Knootian International Stabilisation Treaty

Knootian International Stabilisation Treaty

Preamble

Trade – for as long as sentient beings have roamed the NS earth they have traded. Ancient trade routes were the veins that carried the lifeblood that sustained the body of civilisation. Today, trade is becoming increasingly important as mobility increases and industries become more specialised. The economy is globalising; this creates new opportunities and new challenges, but also the need for more interdependency. Not only does this bring economic benefit: trade can often a guarantee for more lasting peace and stability.

There are different approaches to international trade – free trade has been the traditional view to maximise total welfare. By removing tariff barriers, competition becomes more fair and the total welfare is increased. More recently, ‘fair trade’ as a concept has become popular amongst several governments. Environmental and social regulations are key to this approach, and tariffs may be considered necessary to protect sensitive industries. Other, more planned economies may only wish to act on their specific needs but still need reliable partners.

It is in this environment that the Dutch Democratic Republic of Knootoss seeks to bring together nations of all kinds, based not on political ideals but on the will to find commonalities through which we can mutually benefit. It seeks a broad treaty that is not a military alliance of incompatible states, or a small club of closely-knit nations.

Goal of the Treaty

The goal of the Knootian International Stabilisation Treaty (KIST) is to establish a framework in which nations can trade according to their own preferences to the mutual benefit of all.

The treaty is for a flexible, open-end approach to trade, that still provides some stability for the signatory nations. The treaty does not seek to restrict nations and curtail their sovereignty, not does it push for domestic economic reform in any direction.

Basic treaty requirements

To this end signatories of the treaty:

• Shall recognise each others borders and sovereignty insofar as these are internationally recognised* ((See also: OOC clauses))
• Shall establish a diplomatic representation capable of dealing with economic issues in all signatory nations. (Preferably an embassy or consulate, though in some cases a digital connection or phone number will suffice.)
• Shall make a commitment to resolve disputes with other signatory nations, economic or otherwise peacefully and in good conscience. The International Mediation Court is recommended as an instrument for arbitration.

Levels of participation

Signatories to the treaty can choose to participate in trade at several levels

Planned trade

• Even for semi-autonomous planned economies, total autonomy is difficult and some surplus goods can be exported. A planned economy may need food imports to support fast industrialisation, or may need to import specialist tools. Or it may have surpluses that can be exported in exchange for more useful things. The KIST provides a stable platform for trade between planned economies and other signatories.

Fair trade

• For some nations, a commitment to totally free trade is not an option. There may be important social or environmental concerns that take prevalence, or perhaps they feel the need for tariffs to protect infant industries in their developing economies. On the other hand, they do see the need for more extensive trade with other nations and do not ban foreign investment to and from their nations.

The KIST can help you find national partners for fair trade with nations committed to similar ideals, but it can also open up new markets as well as gain you new products. Your fair trade products can be exported to KIST partners even if they do not mandate similar standards; economic research has shown that there is a viable market for ‘fair’ products. More importantly however, the KIST treaty can open up new avenues for fair trade abroad: while not all companies in a nation may produce according to your standards, some no doubt will and these can be viable partners for your imports. In fact, because of these imports you are contributing to the spread of fair trading practices in companies of other KIST partners!

Free trade

• Other signatories think that the optimal prosperity for all is reached when trade is free. At the highest level of participation, signatories form a free trade zone that allows for a relatively free flow of products, capital and persons. This will allow for the maximal amount of specialisation.

If desired, signatory nations can take protectionist measures such as instituting tariffs against signatories with a different level of participation to prevent unfair competition. (For example: import tariffs against a planned economy signatory subsidising exports to a ‘free trade’ signatory nation.) Such measures not enforced however and national governments can make their own arrangements in this regard within treaty stipulations.

Optional: Cultural exchange and student exchange programmes

• Signatories at any level of participation can choose to participate in KIST cultural exchange programmes designed to foster a greater understanding between the peoples of signatory nations. Student exchanges can also open minds to other cultures; as well as spread knowledge of best practices amongst signatory nations.7

Bilateral treaties – for a flexible treaty system

The general rules of the treaty are broad rules which do not have to fit every specific situation: many signatories will no doubt already have running agreements that they may wish to retain.

The principle of "lex specialis derogat legi generali" applies here. A special treaty between signatory nations or groups of signatory nations has prevalence over general rules as laid out in this treaty. (“Special” means that it specifically applies to the special trade situation between KIST signatories or a KIST signatory and non-members)

Boycotts and sanctions

Economic boycotts between signatory nations are not recommended; the treaty calls for nations to attempt to resolve their differences diplomatically. However sometimes a political crisis can make such a situation inevitable. In this case nations experiencing the political crisis are strongly advised to attempt to reach an agreement themselves. (“Special agreements”, as stated before have prevalence over general regulations even if the special agreement is a mutual embargo.)

Should states be unable to reach even such an agreement then exceptions may be requested by any signatory nation; such a request is to be judged by a neutral body of experts from other signatory nations. To prevent excessive use of economic sanctions as a policy tool, exceptions from the rule that a bilateral agreement has been reached may only be requested in severe cases for:

• a ) a total trade embargo or
• b ) a weapons embargo

Trade disputes may be judged by a body of neutral experts from all nations. This body shall have its office in The Hague and shall be funded by dividing the nominal operating costs between signatory nations to ensure its impartiality. Mediators and judges will be hired from experts in all signatory nations. ((Most of this is abstracted though. Your everyday minor dispute over specific tax cuts for the tomato industry in a nation. Not really worth Rping out unless you feel like it.

Relations with other economic treaties

The KIST will seek to join up with other (free) trade agreements such as the Martian Free Trade Agreement and other treaties currently existing and yet to be created so as to further expand the possibilities of the treaty.

OOC clauses

• In the unfortunate case that signatory nations IGNORE other signatory nations, for all purposes they shall be deemed as non-existing so membership does not entail mandatory recognition of all signatories.
• For purposes of trade, economies shall be deemed “modular” despite differences that may exist in the precise tech level that is maintained: this is merely to ensure that economies of vastly different tech levels can exist next to each other in the multiverse without being out-competed instantly. Of course, an economy with higher IT ratings may still be more advanced then an economy with sucky IT ratings. You get the point.
• Suggestions for improvements are welcome