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Prognosis for free trade

Not good. Michael Barone explains:

Almost all incumbent House Democrats voted against a free-trade measure as innocuous as the Central American Free Trade Agreement. Protectionism has become a partisan issue, with virtually all Democrats for and most Republicans against. So you can score a Democratic victory, like this year’s, as a victory for protectionism. It will certainly have consequences. Trade promotion authority lapses on June 30 next year, and the chances that the Democratic Congress will renew it are close to zero. The Doha round of world trade talks is currently stalled and unlikely to be renewed in time for an agreement to be sent to Congress. In any case, the fact that the Agriculture committees will be chaired by Tom Harkin from corn-growing Iowa and Collin Peterson from the wheat-growing Minnesota Seventh District means that the 2007 farm bill will not meet the standards of any Doha agreement that could conceivably be reached. The lapsing of trade promotion authority will doom the regional and two-country trade agreements that special trade representatives Robert Zoellick, Rob Portman, and Susan Schwab have been negotiating. We won’t be moving toward more protectionism, probably. But we’re going to miss many chances to advance free trade.

32 comments to Prognosis for free trade

  • Paul Marks

    It is an odd change that I have watched over the years.

    Many leading Democrats have been anti free enterprise since at least the New Deal (some would say right back at the time of the terrible Convention of 1896), but free trade was the last fig leaf of pro liberty thought they held to.

    In recent years that has gone to.

    Many of the “college boy” type Democrats (the “intellectual elite”) have become opposed to free trade (as have so many people in academia) and college types did not use to be.

    I should not have been surprised at this development (after all anyone who can believe that high income and capital gains tax rates are not bad for the economy, and that even more entitlement programs are a good thing, can believe anything) but I must confess that I was surprised a few years ago – I really did not see it comming.

    Nor are the so called “blue dog” Democrats any better on this. Most of them are Populist types.

    James Webb is a good example, lots of battle scars and a good fighter (and I did enjoy his book “Born Fighting” in spite of some of it being an anti English rant), but a big empty hole when it comes to Political Economy.

    The government has “failed to protect our working people” according to his radio ads (as if he owned the “working people”, and as if trade taxes really “protected” them against goods from other countries).

    I still prefer the exmilitary Democrats to the academic elite type Democrats (well I would prefer anyone to the academic elite types), but neither group is any good when it comes to matters of policy.

    But of course, by the failure to win the war and by the Pork and their failure to anything about the entitlement programs and all the rest, the Republicans gave the Democrats the key to the door.

    One can denounce the “bias of the mainstream media” (and so on) with some truth – but it was the Republicans themselves who lost the election (and, in truth, they deserved to lose).

  • Rothbardite idiot

    But they’re all the same. Repugs are just as bad, in fact they’re worse. Warmongers, bushitler Zionist Occupied Government!!!!!

  • Millie Woods

    The problem is that young people in business programs at university are brainwashed into believing that if an individual (or nation) has something of value, they took it from someone else.
    They believe in the piece of pie metaphor i.e. that the world’s resources both material and intellectual are finite and they also accept the winners and losers paradigm – or to be more specific if someone is a winner than it’s because somewhere there has to be a loser.
    I would try to tell them that if that model of life on earth were accurate civilization would have come to a grinding halt in pre-Stone Age times.
    Who was the loser I would ask when Louis Pasteur proposed his theories on public health. Who was the loser when Berners-Lee developed the world wide web.
    They tend to view the world of commerce as big business Fortune 500 type enterprises grinding down and exploiting employees and fail to understand that most people are employed by much smaller entities. They also fail to acknowledge that almost all of our daily transactions are pleasant and mutually satisfactory.
    The world is full of injustice and it is all the fault of those of us with white skin who were brought up in a Judeo-Christian moral world. It’s difficult to disabuse these terribly misled young people of their idiotic world view.

  • veryretired

    Free trade is a myth. None of our trading partners even remotely approaches any semblence of it, and neither do we in many major areas.

    What free trade has become, and much of what the dems object to, is unfettered access to US markets without any reciprocal agreements and access to other nations’ markets for US companies.

    The Japanese auto market is the perfect example. If we put the kind of obstacles and monetary disincentives on Japanese cars coming into the US that the Japanese put on our vehicles trying to enter their market, the pissing and moaning would reverberate around the world.

