2003-01-18
----- Original Message -----
From: "Jim Elwell" <[EMAIL PROTECTED]>
To: "U.S. Metric Association" <[EMAIL PROTECTED]>
Sent: Monday, 2003-01-06 11:08
Subject: [USMA:24380] Re: interesting news
tidbit
> At 1/5/2003, 08:54 PM, kilopascal wrote:
> >It seems that North Korea in an attempt get revenge against the US has
> >converted all of its US dollar deposits to euros. If more countries at
> >odds with the US do the same, it will destabilise the dollar on the world
> >market and further hurt the US economy at home.
> >
> >Again, it is a strong euro, and a stabile EU that will have the power
> >force metrication on the US.
>
> John bases his assertions on a mighty simplistic view of the economic
> world. A few points:
>
> (1) EU cannot force metrication on the US, it can only refuse to accept
> non-metric products. That it has failed to do so is due to lack of
> political will and/or popular demand, and is not necessarily related to
> whether the Euro is strong or weak vis-a-vis the dollar.
> >It seems that North Korea in an attempt get revenge against the US has
> >converted all of its US dollar deposits to euros. If more countries at
> >odds with the US do the same, it will destabilise the dollar on the world
> >market and further hurt the US economy at home.
> >
> >Again, it is a strong euro, and a stabile EU that will have the power
> >force metrication on the US.
>
> John bases his assertions on a mighty simplistic view of the economic
> world. A few points:
>
> (1) EU cannot force metrication on the US, it can only refuse to accept
> non-metric products. That it has failed to do so is due to lack of
> political will and/or popular demand, and is not necessarily related to
> whether the Euro is strong or weak vis-a-vis the dollar.
A strong Euro, an expanded EU, and
political Union will give the EU the motivation and power to make the directive
stick this time. American companies who depend on European business will
have no choice but to comply. Their only choice then will be to decide to
either have two production processes, one for the EU/world and the other for the
US only. Something they have been able to avoid so-far. And if the
EU has the political might, they can pressure other countries to follow their
lead, in effect completely isolating the US economy. The US economy will
either have to convert or become very weak. There doesn't have to be a
push for total metrication, just enough to get the US to the point of critical
mass. That is where the FFU holdouts will experience an increased cost
burden upon themselves, hopefully to the point of forcing them to
metricate. A domino effect.
>
> (2) To the degree that the Euro is strong, it encourages European exports
> and discourages American exports. This may weaken the financial strength of
> American exporting companies. However, it is hardly obvious that American
> exporters will see the Euro and metrication to be directly related.
[I had a brain cramp while writing the email below. A strong Euro vis-a-vis
the dollar makes US exports to Europe stronger rather than weaker (US goods
become cheaper to Europeans), and European exports to the US weaker
(European goods become more expensive to Americans).
So, a strong Euro may mean MORE colloquial products going into Europe, and
FEWER metric products coming into the US.
Does this mean that a strong Euro will slow down metrication? Not
necessarily -- the whole point of my post was that the issue is vastly more
complex than that, and no one can conceivable *know* the effect of exch]
the dollar makes US exports to Europe stronger rather than weaker (US goods
become cheaper to Europeans), and European exports to the US weaker
(European goods become more expensive to Americans).
So, a strong Euro may mean MORE colloquial products going into Europe, and
FEWER metric products coming into the US.
Does this mean that a strong Euro will slow down metrication? Not
necessarily -- the whole point of my post was that the issue is vastly more
complex than that, and no one can conceivable *know* the effect of exch]
This is no longer true in a global
economy. The US and EU both purchased a lot of goods and services from the
third world. Especially China. The appreciation of the Euro makes
these products cost less if they are sold in dollar terms as the Euro rises,
thus countering inflation in the EU zone. Global businesses easily move
production around to less costly areas of the world, so their products don't
appear to increase in price with currency fluctuations. With the increase
in the value of the Euro, goods purchased in the world market, such as oil and
raw materials, cost the European producers less when they buy these. They
can pass the cost savings onto their customers. The US sees no such
savings. Also, the US has exported much of its manufacturing base and is
dependant on others for goods and services and if those goods and services come
from the EU, they have no choice but to pay the price.
