a haven of the slogging textile industry, and the border towns along the Mexican side of the line. When NAFTA allowed free trade between the U.S. and Mexico many of these textile mills that used to inhabit the southern U.S. moved to the Mexican border. Why, because it was cheaper and economically more efficient. True, many U.S. cities were stung and never recovered from factory closings, however, RTP noticing the winds of change began to invest more heavily in science and technology industries there making it what it is today one of the foremost regions in the U.S. today. So as an end result we have two regions that in Mexico has become one of the best standard of living in the whole country in a matter or 10 years and RTP which has become a center of technology and industry.

This all ties into the failed Archimedes Idea of Wealth meaning that to become richer, someone must become poorer. What do you think is the best predictor of a nations wealth? Is it how many goods were bought by someone else or is the amount and how many times money-changed hands? If you said the first your wrong. Its not the Balance of Trade that makes a country strong, it's the Balance of Payments i.e. how many times you use money to buy things. Remember money itself was meant to change hands and has no intrinsic value but when capital is used to build things, make things, do things then that is true wealth.

Selected answers for rebuttal

To the Canadian pollution response on the board.

First all, I don't know how that one got moderated up so high but here is the fallacy in the argument. Personally, I could care less as a consumer what happened environmentally in another country. You were right at the end of the article being for free will but went south by saying "But when there is a good reason, then somebody should make it clear that I am doing the world a disservice by purchasing that product." Let the market decide not some bureaucrat. If there a television special comes on and people don't like what they see, let them choose not to buy the product, don't force them not to buy it.


To the response on trying to police transactions

Kudos! What makes anybody here think that many of these small African republics can police their own transactions? Better yet, who here thinks that someone wouldn't come up with a way to sidestep transactions by going through one of these countries? Corruption is a bad thing and while I do believe in helping others I do not believe giving someone a way to harbor crime is an answer.


To the response MS is leading you into a trap

Hey when did we give up our right to regulate countries which are incorporated within our own borders? WE DIDN'T! The WTO can't do one thing to stop the court process of Microsoft. The WTO by its nature is set up to deal with international trade conflicts not internal politics of its member nations so quit acting like a chicken with its head cut-off and read some international policy books.

To the response Re: Evil capitalists and the South American / Cuba connection

The reason capitalism in South American has faltered in those countries revolves around one word, corruption. You have seen it in Brazil, Columbia, Venezuela, Chile, Argentina, Ecuador, etc. Capitalism must have strong court system and mentality that there is fairness in order to thrive. When no fair government regulations exist, self-interest takes over on politicians part and capitalism is hampered. BTW, instead of in South America where there trying to create a middle class and there are poor everywhere, you can goto Cuba where everyone is poor and their no hope for prosperity, least till Castro dies.

To the response of No, no, no, no, no, no, no, no, no (ok I got the idea)

Go line up with Patrick Buchanan and Ross Perot. Don't you think the reason we had a debate for a few months in Congress both sides of the chamber was to make sure we didn't give up what you speak so passionately about. BTW, no rights were taken away as American citizens. There is not even a guarantee a. the WTO will last that long and b. anyone will follow the rules. The WTO's power is with the fortitude of the nations within it to carryout policy. No one is going to try to screw their biggest trading partner, the United States of America, even China won't. We do 3% of our GDP with China they do 50% with us.

To the response of Thoughts (the one with the polysci class discussion)

What you and your class fail to comprehend two things. One what you talk about is colonialism with manufactured goods. Actually the case is quite reverse from your own discussion. Most corporations moving into other countries i.e. GE, Coca-Cola, Maytag, use companies in other countries already established so that don't have to deal with local customs and regulations. This is the same way when either opening up a manufacturing plant or distributing a product in another country. The VAST majority of companies will not go into another country alone for one very good reason, ITS RISKY! If your interested, I can point in the direction of some articles on this subject. Two, your arguments about software do not take into account the benefit of using more polished software on existing industry. Say the Ivory Coast imposed a 500% tariff on Microsoft Office. Of course, this might spur some local people to get together and try to produce an alternative but wouldn't the better solution be to keep importing Microsoft Office but to also encourage through investment someone to come up with better or add-on software? It's the difference between competing and combining forces.


Well I'm tired and that's enough for the day.
Later.

Re:Finally, something good coming out of Redmond..

[cpt kangarooski]

Did I understate that I feel that powerful Americans are also responsible for this lousy state of affairs? They think that they WTO has power, and they respond accordingly. Unfortunately for us, those dopes themselves have power here and we get screwed over.

But I don't like there being a body which has very great and nearly-unassailiable power over me, but which is not accountable to me. The WTO is representative of governments (and largely of corporations), but that's not the same as being representative of the people. It should be, but it's not.

I don't care if Foosylvania imposes a tarriff on US goods for something. Because hopefully, that's what the people of Foosylvania want. But no one has the right to override Foosylvania's decision. There are consequences and ramifications to any act, and that one's not somehow exempt; you have to be prepared to live with the results of your actions. But I wouldn't want every other country in the world to suddenly tell them that they can go to hell unless that's actually what each and every one of them, on an individual basis, each representing the will of their people, wants. The WTO as it presently stands seems to not be doing this. That's my problem with them.

