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Customs Union - isn't it good enough?

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Customs Union - isn't it good enough?

#201132

Postby wickham » February 13th, 2019, 6:00 pm

There's so much argument about the Customs Union; if I'm correct the Backstop issue is a non-issue if we stay in the Customs Union, we just accept Mrs May's plan.

Is the Customs Union so bad that we can't live with it? Presumably the EU has deals with most countries or world blocks so could the UK realistically do any better?

Which deals are bad enough for us to want to negotiate our own deals after a no-deal Brexit?

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Re: Customs Union - isn't it good enough?

#201157

Postby BobbyD » February 13th, 2019, 7:04 pm

wickham wrote:Is the Customs Union so bad that we can't live with it? Presumably the EU has deals with most countries or world blocks so could the UK realistically do any better?

Which deals are bad enough for us to want to negotiate our own deals after a no-deal Brexit?


Apparently better isn't the relevant metric. No deal is better than a deal which wasn't negotiated by Liam Fox. Especially according to Liam Fox, but also according to a few of his friends.

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Re: Customs Union - isn't it good enough?

#201160

Postby SteMiS » February 13th, 2019, 7:28 pm

wickham wrote:There's so much argument about the Customs Union; if I'm correct the Backstop issue is a non-issue if we stay in the Customs Union, we just accept Mrs May's plan.

Is the Customs Union so bad that we can't live with it? Presumably the EU has deals with most countries or world blocks so could the UK realistically do any better?

Which deals are bad enough for us to want to negotiate our own deals after a no-deal Brexit?

From an economic point of view, being in a customs union is a good thing. The EU has existing deals with many countries and many in the process of being negotiated (which isn't a quick process). It would take years for the UK to replicate these deals and the EU has significantly greater negotiating strength than the UK. There's no guarantee therefore that we'll get as good a deal as the EU. Indeed Professor of European Law at Manchester University,, Michael Dougan, makes the point that, as a relatively open market, the UK has very little to offer in a trade deal. What we have been good at doing actually is trading access to other EU markets to get our own access to third party markets.

The downside of course is that future deals will be negotiated without the UK having any right to a say on the details. It's possible that the EU may trade away things that we consider in our interests to get things that EU members consider in theirs.

Which only goes to demonstrate (in my opinion) that, as far as trade deals go, the best place for the UK to be is in the EU.

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Re: Customs Union - isn't it good enough?

#201164

Postby avconway » February 13th, 2019, 7:37 pm

wickham wrote:Is the Customs Union so bad that we can't live with it? Presumably the EU has deals with most countries or world blocks so could the UK realistically do any better?



I'm a Leaver, so to your question: “Is the Customs Union so bad that we can't live with it?” I respond with: “It depends upon the strings that come attached to the CU.”

Will membership of the CU prevent Britain from deciding her own immigration policies, her own fishing policies across all her territorial waters, her own human rights policies, passing and repealing her own laws and negotiating her own trading deals with whomsoever she may wish?

Some will want to point that often a nation's policies in the areas I have listed above (and others – defence, crime and policing, and science and health research, environment and climate change issues for example), will need to be decided in co-operation with others – that's fine, co-operating with others is quite a step away from having to take dictation from others, which is where membership of the once Common Market has morphed to over 45 years.

So – what fetters to Britain's free and voluntary decision-making are attached to the CU? None? Some? Too many?

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Re: Customs Union - isn't it good enough?

#201173

Postby johnhemming » February 13th, 2019, 7:58 pm

avconway wrote:her own human rights policies,

The internal human rights agreements are either at the Council of Europe level (not an EU entity) or the United Nations.

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Re: Customs Union - isn't it good enough?

#201180

Postby avconway » February 13th, 2019, 8:16 pm

johnhemming wrote:
avconway wrote:her own human rights policies,

The internal human rights agreements are either at the Council of Europe level (not an EU entity) or the United Nations.