    Most of our other trading partners have similar strategies—gain access without giving any up in return.

    I dislike tariffs and the damage they do to economic prosperity, but let’s not pretend the threat to free trade comes from the US, regardless of which party is in power. Talk to me about it after the EU, Japan, China, India, and the umpteen others we trade with do some opening up of their own economies.

  • Jacob

    “Talk to me about it after the EU, Japan, China, India, and the umpteen others we trade with do some opening up of their own economies. ”

    This widely held belief is dead wrong. The US, the US consumer, benefits from absence of tariffs enjoying low prices. This does not depend on “them” opening up their markets too. Imposing tariffs is like shooting yourself in the foot. You don’t shoot yourself in the foot just because the others do it too.

  • Perry E. Metzger

    “Verytired” trots out one of the worlds oldest and silliest anti-free trade myths — the notion that if you open up your markets but the other guy doesn’t open his, somehow you are worse off.

    Actually, any reasonable mathematical model you make shows you are better off, any reasonable computer simulation you do shows you are better off, simple reasoning lets you see you are better off, and literally centuries of examples in the real world (ever hear of “Hong Kong”?) show you are always better off opening up regardless of what the other guy does.

    I have very little sympathy for people who are ignorant of the evidence on all of this and yet have opinions on the subject. No, you are not entitled to have an opinion without understanding the topic. Go to the library, read enough economics texts that you can discuss the topic intelligently, and then come back.

  • RAB

    Ok Perry count the beans for us son
    I only have the A level in Economics
    So talk slow.
    We have all heard of Hong Kong, we have also heard of the Opium Wars.
    That was a free trade disagreement that didn’t go quite to plan, eh? Did we profit from that one?

  • veryretired

    Seeing as how I am not anti-free trade, and state very clearly that I am not, perhaps the autocrat of all proper libertarians could learn how to read before he sticks his keyboard in his mouth accusing me advocating a position I have never advocated.

    Aside from the gratuitous insults, it would advance the discussion of the topic—will the US become less free trade under a dem regime?—if certain people who not only know everything but constantly go around telling others what they must think would get their heads out of their butts and read what’s actually been said.

    By the way, oh, Metzger, czar of all the good little proper libertarians, I’m still waiting for the answer to the question I asked you months and months ago, to wit: Exactly when should the US have become Switzerland, and describe in detail the course of history from that point on that would prove it was a wise course.

    Don’t forget to mention the nazis, bolsheviks, and assorted other militarists and maoists who would, obviously, respect our neutrality and only decimate the rest of humanity.

    Now you go, dude.

    I can hardly wait to hear this fairy tale.

  • K

    I agree that we can benefit from free trade even if others do not open their markets.

    But I can’t be sorry if we stop entering into agreements which allow international agencies to decide if we have violated a trade treaty and levy penalties.

    To my mind we should not make treaties that do not clearly state the parties can quit absolutely and will be the judge of their own compliance.

    And, of course, other nations are better off to avoid the same. But that is their concern, not ours.

  • Good thoughts here as to why people don’t understand the non-zero sum nature of economics


  • Philanthropic Patriot

    If it is ‘free trade’ why do we need agreements between governments? All we need for free trade is for companies in one country to have access to companies in another country.

    I was recently denied access to Canada under NAFTA when going up to install and train a company on a peice of software our company sells because, as a computer engineer, I am required to have a bachelors degree to qualify for my job.

    So what kind of free trade are we getting from NAFTA? These agreements aren’t about free trade, they’re about controlled trade and protectionism. Laws don’t promote ‘free trade’ and are unnecessary at best and harmful at worst.

  • Brendan Halfweeg

    Free trade is a myth. None of our trading partners even remotely approaches any semblence of it, and neither do we in many major areas.

    So what. Trade of any kind is not zero sum.

    What gets my goat is this fair trade rubbish that gets spouted by greenies and other lefty type bleeding hearts. The only redeeming feature of the fair-trade movement is that it is non-government, so they are only shooting themselves (and ultimately the farmers who are attracted to thte higher than market prices they offer) in the foot.

