Archive for the ‘Trade’ category

The Roots of Anti-Free Trade

11-07-07

The National Association of Manufacturers blogger Carter Wood thinks he knows why free trade has become a dirty word in the political world:

The rise of anti-trade sentiment is a complex one, but certainly electoral politics play a key role. Organized labor’s place in the economy has slipped dramatically as membership numbers fall (7.4 percent of private sector workforce is unionized) and global competition and technology place a premium on flexibility and adaptability — not labor’s strengths. But labor still wields tremendous political influence through organization and its millions of dollars in campaign spending. With many Democrats frustrated at being out of power in Congress for a decade, the organizational and financial support of labor (as well as anti-war “netroots” and leftwing activists) became irresistible. And labor has just a few demands.

How are cool economic arguments about the benefits of trade, no matter how persuasive AND empirical, supposed to overcome that bald political self-interest?

Chicken/egg, we know. Which came first, the unpopularity of trade or the rising political influence of anti-trade forces? After reading economist Bryan Caplan’s “Myth of the Rational Voter: Why Democracies Choose Bad Policies” we’re inclined to think the former — that with an anti-market, anti-foreign bias, voters tend to oppose trade. It takes hard work by advocates and political leaders to overcome that bias, to win the arguments on behalf of prosperity and trade. And when the leaders bail out because of electoral self-interest, the work becomes even harder.

So: A mix of deeply-rooted nativism with interest-group politics. Although, as he implies, organized labor’s opposition to free trade might, itself, be rooted in nativism and not a sharp-pencil calculation of labor’s self-interest.

Who was the last political leader successfully to “overcome that bias, to win the arguments on behalf of prosperity and trade?” Click the video below for a brief journey in the Wayback Machine:

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Biofuel Displacing Food in Starving Nations

11-07-07

The biofuel kick, prompted by concern for global warming, is driving up the cost of food in developing nations to the point where the trade has become “a crime against humanity,” according to a UN official quoted in this story from the UK Guardian. Writer George Monbiot begins with a painful allusion to Jonathan Swift:

It doesn’t get madder than this. Swaziland is in the grip of a famine and receiving emergency food aid. Forty per cent of its people are facing acute food shortages. So what has the government decided to export? Biofuel made from one of its staple crops, cassava. The government has allocated several thousand hectares of farmland to ethanol production in the district of Lavumisa, which happens to be the place worst hit by drought. It would surely be quicker and more humane to refine the Swazi people and put them in our tanks. Doubtless a team of development consultants is already doing the sums.

The story goes on to explain how biofuel offers countries that have publicly committed to reducing carbon emissions “a means of avoiding hard political choices.” (more…)

The Circle of Life On Dolan Media

10-29-07

If it helps the state of Louisiana to give a tax break for shopping, for movie tickets, and for theatrical productions, our blogger in New Orleans, Deon Roberts wants to know why not give a tax break to the real drivers of the Crescent City’s post-Katrina recovery — the people who decided to come back and have kids. Like, say, Deon Roberts, a new daddy:

According to an Oct. 17 report by the Greater New Orleans Community Data Center, the population of the six-parish metro area is at 86 percent of the pre-K figure. The population as of September is 450,830 compared with 524,317 in July 2005.

Without people, there is no economy: There is nobody to make goods and nobody to sell goods. That is Economics 101.

Having children is not cheap, especially in the New Orleans area, where many parents send their children to costly private schools to avoid the public school system. So a tax break for us new parents would be helpful.

Perhaps the state could grant the break on our income tax returns. Perhaps new parents could be allowed to pay half what they would normally pay in state income taxes for, say, five years. Or maybe parishes could freeze property tax assessments for new parents until their children turn 18. There could be a requirement that families who use the break must stay in the state for a certain number of years.

Deon might seem like an interested party, but he’s not driving a very hard bargain. He says he’s in Louisiana to stay, regardless….

Long Island is another place that’s trying to hang onto its up-and-comers…. Housing prices are the culprit in LI losing “the war for talent….”

DC Dicta’s Kimberly Atkins reports that two young attorneys — both tabbed last month by Lawyers USA as Up & Coming Lawyers — faced off before the U.S. Supreme Court today, one of them wearing coattails in a nod to tradition….

Atkins also notes the passing of the much-admired law prof Dr. Clark Byse, the model for Professor Kingsfield in Scott Turow’s “The Paper Chase.” Byse taught at Harvard, Columbia and Boston U., where Atkins was one of his students….

Meanwhile, the New Orleans World Trade Center plays host this week to a delegation from South Africa, looking to establish trade ties and “a steppingstone to conduct business in Africa.” Actor Louis Gossett, Jr. is one of the panelists….

In Idaho, worries that anti-immigration politics will hurt small business….

In Minnesota, even the undead are entitled to justice….

Martin Frankel, the man who conned $200 million from seven life insurance agencies, used some of that money for jewelry. The insurance commissioners of Mississippi, Arkansas, Oklahoma and Tennessee tried selling some of his swag on eBay…a diamond necklace, some diamond earrings, a sapphire-and-diamond ring and a diamond-encrusted Cartier watch….

Only the Cartier watch sold, for $3,000…. It had been appraised at $4,000….

Europe Bullies Africa

10-17-07

Can you imagine the outcry if this was how the U.S. negotiated its trade deals?

By the end of this year, 76 of the world’s poorest countries – across Africa, the Caribbean and the Pacific – are supposed to sign free trade deals called Economic Partnership Agreements (EPAs) with the EU.

They are being asked to get rid of up to 80% of their tariffs against imports from the (European Union) over the course of as little as 10 years. If they don’t agree to sign up by December 31, then they may face the threat of higher tariffs on their exports to the EU – which is something they could simply not afford. However, with just 12 weeks left, the talks are still stalled in many areas. A serious crunch is looming.

In short, the lives and livelihoods of three-quarters of a billion people are at stake. But far too few people have even heard about Economic Partnership Agreements. For some reason, it’s just not a news story. But we have to make it one – and soon.

The European Commission still insists that everything is just fine. It sticks to its line that none of the countries has lodged an official complaint nor asked formally for alternatives to EPAs.

But as the deadline looms, there are signs that all is not well. A report earlier this year from the United Nations Economic Commission for Africa was clear that there has been too much focus on a rigid timetable for liberalisation and too little on the needs of developing countries.

While the EU is right to emphasise the importance of integrating African countries in the global economy, EPAs in their current form are the wrong way to achieve this.

Some countries complain that they are being put under pressure to negotiate on the commission’s terms and they are particularly concerned that the commission has failed to give time for proper impact assessments, and has dismissed their concerns.

The author of this column, Fiona Hall, is a Liberal Democrat member of the European Parliament from England. Hall goes on to argue that the EU should take the threat of higher tariffs off the table.

Hall writes the forward to a more detailed paper about the Economic Partnership Agreements here. The paper was commissioned by Open Europe, a business-affiliated think tank that

…believes that the EU must now embrace radical reform based on economic liberalisation, a looser and more flexible structure, and greater transparency and accountability….

The proposed agreements with African, Caribbean and Pacific countries are meant to replace agreements the WTO ruled illegal in 1996. A waiver was granted, but it expires at the end of this year.