King of All I Survey
Chapter 125: Galactic Trade Agreements and Loopholes

Chapter 125: Galactic Trade Agreements and Loopholes

"So, I’m kind of making this up as I go along," I warned Joe as I sat in the Lookout tower discussing interstellar exploration and galactic politics, "but here’s where I’m going with my plan. Do other empires honor the Galactic Union license system? Or do they have their own systems?"

"Both, The Galactic Union and other major empires use a reciprocal licensing system. They honor each other’s claimed intellectual and unique planetary property rights. If a Galactic Union member wants to have ssshssshsh for breakfast, a glandular secretion of a certain sea-dwelling creature from a planet within the Rim-ward Empire, they must license it through the Galactic Empire. The price would include the full fee charged by the Rim-ward Empire and an additional tax or duty levied by the Galactic Empire. Generally, about twenty percent for empires with preferred status, or fifty percent for those without preferred status."

"So, they want to discourage their citizens from buying products from other empires?"

"Yes, as the largest market in the galaxy, they want to keep their credits within the empire to the extent possible."

So, what if a Rim-ward Empire person wants to buy from the Galactic Empire?" I asked.

"They can do so, paying the GU price, plus any additional amount levied by their own governing authority. Generally, twenty percent for GU, products. Remember, the Galactic Empire also has the largest offering of products and technologies since they have the most member nations. Don’t forget that worlds newly discovered by the GU’s very active exploration and trading agents sign an exclusivity agreement. Just as Earth agreed not to trade with anyone outside the GU, all new worlds signed by the GU do the same. Not only does the GU control the products of member states, but also those provisional worlds under temporary protections contracts. The trade agreements remain in force, even if the protection contract lapses, by the way."

"Wait, so we’re stuck with only selling through the GU, forever?"

"Yes. Unless the GU agrees, at their sole discretion, to modify the contract. Did you not read it before you signed your planet into a perpetually binding agreement?"

I scowled, "I did. I mean you know, I was eight, and maybe I didn’t think about forever or that aliens wouldn’t be fair..."

"You’re still eight," Joe reminded me.

"Yes, but now I’m a worldly and experienced eight."

Joe laughed at the important distinction I had made, but he did agree, "Of course, you are."

"So, listen, though. As I understand it, the contract specifically covers Earth derived products or Earth-developed technologies and IP. Right?"

"Yes, everything in that category."

"But it doesn’t apply to non-Earth products for which Earth might obtain exclusive trading rights..."

"Yes, but it does say that you may not purchase from any third-party licensing authority. In other words, you must buy everything from the GU."

I grinned like a wolf who figured out how to open the gate to the sheep pen, and I was kind of glad I didn’t say that out loud. I’m pretty sure Joe would have laughed at me again. Anyway, what I did say was, "Not quite. It says ’third-party’ licensing authorities. It doesn’t apply if Earth itself IS the Licensing authority."

"Hmmm... Technically, that’s true. They would challenge that interpretation, legally, though."

"What do you mean?"

"They would file a formal petition with the licensing bureau AI, declaring a violation of the basic intent of the treaty, and require you to formally defend your position. They would then refute your defense and try to tie you up in the process for as long as possible. During that time, both sides would be barred from acting upon the matter. You could not buy or sell new products not licensed through the GU, and the GU could not import any of the new products until the matter is fully resolved."

"Wait, that hurts us on both ends and them really on neither. We don’t earn any revenue and all they do is wait for the new products and continue status quo," I complained.

"Yes. That’s the point."

"So, what if I asked the AI, which I assume is really just another aspect of you (a fact they don’t realize) to rule on the matter ahead of time? And had that ruling in hand before it became a point of contention?"

"You are a more worldly and experienced eight-year-old than you were before," Joe chuckled, "If the wording of that requests is very general, in nature, and does not specifically mention the GU, or the specific existing contract, but just a clarification of a general point of law, then the GU need not be informed of the request and need not be offered a chance to refute it since the requests does not change any aspect of their current laws, but simply asks for clarification. It’s a sneaky work-around, that is permitted within the framework of the law."