    How exactly do these fair traders work out who is worthy of a fair trade, the farmer working land best suited to production of that product, or the farmer who converts his less than ideal property to producing the commodity because he has been attracted by the higher prices? What happens to the surplus that inevitably results? What happens when market forces react to the surplus and prices of non-fair-trade products crash because of over-supply, which disproportionately hurts all farmers of the commodity, but actually is good for consumers. It is ironic that the most likely beneficiary of fair trade will be consumers (like me) who reject the concept and benefit from the lower free trade prices of products whose production has been warped by fair trade intervention.

    Foreign state market subsidy intervention is the same, only the foreign citizens don’t get to do it voluntarily.

  • James of England

    Philanthropic Patriot, I’m intrigued by your description of the NAFTA as banning you from Canadian soil. I can imagine that the NAFTA’s visas are not sufficiently more flexible than the other varieties available to have gotten you in (although I’m surprised that there was no channel available to you). I cannot think of how the treaty could have been an active hinderance. If it was actively bad, rather than simply not going far enough, do you think you could cite me a clause and offer a little more detail? My LLM is heavily focused on Free Trade Agreements and if I can’t use your story, I’m sure one of my professors could? You can find a copy of the text of the treaty

  • James of England

    Veryretired: Most of the changes that will come before Congress are bilateral changes. We just saw the humiliating defeat of trade normalisation with Vietnam, but that’ll have another try soon, probably with more larding to cheer up textiles manufacturers. There are FTAs with Colombia, Peru, Panama, Malaysia, the United Arab Emirates, and Thailand that are either signed or very close to completion. There are a host of others that could easily make it into the next two years, most notably Korea, the six countries of the South African Customs Union, the Phillipines, and Ecuador. There are also other kinds of measures that improve trade from inside the USTR (TIFAs and BITs) and outside (Open Skies et. al.). The expansion of these programs has been, to my mind, the greatest achievement of the current administration.

    I agree with the various commenters that said that unilateral liberalisation is good, but I also agree with you that bilateral liberalisation is better: multilateral liberalisation only happens when bilateral liberalisation bullies the protectionists into avoiding their use of the veto.

  • veryretired

    Thank you James, at least one person bothered to read what I actually wrote.

    Exactly. I was merely pointing out that free trade should be a two way street, and all too often it is not.

  • James of England

    Veryretired: I think I missed a part of the point in my reply. Just to be clear: The problem is not that the US may become the enemy of trade. The problem is that it will cease to be trade’s biggest defender. Well, no, the problem is that it will cease to be trade’s biggest defender by such a large margin. There are no parties in the US that are nominally against econic growth (even the Greens are quite a sensible party by global standards).

  • James of England

    Philanthropic Patriot: The reason we need agreements between governments to have free trade is because without such agreements governments put barriers up against trade. Obviously, as many commenters have noticed, it is absurd that countries everywhere do not follow these incentives: there’s a lot to be said for public choice economics when it comes to understanding this collective lunacy.

    As you say, all we need for free trade is for companies to have access to other companies. What free trade agreements do is allow companies access to other companies, without many of the barriers which states put up to restrict this: tariffs, absurd regulations that benefit domestic companies, risk of nationalisation and expropriation of foreign companies, and so on. Also some government procurement issues that fall within your analogy if you consider governments to be companies for commercial purposes (in the same way as I assume that you would include natural persons in your definition). Does that make sense?

  • James of England

    K: I am curious about how you believe investor-state disputes (or state-state disputes) should be resolved. We do currently have a large number of trade treaties that are basically aspirational. In the US, these are called TIFAs (trade and investment framework agreements). As you can imagine, their impact is not as great as the treaties that are more than aspirational.

    Do you have this belief in other areas? Do you believe that the goals of the US constitution are great, but that they shouldn’t strike down laws that controvene them? Do you believe that if the Constitution were merely aspirational, like the UK’s Bill of Rights in practice(right to bear arms…), that the US government would be as respectful of the need for evidence before searching people?

    Have you read MetalClad, or any of the other three Investor-State arbitrations ever successfully instigated under a US free trade agreement? I find it very hard to believe that anyone could call himself a libertarian and support the right of the state to arbitrarily expropriate land without paying for it. I’d imagine that most of the readers here, if they read Loewen (the text of which is hilarious, btw, and well worth reading), they’d feel that the tribunals did not go far enough in ensuring that the state acted without malice.

