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free trade Archive

Thursday

29

January 2009

0

COMMENTS

A Last Minute Attack On Free Trade

Written by , Posted in Free Markets

The Washington Post reports on some regulatory parting shots the Bush administration took on free trade.

In its final days, the Bush administration imposed a 300 percent duty on Roquefort, in effect closing off the U.S. market. Americans, it declared, will no longer get to taste the creamy concoction that, in its authentic, most glorious form, comes with an odor of wet sheep and veins of blue mold that go perfectly with rye bread and coarse red wine.

The measure, announced Jan. 13 by U.S. Trade Representative Susan C. Schwab as she headed out the door, was designed as retaliation for a European Union ban on imports of U.S. beef containing hormones. Tit for tat, and all perfectly legal under World Trade Organization rules, U.S. officials explained.
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Besides, they said, Roquefort is only one of dozens of European luxury products that were attacked with high tariffs. The list includes, among other things, French truffles, Irish oatmeal, Italian sparkling water and “fatty livers of ducks and geese,” which apparently is how Washington trade bureaucrats say foie gras.

While none of these particular barriers are going to have significant economic impact in America, this is simply bad policy.

Playing tit for tat with trade barriers may have emotional appeal, but it makes little sense practically, as we’re hurting ourselves almost as much as them when we do it.  Moreover, we’re just encouraging others when they play these games.  There’s little chance these tarrifs will get Europe to rethink their beef policy, and cutting off our nose to spite our face does not constitute good policy.

Sunday

17

August 2008

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COMMENTS

Free Trade Defeats Terrorism?

Written by , Posted in Foreign Affairs & Policy, Free Markets

Given the current political climate, I suppose I should be happy to see an op-ed coauthored by two left-leaning individuals arguing for free trade. However, I must take issue with the central premise of their case.

When trade flares up as a political issue — as it is likely to do in the presidential campaign this year — one aspect of the debate is almost always neglected. There is a fierce competition among foreign countries to sell their products here, in the United States, the largest commercial market in the world.

Moreover, by opening up our market to Muslim countries, we could not only help American consumers, but also serve a larger strategic goal: that of boosting the economies which now produce large pools of unemployed, embittered youth. We can make trade an effective weapon against terrorism.

Our tariff regime puts many nations in the Middle East, whose young people are susceptible to the sirens of Islamic fundamentalism, at an unintended disadvantage. This works against our efforts to stamp out jihadism. Fortunately, the problem is easy to fix.

First off, putting others at a disadvantage is exactly the intention of tariffs.  But that’s a minor quibble.  My real concern is with the flawed understanding of jihad exhibited in this argument.  The implication is that, if only they weren’t poor, there wouldn’t be so much terrorism.

There is little evidence to support this claim.  The few empirical studies on the matter have indicated no direct relationship between poverty and support for terrorism.  If anything, there’s a reverse correlation.  The 9/11 hijackers were not poverty stricken youths with no opportunity.

They were not born to be soldiers — none seems to have come from a military background — and there was little in their early lives to suggest that they would become what they did. The pilot of the first plane to hit the World Trade Center, Atta, came from “an ambitious, not overtly religious middle-class household in Egypt” and had led “a sheltered life” until he arrived in Hamburg, Germany, in 1992 to do graduate study in architecture. The pilot of the second plane, Marwan al-Shehhi, was an amiable, “laid-back” fellow from the United Arab Emirates who had joined the UAE army, “not the world’s most effective fighting force but one of its most generous, paying [its scholarship] students monthly stipends of about $2,000,” which may have been his primary reason for enlisting; this enabled him to go to Hamburg, though there is little evidence that he “had any serious scholarly ambitions.”

Hani Hanjour, the Saudi pilot who flew American Airlines flight 77 into the Pentagon, “had lived in the United States off and on throughout the 1990s, mostly in Arizona, intermittently taking flying lessons at several different flying schools.” He was, in the view of one of his flight instructors, “intelligent, friendly, and ‘very courteous, very formal,’ a nice enough fellow but a terrible pilot.” He finally got a commercial license from the FAA but was unable to find work here or in the Middle East. As for Ziad Jarrah, the pilot of the plane that crashed in Pennsylvania, he was “the handsome middle child and only son of an industrious, middle-class family in Beirut,” a “secular Muslim” family that “was easygoing — the men drank whiskey and the women wore short skirts about town and bikinis at the beach.” At university in Germany he met Aysel Sengün, “the daughter of conservative, working-class Turkish immigrants”; eventually they got married, but he disappeared for long periods, usually without explanation, leaving her frantic.

The benefits of free trade are myriad and, to anyone who bothers to observe the evidence, undeniable; but I see little evidence to suggest that defeating jihad is among them.

Tuesday

26

December 2006

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COMMENTS

Protectionism Rears Its Ugly Head

Written by , Posted in Economics & the Economy

Democratic Senators Byron Dorgan and Sherrod Brown put their heads together and came up with this execrable assault on good sense. They get off to a fast start, loading the first paragraph to the hilt with lies and irrelevances.

Fewer and fewer Americans support our government’s trade policy. They see a shrinking middle class, lost jobs and exploding trade deficits.

Let’s take this one bit at a time. Shrinking middle class? Well, yes, but not how Senators Dumb and Dumber would have you believe. The upperclass is growing as both the middle and lower classes shrink. Hardly something to complain about.

Lost jobs? What lost jobs? Unemployment is nearing record lows.

Exploding trade deficits? Who cares. That boogeyman has always been more form than substance. Trade deficits are not a particularly good indicator of anything, though they do make good soundbytes for opportunist populists.

Rob at Say Anything does a good job exposing the rest of the article’s nonsense.

William Overholt, in another WaPo op-ed, takes on the protectionists and their faulty assumptions.

Visit FreeTrade.org for more on the benefits of free trade.

Friday

15

September 2006

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COMMENTS

Brilliant “Market-Based” Solution Proposed For The “Trade Deficit”

Written by , Posted in Economics & the Economy

Cato-at-liberty reports.

Two Democratic senators, Byron Dorgan of North Dakota and Russ Feingold of Wisconsin, have proposed that any company wishing to import goods into America would need a government-issued certificate. The senators, according to this New York Times article (link requires subscription), view this as a “market-based system to cut the trade deficit to zero within 10 years.”

. . .Sherman Katz of the Carnegie Endowment for International Peace was quoted in the article as saying that “it looks on the face of it to represent an enormous intrusion of government activity into business totaling trillions of dollars each year.”

“Enormous” doesn’t seem to quite capture it though, does it? How about “insane?”

Can you imagine the type of federal oversight this would require? And how would our trade partners react to the U.S. market being restricted in this way?

I wonder, what does one call a “market-based” solution that relies entirely on government? Nuanced.