{"id":28437,"date":"2014-10-30T00:02:06","date_gmt":"2014-10-30T04:02:06","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=28437"},"modified":"2014-10-29T07:36:28","modified_gmt":"2014-10-29T11:36:28","slug":"free-trade-deals-usually-have-little-to-do-with-actual-free-trade","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2014\/10\/30\/free-trade-deals-usually-have-little-to-do-with-actual-free-trade\/","title":{"rendered":"“Free Trade” deals usually have little to do with actual free trade"},"content":{"rendered":"

It’s not exactly a revelation that what politicians call “free trade” agreements are usually tightly constrained, regulated, and micro-managed trade: almost the exact inverse of what a genuine free trade deal would look like. This is primarily because politicians and diplomats have hijacked the original term to describe modern mercantilism. In The Diplomat<\/em>, Ji Xianbai<\/a> looks at how so-called free trade negotiations are little more than diplomatic beat-downs of the weaker parties by the stronger:<\/p>\n

The classic mercantilism, the one associated with the idea that the precious metals obtained through a favorable balance of foreign trade were essential to a powerful nation, may be historically obsolete. The core of the mercantilist view, namely that self-interested states maximize economic development by optimizing political control to strengthen national power, is very much alive and well. Indeed, the vitality of mercantilism as a state of mind may have infiltrated every corner of the international political economy. If one considers the essence of mercantilism through Robert Gilpin\u2019s definition \u2013 the attempt of governments to manipulate economic arrangements in order to maximize their own interests \u2013 multiple examples immediately come to mind: Japan\u2019s \u201ceconomic totalitarianism\u201d system in which the entire society was united in deterring foreign competition in the postwar period, China\u2019s ascendance since 1980s through an export-led development mode underpinned by a deliberately undervalued currency, and Germany\u2019s unprecedented trade surplus accrued from the stringent austerity imposed on its economy to sustain competitiveness in the aftermath of the euro crisis.<\/p>\n

Compared to those national triumphs of classic mercantilism, there is a less visible showroom, but one in which mercantilism presents itself over and over again in the form of legal mercantilism. This would be free trade agreements (FTAs), negotiations of which are usually kept in the dark. In bilateral FTA negotiations, legal mercantilist governments endeavor to impose their own (or desirable) trade rules and economic policies on other sovereign countries, usually with the aid of a combination of economic immensity, political hegemony, and asymmetric trade dependence, to create a sort of \u201cinternational best practice,\u201d favorable trade rules, and legal gains that can be leveraged and multilateralized at a regional and\/or global level. The \u201ccompetitive liberalization\u201d strategy aptly pursued by the U.S. since 2002 is one such legal mercantilist policy, which aims to create another \u201cgold standard\u201d in international trade standard setting to project U.S.-friendly economic policies all over the world. In short, the U.S. expects the trade policies of other nations to follow those of the U.S., in the same way that their currencies used to peg to the U.S. dollar.<\/p>\n

The U.S.\u2013Peru FTA (PTPA) marks the very first success of Washington\u2019s attempts to subordinate other countries\u2019 sovereignty to its own national interest by squeezing non-trade-related provisions into a bilateral trade liberalization agreement and overriding foreign national laws. To provide a level playing field for American companies, the PTPA lays out detailed measures that Peru is obliged to take to govern its forest sector. The Forest Annex of the PTPA requires Peru to set up an independent forestry oversight body and even enact new Forestry and Wildlife Laws to legalize key provisions of PTPA. The U.S.\u2013Colombia FTA (CTPA)\u2019s labor provisions represent an \u201ceven more blatant assault on another country\u2019s sovereignty.\u201d Meanwhile, Colombia was forced to agree to establish a dedicated labor ministry; endorse legislations outlawing interference in the exercise of labor rights; double the size of its labor inspectorate; and set up a phone hotline and an internet-based system to deal with labor complaints. Examples of similar provisions abound: Don\u2019t forget that the U.S.-Panama FTA has \u201chelped\u201d revamp Panama\u2019s tax policy on behalf of Panamanians.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

It’s not exactly a revelation that what politicians call “free trade” agreements are usually tightly constrained, regulated, and micro-managed trade: almost the exact inverse of what a genuine free trade deal would look like. This is primarily because politicians and diplomats have hijacked the original term to describe modern mercantilism. In The Diplomat, Ji Xianbai […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[465,25,13],"tags":[399,432,320,410,856,761],"class_list":["post-28437","post","type-post","status-publish","format-standard","hentry","category-americas","category-economics","category-usa","tag-colombia","tag-diplomacy","tag-freetrade","tag-mercantilism","tag-panama","tag-peru"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-7oF","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/28437","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=28437"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/28437\/revisions"}],"predecessor-version":[{"id":28438,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/28437\/revisions\/28438"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=28437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=28437"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=28437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}