    I understand why greens and socialists feel that states should be free to act to crush competition and keep out Johnny Foreigner, but I never understand why libertarians so often become fans of unbridled big government in this arena.

    ps. Veryretired: I did not mean to be ungrateful for your kind thanks. My comment about missing the point was typed before I went off for supper and was posted when I got back before I refreshed and saw your comment. Thank you.

  • K

    James of E: Your comments to me are puzzling. My view on disputes about what treaties mean and how they are honored is simple. Treaties should just say that the party governments intend to negotiate disputes in good faith.

    If no settlement is possible then the treaty can be ended. No big fuss, no invasions, and no mandatory arbitration by a third party.

    Treaties should have an expiration date. As the date approaches the treaty can be extended if that is acceptable to all parties.

    Your second paragraph is astonishing. Nothing I said bears upon the Constitution or whether judical review is a good idea. What did I say that advocated ignoring the fourth amendment? Nothing.

    Your third paragraph means what? I never mentioned government takings – you may refer to the recent Kelo decision. And why in the world do you think I call myself a libertarian?

    But you keep going – Greens and Socialists have their agenda. Which has nothing to do with my wishes. Roughly I sense that Socialists cannot not want the state to decide everything – Hayek was right – that is where it leads.

    Greens are more varied. I belong to a group that buys land and keeps it wild but refuses government funding and does not lobby. Others are more in the public arena, some I applaud, some I loathe.

    Whether or not many libertarians become fans of unbridled big government doesn’t matter to me – although it sure sounds odd. I am a fan of small government – which is why I prefer the government of my locality.

    Living in Arizona I do not wish that Virginia tax my income or run the local fire department. Nor do I wish to become subject to the whims of UN agencies or international forums.

    I sense no dearth of laws in my vicinity. And do not yearn for others-from- somewhere-out-there to run my life. So why do I want added layers of law or government?

    You miss the point if you think Metalclad pertains here. I don’t care if others felt arbitrations were swell or successful. Goody for them! It doesn’t follow that I must prefer what they prefer.

    To return to my first statement. Free trade can benefit a nation even if it is not reciprocated. That is not some eternal fixed truth that must happen. It works if frees resources for more productive uses.

  • Paul Marks

    I am not sure what RAB means by Hong Kong and the Opium Wars.

    On Hong Kong generally, both the Chinese and everyone else were better off because of the greater respect for private property and the lower level of regulations and arbitary power in Hong Kong under British rule than there had been under Manchu rule. Nor did the economy of Hong Kong stay drug based.

    As for opium, I do not see the Chinese Imperial opium monopoly (based as it was on THOUSANDS of executions of people in communities who had bought opium from other supplyers) as some sort of moral cause. “But Chinese people where not allowed to sell opium in London” – yes they were, in the Victorian period, and they did. The getting rid of the East India Company monopoly on opium sales to China happened before the war.

    The fact that Victorians did not share modern delusions about the right or ability of governments to end drug abuse (or in the Chinese Imperial case to keep the money from the sales in the hands of officials) is not a point against free trade. All the “war on drugs” achieves is to give employment to various government officials and to put vast sums of money into the hands of criminal gangs.

  • James of England

    K. What I understand you to be saying is that treaties should be aspirational, non-binding, the equivalent of press releases. There should be no trade treaties more useful than TIFAs. Worse than that, even, every time a serious trade dispute (like Softwood Lumber with Canada) came up, you’d lose the treaty or have it be meaningless. I’m not sure what you think “good faith negotiation” would have meant in that arena, but I can’t imagine it accomplishing anything.

    I’m not sure why you want an expiry date rather than the current system whereby states can decide affirmatively to leave but do not default to doing so. Making the Senate Advise and Consent To every treaty with every country on, say, a five yearly basis seems a little burdensome. Still, this suggestion for a constitutional amendment seems less objectionable than the other points.

    My analogy to the constitution was to remind you that sometimes governments wish to bind their own hands. The most famous and obvious example of this is the US constitution. These treaties are a mild way of entrenching decisions to avoid protectionist populism from acting too cheaply. Governments can still decide to be protectionist, but they’d have to leave the treaty. In other words, a government that has decided to slap new tariffs on Mexican goods as a gesture politics way of showing that it wants a secure border or disapproves of some decision or other of Calderon’s would have to leave the NAFTA.