Thank you - I kinda knew that distinction (it's been pointed out often enough by posters on these boards) but had forgotten it when was drafting my post above. I'm happy to move human rights issues from the list in my second paragraph to the list in my third paragraph.

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Re: Customs Union - isn't it good enough?

#201183

Postby johnhemming » February 13th, 2019, 8:28 pm

avconway wrote:
johnhemming wrote:
avconway wrote:her own human rights policies,

The internal human rights agreements are either at the Council of Europe level (not an EU entity) or the United Nations.


Thank you - I kinda knew that distinction (it's been pointed out often enough by posters on these boards) but had forgotten it when was drafting my post above. I'm happy to move human rights issues from the list in my second paragraph to the list in my third paragraph.

avconway

The nub of the issue, however, is that when you have a trade agreement it means that you do things that you would not otherwise do. Hence you are being required to do things as a consequence of the agreement. The point about the EU is that we (soon used to) participate in setting the rules. In the future we will have to follow some of those rules, but not participate in setting them to the same extent that we do at the moment.

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Re: Customs Union - isn't it good enough?

#201208

Postby Alaric » February 13th, 2019, 10:48 pm

johnhemming wrote:The point about the EU is that we (soon used to) participate in setting the rules. In the future we will have to follow some of those rules, but not participate in setting them to the same extent that we do at the moment.


Is it not the case that some of the EU rules are actually Europe wide or worldwide? In which case being outside the EU gets a seat at the top table alongside the EU, instead of having to accept whatever the EU thought best for its 28/27 members.

If you want an example, I'm thinking of the EU rule about driver working hours that can exempt buses but defines a bus route as needing to be less than 50 kilometres. That's actually a Europe wide agreement which at the Europe level doesn't apply to bus routes that are purely domestic.

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Re: Customs Union - isn't it good enough?

#201217

Postby avconway » February 14th, 2019, 2:21 am

johnhemming wrote:The nub of the issue, however, is that when you have a trade agreement it means that you do things that you would not otherwise do. Hence you are being required to do things as a consequence of the agreement. The point about the EU is that we (soon used to) participate in setting the rules. In the future we will have to follow some of those rules, but not participate in setting them to the same extent that we do at the moment.


Quite so, and that is exactly the point of the response I gave earlier: “I'm a Leaver, so to your question: “Is the Customs Union so bad that we can't live with it?” I respond with: “It depends upon the strings that come attached to CU membership.”

Within the Customs Union, what else would Britain be required to do that it would not otherwise do? Give away its fishing waters? Open its borders to immigrants on demand? Adopt the Euro? Leave or stay in Euratom?
Why so much obligatory linkage between disparate issues?

Why do trade agreements come with strings attached at all? If a British greengrocer and a Spanish wholesaler agree a deal in the sale and purchase of tomatoes in what way why or should that deal be linked with giving Spanish fishing boats access to British fishing waters? Why should the readiness of a Cardiff butcher to buy spiced sausages from a Polish butcher be linked in any way to Polish immigrants' being entitled to unfettered rights of access to Britain?

Those are four separate issues, each with its own merits and demerits, and each should be negotiated separately with the parties concerned, be they individual trading parties dealing with trading issues, or governmental parties dealing with wider issues. As soon as artificial linkages between unrelated issues are established horse-trading occurs - the doing of things you would not otherwise do.

johnhemming wrote:The nub of the issue, however, is that when you have a trade agreement it means that you do things that you would not otherwise do.

What sort of things? Why be obliged to do them? Things to your advantage? Or things like horsetrading? Like responding to arm-twisting? Doing wrong things for wrong reasons an so on.

johnhemming wrote:Hence you are being required to do things as a consequence of the agreement.

Of course – you give me tomatoes and I give you money, what we do is a direct and expected consequence of the agreement we have. What else should I be required to do? And if so, why?

johnhemming wrote:The point about the EU is that we (soon used to) participate in setting the rules. In the future we will have to follow some of those rules, but not participate in setting them to the same extent that we do at the moment.


