Central Planning

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Anti-globalization activists are preparing to launch a series of demonstrations targeting negotiations on the Central American Free Trade Agreement, a follow-up to the North American Free Trade Agreement. The activists claim that this will magnify the effects of the "now-infamous" NAFTA in the U.S. and extend them to Central America. One can only hope.

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  1. You’re confusing “free trade” with free trade, Julian. You don’t need an unelected and unaccountable body that meets in secret to have free trade. Like most of what the corporate whores call “free trade,” NAFTA is just warmed-over mercantilism. Reminds me of Joseph Stromberg’s recipe for “How to Have Free Trade”:

    “For many in the US political and foreign policy Establishment, the formula for having free trade would go something like this: 1) Find yourself a global superpower; 2) have this superpower knock together the heads of all opponents and skeptics until everyone is playing by the same rules; 3) refer to this new imperial order as “free trade;” 4) talk quite a bit about “democracy.” This is the end of the story except for such possible corollaries as 1) never allow rival claimants to arise which might aspire to co-manage the system of “free trade”; 2) the global superpower rightfully in charge of world order must also control the world monetary system….
    “The formula outlined above was decidedly not the 18th and 19th-century liberal view of free trade. Free traders like Richard Cobden, John Bright, Frederic Bastiat, and Condy Raguet believed that free trade is the absence of barriers to goods crossing borders, most particularly the absence of special taxes – tariffs – which made imported goods artificially dear, often for the benefit of special interests wrapped in the flag under slogans of economic nationalism….
    “Classical free traders never thought it necessary to draw up thousands of pages of detailed regulations to implement free trade. They saw no need to fine-tune a sort of Gleichschaltung (co-ordination) of different nations labor laws, environmental regulations, and the host of other such issues dealt with by NAFTA, GATT, and so on. Clearly, there is a difference between free trade, considered as the repeal, by treaty or even unilaterally, of existing barriers to trade, and modern “free trade” which seems to require truckloads of regulations pondered over by legions of bureaucrats.”

  2. Hey Kevin, you could not be more correct. There is no need for regulation of free trade. We need a similiar movement to the anti-corn law league if we are serious about ushering in an era of prosperity for mankind(which of course we are not).

  3. I don’t think anyone seriously thinks NAFTA is free trade. The relevant question is whether or not it represents more liberal trade than the prior status quo.

  4. Yeah, let me throw in that despite all the problems I have with these byzantine “free” trade agreements, I’ve come to think that they solve a political problem in the face of which I think we’d have significantly less-free trade. Any one country, at any one time, might get a free-trading leader or legislature in office willing to open things up. But there’s constant pressure in the other direction, so absent some kind of mechanism to prevent the reimposition of tariffs, you’re often going to get stuck with a one-step-forward, two-steps-back pattern. International treaties provide a certain measure of lock-in. Now, one problem with these big group treaties, as opposed to bilateral ones, is that you usually need a lot more hedges and caveats to get all the players on board, so there’s a tradeoff. But given that political reality, they may represent the best achievable alternative in the short term. We’re used to talking about a bad kind of “ratchet effect” whereby government power grows & grows, especially during emergencies. These, I think, may provide a more positive kind of ratchet effect in the direction of ever-freer trade via alternations of bilateral and multilateral agreements.

  5. Having someone to point to and say “They made me do it” is absolutely necessary for politicians who want to drop tariffs and subsidies. The tiny group that benefits from these barriers is always louder and better organized than the huge swaths of society who are being unwittingly fleeced by them.

    What are you gonna do?

  6. I suppose the most miserable part of the entire discussion is that the two loudest factions are the “Do it because it’s free trade” and the “Don’t do it without regulating it even more” crowds.

    I would love to hear some critiques of these treaties that don’t begin with the premise “What’s good for corporations is bad for everyone else” or “We need to impose our crippling organized labor systems on the nations with whom we trade more freely.”

    The center of the political spectrum in this debate is grotesquely far to the left, and rational critiques too few and far between.

  7. Franklin Harris says, “I don’t think anyone seriously thinks NAFTA is free trade. The relevant question is whether or not it represents more liberal trade than the prior status quo.”

    The US Constitution created free trade with just a few sentences. That’s enough “free trade law” for me. People who support NAFTA-style free trade defend the several thousand pages of regulation as Mr. Harris did, by saying that the result is “freer trade” than would otherwise be the case. Perhaps this is true, and apparently the US Libertarian party grudgingly supported NAFTA on that basis. But I couldn’t just hold my nose and support this Frankenlaw monster on their endorsement, because while it may have “freed” some aspects of some trade, it did so by creating an unnecessary and counterproductive structure of law and bureaucracy that was almost certain to cause regret in the future.

    You might as well say that hiding food in a labyrinth filled with secret traps and hazards is a better deal for the starving poor than no charity at all. The maze, the traps and the hazards will cause their own problems, and the whole arrangement would arguably be too cruel to be considered charity, especially as compared with a more straightforward soup line. Similarly, the NAFTA arrangement is far too complicated to be considered a legitimate public “good,” especially as compared with the true free trade that the US Constitution established among the several States.

  8. I hate to write it, but reducing trade barriers is a political process, not least because erecting them is, or has been, a political process. It certainly invites special deals and exemptions.

    The industrial counterrevolution was not built in a day; it won’t be repealed in a day.

  9. What do you mean by ‘industrial counterrevolution?’

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