    The takings reference is because that is the chief purpose of BITs and one of the chief purposes of FTAs. If you’re a foreigner from a treaty state and the government expropriates your stuff, it has to pay for it. Unsurprisingly, there has never been a decision against the US on these grounds, the most unpopular and controversial of the FTA provisions. The US already has a pretty good takings clause and a relatively respectable government, even at the state level. I’ll admit that I’d have liked to have seen Loewen go against the US, but that’s neither here nor there.

    If you’re not concerned about takings, ie, investor state dispute resolution, what aspect of FTAs concerns you? Generally it is this requirement that compensation be given when someone’s arbitrary legislation takes your stuff that bothers those hostile to binding arbitration.

    I don’t think you’re following. These “laws” do not tell you how to run your life. They impose no new burdens on citizens. They prevent states from imposing abitrary and discriminatory regulations that have the effect of expropriation without compensation. Even Kelo said that you had to compensate. Unless your job involves expropriating without compensating, I don’t see how these laws would affect you negatively. Seriously, read Metalclad. Try to decide if you want local governments to be able to act in this kind of openly abusive manner. I’m not saying that you must prefer what others prefer. I’m asking you to read the case, make up your own mind what you prefer, and say if what you would prefer was for the taking to be uncompensated.

    Why do you think that states want to sign up to BITs, which do not offer tariff benefits or suchlike, and just bind the states to investor-state dispute? Do you imagine it is because the 41st state to sign up to one believes that it will be the first to see the US successfully claimed against? Or do you think that it is because by lightly binding their own hands they believe that they can inspire foreigners to trust them and invest in their economy. Why would you deny them that ability? Who benefits from bad third world governance?

  • RAB

    To be perfectly honest Paul
    neither do I.
    I was just so annoyed at Prof Metzger, I desided to get cryptic again.
    I was taught the socialist version of the Opium wars, down in the land of my fathers, in the 60’s.
    Ergo it was a very bad thing! Interfered with China’s soverignty, Imperial arrogance, an enforced free trade rather than free free trade.
    But we skipped through the Opium wars in an afternoon.
    So now you tell me the whole story . Thanks.
    I can posit a situation or two when a country can be damaged by indulging in free trade when all about them are not, look you! but I am not a bean counter. I live in the real world of imperfect , not perfect competition.

  • Fraser

    On a related note (kinda), Milton Friedman has died.

  • K

    James of E:

    I don’t know if you are being purposely dense or not. I haven’t said a tenth of what you assert.

    To review. I think treaties should run for a stated period then be renewed or expire. A decade seems about right. They should also provide that they can be cancelled at will. That does not mean cancel them for a petty reason. I don’t recommend petty behavior to governments or people. It does not mean we would not abide by the terms while it runs. It does mean one can give notice that the treaty is ended.

    What part of ‘good faith’ doesn’t work? It means a government considers the terms of the treaty and acts to abide by it and settle disputes by negotiation.

    Cancellation should be rare. I do fail to see why a government would let others decide their fate (binding arbitration, international courts, etc.)

    Those Senators and diplomats who cannot bear the immense burden of inspecting treaties and deciding if they merit renewal are free to seek employment elsewhere. The matter of renewal does not require an amendment as long as the terms are stated in the treaty.

    You write of land/property seizure several times. If the Italian Government takes my vinyard what makes you think I will get a better deal from a third party arbitrator than from the the Italians? No one is going to punish the Italians for ignoring the arbitrator. US diplomats might send a note to Roma. The UN might put a citation in one of their thousands of 8000 page plans for a perfect world.

    You see, I don’t think my government cares what happens to a US citizen. Nor do other governments. They will use what happens to individuals to further their agenda, not to help the person.

    Treaties fall into two broad catagories. The first is for ongoing management. These include tariffs, defense alliances, etc. These should be reviewed and subject to cessation.

    The other catagory is settlement. Boundary disputes and such. Germany paid France for property stolen during WW2. The matter best ends with the payment. It is madness to suggest that Germany can demand the money back in ten years. Or to tell Germany that their1955 payment in Francs didn’t count since money now means Euros not Francs. Treaties to end wars or conflicts usually state the settlement is final. And I agree with that.