I am not averse to the establishment or the following of rules, if and where necessary, if relevant to a known and agreed purpose, and if set and agreed by the parties concerned. On a recent thread I was lampooned for recalling that Phoenician and Cornish entrepreneurs used to trade tin without the intercession of governments to set the rules – the traders themselves set and administered the rules. I am surprised that in an age of neo-liberalism entrepreneurs themselves are no longer deemed able to set, agree, and follow the rules they themselves need for the trading of tomatoes, spiced sausages, aeroplane wings, or motor-car engines. What advantages are gained by the participation in rule-making of non-involved others, beyond the entrepreneurs themselves?

I am curious to learn, following Airbus Chief Executive Tom Enders' speech at Davos recently, what it is about Welsh-made /Broughton-made aeroplane wings – satisfactorily used by Airbus for decades - that will suddenly make them unsatisfactory after the end of March. Is it a design fault? Something inadequate in the materials used? Something intrinsic in the wings themselves? Or something artificial, quite unrelated to the quality or production of the wings themselves? Is Enders' threat to phase-out the use of Broughton-made wings a consequence of normal entrepreneurial deal-making, or a consequence of the intercession of trade-hindering rules obliging him to do things he would not otherwise do?

To return to my point on what is wrong with a Customs Union. It depends upon what extraneous strings are attached to the Customs Union. Why should deals between entrepreneurs not stand or fall on their own merits? Why should strings - why should “things you do as a consequence of the agreement” as johnhemming puts it – be attached to, or impinge upon, traders' deals? I am reminded of the things British Aerospace was required to do (by the Saudi counterparties) as a consequence of the trade agreement it made with prominent Saudi Arabian government figures. Beware deals and agreements that come with extraneous strings attached.

Cooperating with other countries around the globe, not merely with the 27, on all sorts of issues - environment, medical and scientific enquiry, crime and criminal repatriation, student exchange, the list is very long ... --- makes sense, but why does the EU think that so many of these issues have to be tied (with trade) into one obligatory bundle?

I apologise for a post full of questions, but there is much about the EU's interposing of itself between entrepreneurs - between willing buyers and willing sellers - which seems to have added complexity to the essentially simple activity of people trading goods and services with one another. Does it aim in general to hinder trade or facilitate it?

If the EU ceased to exist would it have to be re-invented?
If so, in its present form?

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Re: Customs Union - isn't it good enough?

#201223

Postby johnhemming » February 14th, 2019, 7:23 am

avconway wrote:If the EU ceased to exist would it have to be re-invented?

Over the millennia there have been many times in which common systems of rules have been generated across the continent to facilitate trade.

Personally I prefer a democratically accountable system of defining trade rules like the EU rather than the traders specifying the rules. However, the answer to your question is obviously yes.

At least it is yes as far as the continent goes. We, then, have the question as to what extent we participate and whether or not we participate in setting the rules.

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Re: Customs Union - isn't it good enough?

#201232

Postby Alaric » February 14th, 2019, 8:20 am

johnhemming wrote:At least it is yes as far as the continent goes. We, then, have the question as to what extent we participate and whether or not we participate in setting the rules.


The problem is that the EU has gone far beyond rules on trade into interference and regulation for the sake of it. Why for example did it think it had the right to overrule national governments and specify how olive oil should be served in restaurants?

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Re: Customs Union - isn't it good enough?

#201237

Postby GoSeigen » February 14th, 2019, 8:42 am

avconway wrote:I am curious to learn, following Airbus Chief Executive Tom Enders' speech at Davos recently, what it is about Welsh-made /Broughton-made aeroplane wings – satisfactorily used by Airbus for decades - that will suddenly make them unsatisfactory after the end of March. Is it a design fault? Something inadequate in the materials used? Something intrinsic in the wings themselves? Or something artificial, quite unrelated to the quality or production of the wings themselves? Is Enders' threat to phase-out the use of Broughton-made wings a consequence of normal entrepreneurial deal-making, or a consequence of the intercession of trade-hindering rules obliging him to do things he would not otherwise do?


