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Imperial industries and with regard to the calculated rate of returnto
Accord's suppliers.
 A twelve percent rate will reduce many imports to nothing, and the purpose
of the talks was to further trade, to make it fair, but not to stop it.
Actually, Accord's industry could make money so long as the top rate stayed
below fifteen percent. In any case, the minibits were important but not the
entire battle.
 Lord Whaler, here are the supplementary figures. Chart OneB, please, Devon.
Chart One B appeared in place of themicrominibit tariff schedule. On it were
the volumes of Accord exports to Terra, the existing tariff rates, the revenue
to the Empire, followed by a second column showing the volume of imports from
Accord projected under the External Affairs proposal.
 As you can see, even with our proposal, the volume of imports from Accord
will decrease only ten percent, but the increase in the effective price will
give our manufacturers enough leeway to compete.
The problem with the External Affairs proposal was that it put too much duty
on the more complex minibits, where the emerging and continuing market was
likely to be, and too little on the simpler, lower profit minibits. Plus,
accepting the idea of a moresteeply graduated schedule left the door open for
further steepening and set a dangerous precedent.
Nathaniel dug a memorandum from his datacase. Stripped of all the technical
nomenclature, it basically stated that the Accord microprocessing industry had
developed the capability of producing triple minibits which could do the work
of Imperial quintuple minibits produced by theNoram microprocessors. The terms
triple and quintuple were misnomers, since a singleminibit referred to a
million gate choice, and each level multiplied by ten. He handed the
memorandum to Janis.  As this indicates, there is likely to be a problem of
description.
He sat back and waited for her to read the two page technical summary.
After Janis read it, she passed it on to the console staffer, who scanned
both pages into the data banks and passed it on to Lord Jansen.
 He's right, announced the data tech after several minutes at the console.
Jansen, beginning to lose his bored look, started to lean forward in his
swivel.
 This could set us back to square one.Lord Whaler. Why did you even bring it
up?
 Several reasons. First, not to bring it up risks the Empire declaring that
we have bargained in bad faith. Second, the information points out the error
in using a graduated tariff based on an artificial distinction. Third, the
problem has to be resolved.
 See your point, observed Jansen.  So what do you suggest? snapped Janis.
 You brought the problem to our attention. You must have some suggestions.
 Already, it appeared likely some questions were arising over the point at
which the maximum level of the tariff should be assessed. Is that not true?
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 That's true. That's a question on any graduated schedule. What does that
have to do with this?
The Ecolitan shrugged, as if the answer were obvious, even to a dullard like
the Envoy from Accord. ,
 Simple Envoy that I am, it seems obvious that the problems lie not in the
articles being taxed but in the tax structure. If the schedule is not
graduated, then using different names for equipment all doing the same job
will not matter.
 Are you suggesting a flat rate for all minibits? Nathaniel avoided a direct
answer.  What would be the average of costs to Accord, given a flat rate of
nine percent?
 That's low, answered Janis,  but let's see it, Devon. Nathaniel already
knew the answer. Under the current trade flows inmicrominibits, a nine percent
rate would reduce the tariffs Accord paid the Empire by about two percent.
Assuming a decrease in Accord exports to the Empire of ten percent, a tariff
rate of nine and a half percent would give the Empire a comparable increase in
tariff revenues,
The numbers flashed up into the midair holo display.  You'll get even more of
a break at nine percent, protested Janis,  and the present situation is
already unacceptable.
 Nine and one half, offered Nathaniel. No one said anything until the next
display appeared, showing the figures outlining the results of his suggestion.
 That would be somewhat of an improvement, but I hope that Accord would be
somewhat more flexible, said Jansen,  particularly given the higher volume of
trade in multiple minibits.
Nathaniel began to play around with his computer, finally threw up his hands.
 What about ten percent?
At the ten percent rate, the Imperial figures showed close to a twenty
percent reduction in imports from Accord, and slightly more revenue to the
Imperial treasury.
Nathaniel's estimation of the economists at the Ministry of External Affairs
took a nosedive. No commodity was that price-elastic over a half percent.
Plus, it was apparent that no one had calculated the impact of technological
change. He frowned.  Nine and three quarters as a final offer? he asked.
 Ten! Jansen declared before Janis could say anything.  But the loss! A true
increase in tariffs...this represents nearly forty percent...but  protested
Nathaniel.
 Lord Whaler, for several years now, many of our microprocessors have been
suffering because tariffs were too low. It's not just the present situation
the Emperor must consider. There are many other factors ... Janis let her
voice trail off.
 Ah, yes, I understand' other factors.'While I would prefer the nine and
three quarters rate, for the sake of agreement, we will accept ten percent.
What else can I do? The Ecolitan shrugged.
 For the sake of making progress, let us close the discussion on this item,
suggested Jansen.  Of course, we will have to clear this with the Emperor and
the full Ministry staff.
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