    Notice that ‘final’ itself is sometimes defined. One way is to meet the terms once and for all. The other is by the passage of time – at a certain date the matter ends. Dating is more effective – almost all peoples will agree on what a date is. But what the terms meant and if they were met is opinion.

    An interesting set of treaties handled the American purchase of Louisiana. The treaties contained provisions for post-signature French/American cooperation about the turnover, rights of residents, validity of local court actions, civil government, etc. In other words it was a treaty with a mixture of continuation and of settlement. But the continuation portions were for a given time, not perpetual.

    An example of the mischief of terms soon followed. In the treaty that ended the Mexican-American War. A poorly written passage stated how the US was to treat the Mexicans in our new territory. And since that provision had no termination date the Mexican government insists it has standing in the matter over 150 years later. And their view contains some logic.

    Settlements often have unexpected consequences. American civilians and POWs have tried to get Japan to pay them damages for WW2 forced labor, etc. They have not gotten them. Nor will they. The peace treaty settled claims and ended the matter at signature.

    Perhaps this will clarify my position. Government is force. It is an entity that reserves the right to decide all ownership and what is criiminal. Disagree and it hurts you.

    We think of a government as having a domain or territory but that is secondary to the principle that government uses force as it dares to rule all it can.

    The US government did not wish to limit their own powers. It was the men who drafted the Constitution who wished to limit government powers. Adams and Jefferson and maybe Franklin did not think it could last. They thought it better to try. I think it better to try. I think it insane to expect success.

    One government or another covers the entire earth. Even Antartica which has no formal government is not ungoverned. If you doubt, try moving there.

    Since government cannot be escaped it must be endured. I endure mine. I will never like it because it avows some ‘right’ to destroy me at will. They may say it is after my criminal action and with due process. But they define criminal action and due process.

    Whatever the fine words from lawyers and judges the courts are a branch of government. The statutes and the Bill Of Rights are paper.

    So I have a government – several levels in fact – here in Arizona. If the level which calls itself ‘federal’ decides the UN, or a Brazilian court, or the WTO, or a NAFTA board is also to rule me then it will be. I hope they don’t, that is all.

  • James of England

    OK. To my mind, possibly overinfluence by employment law “At will” means “permissible for reasons no matter how petty”. If you don’t mean that, I don’t know what you mean. Still, I’ve said that I’m not particularly concerned with the idea of treaties being cancelled.

    The “good faith” doesn’t work if there’s nobody to judge compliance with the standard. Both Canada and the US would have argued, and did argue, that their interpretation of the Byrd amendment was in good faith, although the some on the US side clearly didn’t believe it.

    If you don’t believe that treaties can cause misbehaving governments to award compensation then I, again, suggest you read up on MetalClad, or on the other three cases where the NAFTA did precisely that. Alternatively, read Professor Bjorkland’s great summary in Waiver and the Exhaustion of Local Remedies Rule in NAFTA Jurisprudence.

    Again, you suggest that governments aren’t interested in binding their hands. I’m not sure why you think that they sign treaties that do precisely this (and it is worth noting that almost all treaties bind the parties signing them, at least until withdrawal, which can take a while). Lots of governments are willing to make, and have made, significant political sacrifices to get FTAs, or even BITs. There have been, as I’m sure you’re aware, constitutional amendments since the bill of rights. The 24th amendment, for instance, prohibited the attachment of voting rights to poll taxes. State governments limit their own power all the time; most elections see at least one or two amendments pass in some place or other. Still, as noted above, FTAs don’t inhibit US actions much, except in the most flagrant of absurd breaches of common decency (like the Byrd Amendment). You talk about “enduring” government, but I’d have thought that this would be easier if the burden of government was less. I’m not sure, then, why you’d be against bodies that exist solely to prevent government action.

  • K

    James: First, I knew what ‘at will’ meant. And that is exactly what I advocate.

    Having the freedom to act at will is quite different from acting for petty reasons or being disagreeable and capricous. I don’t advocate such for people or government.

    You might stop the trick of saying you don’t know what I mean. But use it at will if it amuses you.

    Pretty clear why I’m against bodies that limit my government’s actions. These treaty bodies are created by governments – so, initially at least, they are what their creators want.* Government desires are not mine. All government is a limit on me and any new government body is an addition or a variation.