If you write to the Executive Office of Airbus they might indicate which considerations affected their decision. I doubt JH could give you a better answer...


GS

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Re: Customs Union - isn't it good enough?

#201238

Postby Mike88 » February 14th, 2019, 8:45 am

How does being in the Customs Union respect the result of the referendum with no controls over immigration, fishing , trade etc? In essence belonging to to the Customs Union will mean we haven't left the EU at all! The majority voted against EU membership because they were fed up to the back teeth with taking orders from Brussels that had nothing to do with the original purpose of membership which was to establish a common market for trade.

The backstop opposition by the Irish is nothing more than a smokescreen because if we crash out with no deal there will have to be a hard border in order for the EU and UK to comply with WTO requirements. The referendum result gave MPs the instruction to leave the EU and clearly they are not up to the job. Like many I just want them to get on with it and that means to me not belonging to the Customs Union..

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Re: Customs Union - isn't it good enough?

#201242

Postby redsturgeon » February 14th, 2019, 9:02 am

GoSeigen wrote:
avconway wrote:I am curious to learn, following Airbus Chief Executive Tom Enders' speech at Davos recently, what it is about Welsh-made /Broughton-made aeroplane wings – satisfactorily used by Airbus for decades - that will suddenly make them unsatisfactory after the end of March. Is it a design fault? Something inadequate in the materials used? Something intrinsic in the wings themselves? Or something artificial, quite unrelated to the quality or production of the wings themselves? Is Enders' threat to phase-out the use of Broughton-made wings a consequence of normal entrepreneurial deal-making, or a consequence of the intercession of trade-hindering rules obliging him to do things he would not otherwise do?


If you write to the Executive Office of Airbus they might indicate which considerations affected their decision. I doubt JH could give you a better answer...


GS


A380 wings won't be needed after 2021 when the A380 will no longer be built. Unrelated to brexit of course, but the decision will free up capacity on the mainland which may prove more commercially viable when future investment decisions are made.

John

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Re: Customs Union - isn't it good enough?

#201243

Postby johnhemming » February 14th, 2019, 9:03 am

Alaric wrote:
johnhemming wrote:At least it is yes as far as the continent goes. We, then, have the question as to what extent we participate and whether or not we participate in setting the rules.


The problem is that the EU has gone far beyond rules on trade into interference and regulation for the sake of it. Why for example did it think it had the right to overrule national governments and specify how olive oil should be served in restaurants?

Whereas I have argued in the past (and would argue) for a reduction of the areas in which the EU intervenes the argument currently is IN or OUT. Hence if it is that important to you as to how olive oil is served and what effect the EU has on it such that you will essentially shut down the car industry then that is a position you can take. I disagree.

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Re: Customs Union - isn't it good enough?

#201269

Postby ursaminortaur » February 14th, 2019, 10:34 am

avconway wrote:
wickham wrote:Is the Customs Union so bad that we can't live with it? Presumably the EU has deals with most countries or world blocks so could the UK realistically do any better?



I'm a Leaver, so to your question: “Is the Customs Union so bad that we can't live with it?” I respond with: “It depends upon the strings that come attached to the CU.”

Will membership of the CU prevent Britain from deciding her own immigration policies, her own fishing policies across all her territorial waters, her own human rights policies, passing and repealing her own laws and negotiating her own trading deals with whomsoever she may wish?


Being in a Customs Union only prevents the UK signing its own FTAs. Freedom of movement is a requirement of full membership of the Single Market not membership of a Customs Union. The other areas mentioned Fishing policy, Human rights and application of EU laws are also outside the scope of a Customs Union (with the exception of the relatively small number of rules actually covering the operation of the CU such as having to implement the Common External Tariff and abiding by the Common Commercial Policy ie delegating the ability to negotiate FTAs with other countries to the EU commission).