"Excellent!" I said smugly, "Joe, I formally request that ruling. Can it be done confidentially, so the GU doesn’t get wind of it?"

"If they are not party to the request, they do not have a right to be notified. It goes into the legal system under seal."

"Ok, make it so."

"Acknowledged. The request is filed. Your point of clarification is approved. ’Third-party’ in this licensing agreement, does not, by definition, refer to either the first-party or the second-party. You may buy and sell products licensed through Earth itself, and make them available," my smile grew, then faded, "but only to the Galactic Union."

"Wait, what? The GU still gets exclusivity?"

"Yes, Earth may not sell or offer products to third-party licensing authorities. You may sell such products to the Galactic Union, or to worlds included in an Earth-managed licensing authority only."

"Hmmm. So, we would still have a monopoly on products from those new worlds. We’d just have to sell them exclusively to the GU, or our own member worlds -which don’t have credits to buy them with. So, they’d have our ten percent tacked on and the GU would take, what? Any percentage we agreed to in a per item contract as if it were an Earth product?"

"You could try that, but technically, they could add a fifty percent surcharge for worlds without a specific GU trading contract or a preferred status."

"Could we get a preferred status for all products that Earth offers or buys, that somehow includes products from other worlds, without the GU realizing it?"

"The GU is unlikely to sign a new or amended contract unless they gain something by doing so."

"OK, then, let’s say I approach them and tell them that as a worldly and experienced trader, I’d like to change Earth’s trading status. I just found out about this preferred status thing, and I want that for Earth."

"You get the same low duty rate under the protection contract as if you had preferred status, there’s not point to that," Joe observed.

"Look, Joe, I’m eight-years-old. I just like the idea of Earth being called a preferred trading partner. Oh, by the way, can it say something about other worlds controlled by Earth, too. I mean, we have like seven other planets in our solar system."

Joe laughed. "You are tricky. The whole reason they allowed you to be declared leader of the Earth System in the first place is because they thought it would be easy to take advantage of you, as a mere child."

"Exactly! So what do you think, can you draw up something that sounds like I’m just a petulant child, but has iron-clad language that allows Earth to offer goods from Earth-aligned planets."

"They’ll still want to take advantage of your ’petulance’ by gaining something of value in exchange for the amended agreement."

"How about our share of the refueling station?" I asked.

"I’d advise against it, that is very valuable," Joe said.

"Oh, Joe, you’re so naïve," I smirked and rolled my eyes the way Mom and Dad did when I said something childish.

"Am I?"

"Yes, that refueling station becomes absolutely worthless from the moment it goes into operation."

"Any sabotage or damage to the station would be an act of war, even if you still owned a piece of it."

"I’m not going to damage it, Joe. Earth is going to outcompete it. It just so happens that a refueling station to allow research ships to top off before jumping into intergalactic space to get farther out of the gravity well, isn’t required at all, because Earth has a new proprietary, trade secret technology that allows us to offer ship transport to such points, in a single jump, without the need for near light-speed angular momentum prior to the jump. We can even jump them back as soon as they request a return through normal Interdimensional Communication."

"Oh," Joe laughed out loud, "I am naïve after all. I hadn’t considered that. And that is why I like you, King Tim. And it’s one reason I don’t get bored with eternity. Life, as it happens, is unpredictable until its observed."

"Well, then you should stick with me, Joe. I’m a regular Easter basket filled with unpredictably colored eggs... or something with unpredictable things that pop out, at unpredictable times..." I faltered trying to find the words for what I was trying to say.

"You are indeed full of Easter eggs!" Joe laughed. "Meanwhile, your mother, as Maribel/ Susan would like propose an idea for another way to repair the post-drug cartel economies of Guatemala, Colombia and other third-world countries, but as a policy matter, it requires the approval of the Supreme Ruler of the Entire Earth Solar System and Nearby Space since it involves the allocation of royal funds."