    These agreements don’t limit total government at all, that is the pretense. They merely adjust where decisions are made. And each layer of the abstraction makes it more difficult for the governed to protest or reverse.

    Meanwhile we feed employee huge numbers of attorneys and bureaucrats who bear no responsibilities for any outcome. Through astonishing wordplay this is said to a boone to the governed.

    “Good faith doesn’t work if there is nobody to judge compliance? ” That is total nonsense by definition.

    There is no good faith when compliance is judged, only a very logical belief that defying the judge is dangerous. You may believe a hearing or binding arbitration is fair, I believe it is just a facet of force. Obey or else!

    My national government in various guises is the body I must obey. Why want still more government – on some international plane – involved?

    If indeed you are in England then you have a stake in the EUs steady expansion of their power in both criminal and civil affairs.

    NAFTA is like the beginnings of the EU – a little here, a little there, always interpret what are not clear to favor bureaucracy, issue orders to signatories and see if they can be made to stick, insist on more independence so one can be even-handed, etc. ad infinitum.

    I understand the EU has now decided it can review criminal convictions and any legal ruling in any member state.

    I do not say NAFTA actions are worse than US actions. And I do not contend that the EU will be better or worse than UK government. The quality doesn’t concern me.

    Many believe law and government is , or at least can be made into, something good. I believe law is just a tool used by a gang. Gangs seem to be human nature. There is nearly always one gang of bullies or another dominant in a geographical area. Their intent is to be unchallenged and do as they wish, the methods vary.

    Since my desire is to live as I wish my person is a government, in theory. In practice a more powerful gang has the clout. And that won’t change.

    In America our Constitution is a clever opiate and pacifier used to control people by misleading them. Probably the cleverest ever devised.

  • Philanthropic Patriot


    I’ve been busy but I will be glad to give you a more thorough description of my attempted business trip to Canada some time this weekend.

  • James of England

    “They should also provide that they can be cancelled at will. That does not mean cancel them for a petty reason.”

    If you meant there to be a shift in scope between those two sentences, then I guess that’s fair enough.

    I’m sorry that it bothers you, but I think there is enough ambiguity in your suggestions that I’d like to tease it out. Do you mean “all trade treaties, for that matter, almost all treaties, should be aspirational, with no binding components, just a hollow demand that governments act in good faith that could not be arbitrated”? Alternatively, do you mean “all trade treaties should include no enforecement mechanisms or guidelines other than a demand for “good faith” that could be legally enforced by judicial review? If the US thinks that it could, in compliant good faith, maintain the Byrd Amendment, and Canada thinks it couldn’t, how would the question be resolved?

    You say that treaty making is government action and that government action inherently increases government. Do you feel the same way about tax cuts? About spending cuts? Do you believe that cuts in taxes and spending never happen? How about cuts in tariffs?

    NAFTA is what Thatcher wanted the Single Market to be. NAFTA doesn’t create anti-trust laws, or discrimination laws, or requirements for subsidies, or any other kind of law that binds citizens. All the guarantees are of negative freedoms. There are labor and environment chapters that would offer positive freedoms if they had any effect, but there has never been a single successful action under either of them, or under any other FTA.

    Seriously, if you have substance to your belief, quote it. I can’t cite to anything because I’m trying to prove a negative. You, on the other hand, appear to be asserting that there is some positive freedom (government action) that somehow impacts on you. I’ve given you the text of the treaty. I’ve given you the name of the leading Chapter 11 case. You should be able to google the rest if you don’t already have it. It might be that Chapter 19 or 20 disputes are what you’re talking about. I get the impression you think that the NAFTA does a lot more than it does.

    FWIW, I am currently spending some of the 90 days a year I get without tax in the UK, but I chose the name because I’m often the only English person present, which makes it a helpful nudge for people’s memories. I’ll definitely spend less of next year in London than in Georgetown (Grand Cayman), Davis (California), Bangalore, Orange County. I don’t spend a lot of time in Europe, in part because the EU makes me uncomfortable. Yes, I know that it’s going to be a big part of my work in Georgetown, but the rest of the work there seems too good to pass up. I’ve spent an awful lot of time comparing US international regulations and EU international regulations. Probably more than on any other legal or academic topic. My total lack of fear that the NAFTA is something like the EEC is not based on an ignorance of what the two organisations attempt or what they actually achieve. There are threats to the US from international law and international bodies, but they don’t come from FTAs.