To really solve the NI border problem though a Customs Union on its own won't be enough. Hence both May's backstop and Corbyn's ideas for a Customs Union also involve the idea of alignment of regulation which basically means also adopting a lot of the Single Market rules at least on Goods. This isn't full membership of the Single Market but in effect shadowing Single Market rules which therefore doesn't require Freedom of Movement to be allowed. Such shadowing though would require some level of oversight which will either directly or indirectly be via the ECJ.

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Re: Customs Union - isn't it good enough?

#201278

Postby Sundance13 » February 14th, 2019, 11:07 am

ursaminortaur wrote:
avconway wrote:
wickham wrote:Is the Customs Union so bad that we can't live with it? Presumably the EU has deals with most countries or world blocks so could the UK realistically do any better?



I'm a Leaver, so to your question: “Is the Customs Union so bad that we can't live with it?” I respond with: “It depends upon the strings that come attached to the CU.”

Will membership of the CU prevent Britain from deciding her own immigration policies, her own fishing policies across all her territorial waters, her own human rights policies, passing and repealing her own laws and negotiating her own trading deals with whomsoever she may wish?


Being in a Customs Union only prevents the UK signing its own FTAs. Freedom of movement is a requirement of full membership of the Single Market not membership of a Customs Union. The other areas mentioned Fishing policy, Human rights and application of EU laws are also outside the scope of a Customs Union (with the exception of the relatively small number of rules actually covering the operation of the CU such as having to implement the Common External Tariff and abiding by the Common Commercial Policy ie delegating the ability to negotiate FTAs with other countries to the EU commission).

To really solve the NI border problem though a Customs Union on its own won't be enough. Hence both May's backstop and Corbyn's ideas for a Customs Union also involve the idea of alignment of regulation which basically means also adopting a lot of the Single Market rules at least on Goods. This isn't full membership of the Single Market but in effect shadowing Single Market rules which therefore doesn't require Freedom of Movement to be allowed. Such shadowing though would require some level of oversight which will either directly or indirectly be via the ECJ.


I won’t repeat the points Ursanminotaur has already explained in expert detail, but for me whether or not Corbyns CU idea is a good one, depends on whether or not we’d be able to get the input/influence on new deals that he has suggested (unlikely IMO) and whether or not inclusion in a CU means existing & new deals mean the UK automatically benefits from its exports to those countries.

My understanding is Turkey in its CU deal with the EU, doesn’t automatically benefit from tariff free access to countries the EU does deals with, as it isn’t part of the CCP?

So really we’d need some sort of associate membership of the CCP.

Personally I think if we got the above it’s worth it as it’s increasingly clear we’d never be able to negotiate or agree as good a deal as the EU. We lack the experience, skill & size. Better to take our seat in the WTO and start to redevelop ties, do informal deals etc, start to build up our competence.

Given Fox & his team have only managed to rollover 7/70 of the EUs FTAs, it sounds like we’ve got a lot to learn.

If though we can’t get the sort of deal outlined & it was a Turkey style CU, personally I wouldn’t bother.

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Re: Customs Union - isn't it good enough?

#201315

Postby avconway » February 14th, 2019, 12:30 pm

johnhemming wrote:
avconway wrote:If the EU ceased to exist would it have to be re-invented?

..., the answer to your question is obviously yes.

Personally I prefer a democratically accountable system of defining trade rules like the EU rather than the traders specifying the rules.



Thank you for responding, but I think my wondering about where, to what end and by whom trading rules are made has been misunderstood. (And perhaps we define “democratically” differently)

I see as democratic a situation whereby a greengrocer (no matter whether in Britain or elsewhere) and a market-gardener (no matter whether in Spain or elsewhere) freely agree between themselves – being the entities most closely interested – the terms of, say, a trade in tomatoes.

In what way can the intercession of the EU – not being one of the parties concerned – be regarded as an accountable enhancement of the deal? Or as "democratic"?

And whose interests would be served by the EU's intercession – the buyer's, the seller's or third parties unknown? (Perhaps a clique of tomato-growers in the Netherlands ?)

