> Free trade is all well and good when both partners are trading freely, but China is not doing that.
There's no need for the other partner to trade freely to make free trade from your side advantageous to you. Have you heard of the theory of comparative advantage (http://en.wikipedia.org/wiki/Comparative_advantage) that explains why this works?
"The fundamental logic of free trade can be stated a number of different ways, but one particularly useful version - the one that James Mill stated even before Ricardo - is to say that international trade is really just a production technique, a way to produce importables indirectly by first producing exportables, then exchanging them. There will be gains to be had from this technique as long as world relative prices differ from domestic opportunity costs - regardless of the source of that difference. That is, it does not matter from the point of view of the national gains from trade whether other countries have different relative prices because they have different resources, different technologies, different tastes, different labor laws, or different environmental standards. All that matters is that they be different - then we can gain from trading with them." (http://web.mit.edu/krugman/www/negot.html)
That's a reasonable argument, and I'll have to read up more on it. What I posted above was via by economics classes from some time ago, so it may be time to actually take a look at the data.
By no means am I for trade restrictions - I was just commenting on the fact that the answer (like most of any complex issues) is "it depends".
1) My interest, and I think the interest of most people here is to understand the economic and political consequences of the TPP, not to obscure them with legal sophistry.
2) Delong's point is that the members are binding themselves to an international framework that will be difficult or impossible to back out of. He connects this with the problems of the EU. This is absolutely about sovereignty.
3) Unfortunately the main article appears to be a Monk debate which isn't available online.
4) Delong is a voracious advocate of free trade and also a political ally of the president who's trying to ram this one through. The fact that he's increasingly become hostile to this particular agreement is an indictment of the agreement, not of him as a critic.
Every country involved has industries which won't allow this. For example, all the countries in the G8 have agricultural sectors which will not allow elimination of trade barriers.
So, even if you want "free trade," you start with each country's list of stuff where there is not going to be free trade, and move forward from there.
> The US should only engage with foreign governments that respect free trade.
It may be a bit naive on my part, but in theory restricting free trade on this basis just makes us poorer. As long as two parties are trading, they both get benefits.
> Romania has basically no competitive advantage in the EU, except a cheaper workforce.
Part of that advantage is that Romanian labor laws are less restrictive (the minimum wage is a third of the french one, for instance). So France had a choice between repelling labor laws to keep worker competitive, tell all french truckers they could kiss their job goodbye, or introducing some protectionism.
I'm usually in favor of free trade, even when it costs jobs, but in that case I think free trade would be a direct race to the bottom. Jobs performed in a country should respect that country's labor laws, otherwise companies will just shop around for the country with the least restrictive labor laws without even having to move their operation. Unrestricted european trucking went against that.
Global trade has benefits beyond cheap labor. Resource distribution between nations is not even. Because of that, I'd stop all or most trade with countries who don't have labor and environmental protection laws similar to our own, but still allow trade with countries with similar economies. That would allow the resource flow needed to give a balanced economy, but still bring manufacturing back. Over time, demand for lower class labor would raise, leading to higher wages and quality of life for most people.
That's the hope anyway. If you see any blaring flaws beyond the fact that multinational corporations would suffer, please let me know.
Either allow labor to always move as freely (or a un-freely) as capital & profit, or move back towards less international trade, certainly between countries with highly disparate income levels and legal systems.
> How do you propose to mediate trade disputes between companies and states without something like the ISDS?
The companies could try accepting the laws of the country they wish to trade in, rather than shopping around for dodgy countries and then trying to export country B's laws to override country A?
I would add e) - if the whole western economy depends on a single country as a supplier, and this country wants to become the world leader, then it is in the interest of the said country to make as much economic problems for west as possible, but not so much that the countries would again develop local supply or import from elsewhere. Excuses a), b), c) and d) are very handy for this and allow the said country to walk the fine line. It helps if the country is tightly run. Genius and scary to watch.
>The flip side is that it is not great that this results in influential industry groups having way too much power. Not sure how to resolve this.
Don't make multinational all-encompasing trade deals. If you want freer trade, the best way to do it is to make small agreements on a country-by-country basis to tear down some protectionist policies each party has against the other.
This allows you to pick and choose the deals the population wants.
That's impossible IMO.
A) Labor laws reflect local requirements, e.g. the agricultural / fisheries sector won't benefit from rigid work hours.
B) Labor is affected by more than laws, e.g. a weak currency affect the affordability of imports more than minimum wage.
C) Transshipment, e.g. Singapore / Vietnam makes skirting trade restrictions trivial.
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