    To summarize: How would you see compliance enforced, or do you think that we should trust governments to comply with aspirational desires on a bona fide basis?

    What clause, precisely, in the NAFTA, has reduced, by one jot or tittle, one American’s negative freedom? Cite to something specific please. And not Mr. Patriot (I’m very much looking forward to his story, but I’d appreciate it if your example could be a little less personal).

  • James of England

    I think perhaps if you could cite to someone else with similar thoughts on good faith and enforcement. It may be that there’s just a paradigm clash here, and your words get at a different concept to the one I’m hearing. Working in law attunes your ears to specific meanings. Good faith, in my head, (and on wiki is a legal standard. It is meaningless without an underlying legal system.

  • K

    James: We are simply looking at this differently. You apparently are in some aspect of Law and regard the law as a good tool for resolving disputes and handling the necessary relations of people and business and governments.

    I regard Law as just another aspect of government and government as just the dominant thugs of a given time and locale. So I think judges and courts only another affliction ala Idi Amin. (understand the new movie is rather good).

    When authority passes by treaty from the US government to another agency I don’t see why it can be good. It hires more bureaucrats, they think about rules, publish rules, try by every method to permanently direct others while being responsible to no one.

    In that view treaties and their variations are bad by definition If outcomes seem fair, or the proceedings reasonable, or those involved praise it to the sky, I still regard it as government.

    As said before. The gang which governs in the US is more than enough for me and when they spawn mini-gangs by treaty it is akin to hearing Satan has more Imps.

  • James of England

    Why do you keep referenceing the government as thugs concept? I don’t see how that impacts on this. The election was not a choice between no government and government. It was between different kinds of governments. You clearly believe that there are better and worse governments, since you believe that a government that does not sign treaties is better than one that does.

    It seems that you think that the FTAs increase the burden of government for two reasons (correct me if I’m missing one).

    1: FTAs are government action. Therefore they increase the burden of government. To believe this, you would have to believe that Thatcher’s spending cuts and privatisations were increases in the burden of government (if you are angry about Thatcher, perhaps the repeal of the corn laws is a better analogy). I don’t think that you really can believe that putting up tariffs and taking them down both increase government.

    2: You feel that the fact that the arbitration panels that enable FTA arbitrations contain foreigners is undesirable. You cite in favour of this the undesirability of having Virginians decide your levels of tax. I can somewhat see that point of view, since AZ doesn’t have too bad a state government (or at least my friends in Phoenix and Sierra Vista seem to like it). If I was in Rhode Island, though, I’d love to have Virginians deciding on my state laws.

    Do you feel that foreigners are less good at law making (less local knowledge, less heritage from the founding fathers, or some such), or that it is just more comfortable to be ruled by “your own kind”? It’s obviously not about voting, since there are no analogous elected positions I can think of. I think you might overestimate the numbers of arbitral panels about, and the amount of work that they do.

  • K

    Why do I refer to government as thugs? Because that is how I regard them.

    I don’t see foreigners as less able or less fair. I just don’t believe these agreements do anything I might like. They are quite liked by those employed in Law, diplomacy, trade negotiations, etc.

    Economists and intellectuals love them. For at heart they believe a Utopia would emerge if only their superior thoughts ruled man.

    It is the nature of government to create conditions favoring those in government while shunting any unpleasant consequences onto others.

    The reason I wouldn’t want Virginians making law in Arizona is simple. They have even less reason to come to agreeable decisions for this area than an Ariizonan government. While neither, being governments, wants anything except to remain in power and gain more, it is a longer drive to Virginia for jury duty.

    Myself? I have refused jury duty for twenty years – to hell with their schemes. Sometimes I am fined and sometimes lectured. It is best not to spit toward the judge and have the Marshall beat you.

    You say it is not a matter for government or no government but for better or worse. My decision is only mine, I either help them or I do not.

    As a young man I was an air force officer, college, accounting, switched to engineering. Property, travel, community service, the usual life. Then I considered what freedom might actually be and my thoughts changed.