Why MSFT is wrong and the Enviros are right

[WillAffleck]

OK, maybe some of you still remember the days when you coded for free or the thrill of it all, back before you were in on the IPOs (Red Hat, at $250 next week?), but here's a little World Economics 101 from someone who's invested hundreds of thousands overseas and thus profited from the WTO.

1. MSFT's idea about a moratorium on Net Taxes. Bad Idea. Look, read some Shakespeare, crack the spine, it's "Death and Taxes" that you can't avoid. Privacy costs, dude. Taxes will happen - either hidden in manufacturers or sellers costs, or out in the open with a VAT or GST, but it's gonna get you and you might as well deal with it.

2. Why the Enviros are right. Yes, you heard me, they're right. Any economic system is a system of "theoretical" laws which impose an arbitrary system of rules upon transactions. Without these, we don't get what are called "public services" and then only the rich (me, not you) can afford to pay what it really costs. All production has true costs - environmental pollution (yes, EVERYTHING causes pollution, just to varying degrees, some of which is easier to recycle through the environment or mechanical means), mineral costs, labor, water (this last one is more critical than you realize), and so on. Any "world trade" system must either assign a cost to pay for the pollution, or subsidize it at the cost of the receivers of pollution (hint - not the rich states). A system which allows corrupt politicians that people like me bribe to argue in my interests so that their country gets the "invisible" pollution quite literally stinks.

You can argue about how trade is really free till you're blue in the face (great, if you're a Celt), but it ain't. And when you make some serious bucks off of trade, I might listen to your rantings about how MSFT is right and the Enviros are wrong, but that won't happen anytime soon.

Much ado about a real battle

[WillAffleck]

Well, all the planes were booked up solid from Santa Barbara and San Francisco, so I had to come back Saturday with my son. Tons of limos and press people flooding in. Not much banner hanging - the main stuff is in NYC or Paris really. Bunches of marches, none of which will be visible by the WTO attendees. Counter demonstration by right wing nutcases who can't count at the Space Needle monday night. Probably, in a city with about half a million population, you're looking at 50,000 to 100,000 protesters, mostly local churches, labor groups, and environmental groups.

Massive silence on the part of the media - they're pretending like nothing's happening, so as not to scare away all the tourists. Docks will shut down tuesday, so will a lot of other things (I get to telecommute).

There is no agenda this year

[WillAffleck]

Didn't you catch that? We (the US) tried to bluff and get our way (labor issues) and the EU tried to bluff and get their way (enviro issues), and the rest of the countries didn't vote for either, so ...

No Agenda This Year

Not that that changes any of the deal-making. Had fun on the plane rides with some of the attendees - quite amusing.

Sales tax

[seanb]

Your post relies on the assumption that sales tax of some form is needed to keep governments from being "mired in debt."

Many states and nations do quite well today without sales tax of any form. In fact, meny people are completely opposed to the idea of sales tax because it is "too regressive."

I suspect that in 100 years, governments will still be able to tax property and income. Even if they are unable to tax you for spending your money, they will be able to tax you for earning your money and for having your money!

WTO has moved far beyond tariffs...

[homunq]

Since the WTO sees everything through the lens of trade, any law that could affect trade counts as a tariff to them. That includes environmental laws (such as the famous sea turtle ruling among many others), labor laws, human rights laws, etc. Would it be free trade if UCITA-like provisions are rammed down sovreign countries throats (by punitive tariffs), as could very well be a consequence of the Seattle TRIPS (trade-related IP) negotiations?

The WTO puts unprecedented power to challenge laws into the hands of corporations. Anyone who thinks that they won't try to use that new power for whatever purpose suits them, rather than just legitimate free trade, is deluded.

(And see the text of the sea turtle ruling, linked above, for the WTO's attitude towards open process... basically, if you're not a government or a corporation with money on the line, don't bother sending them briefs, they won't even read them.)

Monday scorecard: Police 2, Mayor 3, Protesters 4

[WillAffleck]

Well, it's been groovy in Seattle so far. Went and deposited my E*Trade check (yeah, cashed out of RHAT at $119, but my new townhouse closes next Tuesday, so am still happy) and tons of protestors. Mostly Qui Lin Gong (you know, that Chinese Spiritual Movement they lock in prison for life, and there's a HQ just East of Seattle) with 2-3 people on every streetcorner. Hundreds of them.

Then got to Washington Mutual at Westlake Center, past the carousel and police city. Must have been 50 cops in 5 blocks. Protesters can only get within 2 blocks of the Convention Center. I just wanted lunch at the Blowfish Cafe, but would have had to walk 8 more blocks, so gave in and ate at the Westin (where tons of delegates staying, and media). Got a nice view of the Turtle March - hundreds of them, a nice giant Whale, probably 1000 protesters, with ok signs. Police were cool, protesters were cool, very Seattle.

Protesters shut down the Convention Center though, via telephone. And I got a bonus parade during lunch. Had interesting discussions with hotel staff, some pro-trade, one from El Salvador who was worried that there might be riots and all. Told them so long as the police let us get our Lattees, we'll be fine.