Who would require the EU's intercession in the tomato deal, and who would specify its purposes and the (extraneous?) terms to be imposed upon the greengrocer and market-gardener? Perhaps our tomato-growers in the Netherlands, for their own purposes, might "advise" or lobby the EU?

I return to a theme of mine – I see trade as essentially a simple - and eminently democratic - activity between willing entrepreneurs, until parties unconcerned and with other purposes in mind, interpose themselves.

avconway

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Re: Customs Union - isn't it good enough?

#201326

Postby johnhemming » February 14th, 2019, 12:46 pm

avconway wrote:I see as democratic a situation whereby a greengrocer (no matter whether in Britain or elsewhere) and a market-gardener (no matter whether in Spain or elsewhere) freely agree between themselves – being the entities most closely interested – the terms of, say, a trade in tomatoes.

One of the debates was about the question as to how one determines the distinction between top grade bananas, those which are grade 1 and those which are grade 2. The question as to the bendyness of the banana was an issue. Rules on the qualities of tomatoes exist as well. To be "rules" they have to cover more than a single contract between two parties. The jurisdiction of the rules (be it a city, country, or continent) is another issue.


avconway wrote:In what way can the intercession of the EU – not being one of the parties concerned – be regarded as an accountable enhancement of the deal? Or as "democratic"?

The EU rules are agreed by the representatives of national governments and people directly elected by citizens in the EU. That is a democratic process.

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Re: Customs Union - isn't it good enough?

#201360

Postby Charlottesquare » February 14th, 2019, 3:14 pm

avconway wrote:
johnhemming wrote:
avconway wrote:If the EU ceased to exist would it have to be re-invented?

..., the answer to your question is obviously yes.

Personally I prefer a democratically accountable system of defining trade rules like the EU rather than the traders specifying the rules.



Thank you for responding, but I think my wondering about where, to what end and by whom trading rules are made has been misunderstood. (And perhaps we define “democratically” differently)

I see as democratic a situation whereby a greengrocer (no matter whether in Britain or elsewhere) and a market-gardener (no matter whether in Spain or elsewhere) freely agree between themselves – being the entities most closely interested – the terms of, say, a trade in tomatoes.

In what way can the intercession of the EU – not being one of the parties concerned – be regarded as an accountable enhancement of the deal? Or as "democratic"?

And whose interests would be served by the EU's intercession – the buyer's, the seller's or third parties unknown? (Perhaps a clique of tomato-growers in the Netherlands ?)

Who would require the EU's intercession in the tomato deal, and who would specify its purposes and the (extraneous?) terms to be imposed upon the greengrocer and market-gardener? Perhaps our tomato-growers in the Netherlands, for their own purposes, might "advise" or lobby the EU?

I return to a theme of mine – I see trade as essentially a simple - and eminently democratic - activity between willing entrepreneurs, until parties unconcerned and with other purposes in mind, interpose themselves.

avconway


Your arguments holds if nobody eats the tomatoes, but given the importer wishes to sell them in his home market who is looking out for the rights of the consumer re say the pesticides used in the production of the tomatoes and his/her consumption of same?

So, to protect the end users, you implement a system of control re how the item is produced. Where then lies the controlling party re this quality control, in the country of the producer or the country of the end user, or do the governments of both agree a joint entity to decide?

Once control in quality is determined over subsequent years scientific research then indicates that x pesticide has harmful effects re the end user, so standards cannot merely be set at the outset and ignored, a framework is needed to allow for changes in standards over subsequent generations.

Your government hands off approach will only work until something happens, a slew of deaths, a failure re an aeroplane wing, at which point some process to control the quality of what is sold will be required.

The catch in allowing the traders in the product to be the only parties to the trade is you remove any rights of those who use the product to be protected, where does this end, people setting up banks without supervision and individuals losing their life savings, insurance products that do not pay out on loss, unregulated ponzi schemes.

It is with this aspect that fully unregulated trade falls down, this then of course begs the question, what level and extent of consumer/user protection is acceptable and necessary and who/what/where monitors same?


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