It is one thing to accept FFU labels
in the EU, but the EU has the right to regulate goods and services that are
controlled by standards and laws. A US company selling electrical
equipment in the EU has no choice but to follow the standards. If the laws
require power cords to have a certain type wire, measured in square millimetres,
with a specific colour scheme, the US manufacturer must comply. There are
compnanies in the US who make and sell products that meet EU industrial
requirements. So, in a way, it an American company does get an order for a
product to be sold in the EU, and has to follow the EU specifications, it will
be a good way for the American firm to be exposed to metric parts and
practices.
>
> (3) Where American companies are losing European market share due to a weak [should be STRONG]
> dollar, some of them MAY see the metrication connection, and some of them
> MAY choose to metricate in response. No one can know if that will be a
> significant effect.
Unless a company stands to sell a lot in the EU
or over the long haul, then they will try to ignore metric unless they are
forced to use it by wish of the customer and/or standards or laws. The
American company will see metric as a nuisance, unless there are significant
orders and profits made from it.
>
> (4) Some American companies with larger portions of their sales in
> Euro-using countries may be financially weakened [strengthened] by the strong Euro. This
> may RETARD [EXPAND]metrication, due to the simple fact that it takes money to
> metricate, and companies may put off metrication if they do not see that it
> is related to their decrease in sales (and, as I noted above, that is
> hardly a clear connection).
See responses above.
>
> (5) Further RETARDING metrication will be the fact that some American
> companies will conclude that it is not worth the effort to try and export
> to Europe. Both the Euro and metrication will appear to be barriers to that
> effort. Some will not try to export, others will export to markets where
> the dollar is stronger.
American companies will go out of their way, no
matter what the reason not to use metric and not to metricate. They
would rather see the world just accept and use American units. When
times are good, we don't need the change because we are making money despite not
being metric and when times are bad we can't afford the cost of a change
over. So, when is the right time?
>
> (5) John's "analysis" also totally ignores the effects of various trade and
> tariff agreements, various countries' providing different subsidies to
> different industries, trade barriers, embedded constituencies, historical
> practices, backwards compatibilities, and a plethora of other facets of the
> economic, trade and metrication picture.
All a bunch of nonsense excuses that have been
used for generations as a good reason not to convert. If we allow these
"reasons" to get in our way, then the US will retain FFU into eternity, if they
are around that long. If these are barriers, then we need to tear them
down and if some business suffers, then we have to put the blame on
business. The cost can be attributed to resistance.
>
>
> The fact is that the USA will remain the most economically powerful nation
> in the world as long as we remain the one with the most economic freedom.
> It is economic freedom, exercised by individual human beings, and not the
> unit of currency or unit of measurement, that builds prosperity and
> economic strength.
Rome fell, the British Empire dwindled
away. The US will pass too. And even if it doesn't happen for a long
time, a strong EU will at least be a source of resistance to US efforts,
especially efforts to spread the Gospel of FFU to the world.
>
> For a view of the Euro a bit more realistic than the "European good,
> American bad" view of John, read the editorial published today at:
>
> http://www.sltrib.com/2003/Jan/01062003/commenta/commenta.asp
I'm not trying to categorise
the situation into US bad- EU good. But, to push for a greater balance
among powers. And a situation where US is forced to be a team player, not
the school bully. Where the US is a part of developing international
standards that all use together, not developing standards independant of
everyone else and whining when the world doesn't follow their
lead.
>
>
> Jim Elwell, CAMS
> Electrical Engineer
> Industrial manufacturing manager
> Salt Lake City, Utah, USA
> www.qsicorp.com
>
John
