Quotulatiousness

December 13, 2015

The TPP is pretty far from being a genuine “free trade” deal

Filed under: Bureaucracy, Business, Economics, Environment — Tags: , , , — Nicholas @ 03:00

Last week, Kevin Williamson attempted to explain why the Trans Pacific Partnership isn’t all that similar to an actual “free trade” agreement (and why that’s so):

Prominent among the reasons to look askance at TPP is that its text calls for the incorporation — sight unseen — of whatever global-warming deal is negotiated at the conference currently under way in Paris. It is one thing for a trade deal to incorporate changes to environmental practices — regulatory differences are an inhibitor of truly liberal trade — but there is a world of difference between incorporating specific environmental policies and incorporating environmental policies to be named later.

It would be preferable if we could simply enact a series of bilateral “Goldberg treaties,” so called in honor of my colleague Jonah Goldberg, who argued that an ideal free-trade pact would consist of one sentence: “There shall be free trade between …” But the unhappy reality is that the snouts of the nations’ sundry regulatory apparatuses are so far up the backsides of various industries and economic sectors that sorting them out requires thousands of pages of text. Consider, for example, the problem of defense-acquisition practices. Some countries have rules mandating that defense procurement be restricted to domestic firms, and some countries don’t. Coming up with a harmonized, one-size-fits-all approach is difficult; we Americans, accustomed as we are to operating in an economy that produces the best of almost everything in the world, sometimes forget that there are countries with no domestic aerospace industry or sophisticated manufacturers of military materiel. Of course Kuwait goes abroad for military gear; if memory serves, at one point their air force uniforms were made by Armani.

[…]

All of which is to say, we should expect trade deals, especially multi-lateral trade deals, to be complex, and we should expect environmental and labor standards, along with government procurement procedures and the like, to be part of the accord. There’s no getting around it. And, again, there is nothing wrong in principle with using trade accords, which have real economic bite, as a critical instrument for enforcing environmental rules and other regulatory reforms that are incorporated into trade relationships. But using TPP to commit the United States to whatever is cooked up in Paris, without an additional vote in Congress, is a poor tradeoff. It’s not often that I will turn up my nose at a trade deal — even far-from-perfect trade pacts are generally desirable — but here we should draw the line. TPP was negotiated, Congress and the public have had a chance to review the text, and Congress should reject it. That’s the system working, not the system failing to work. It’s why we have votes.

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