Tuesday, February 23, 2010

Quote of the day: James Bovard on free trade vs. free trade agreements

One would presume that an honest trade agreement would simply require little more than a handshake between the political leaders of the nations involved. If trade is free, then what is there to quibble about? But that would defeat the entire purpose of using free trade agreements to give preferences to favored nations and favored industries.

Free trade is not complex; it does not require an army of hair-splitting bureaucrats to achieve. Free trade agreements, on the other hand, usually outweigh the Bible and have more trick clauses than a Hollywood movie deal. (The U.S.-Australia FTA is nine hundred pages of wheedling, hemming, and hawing.)

Free trade minimizes the power of rulers to decimate the purchasing power of citizens. Free trade agreements allow politicians and bureaucrats to pick winners and losers with arcane formulas that guarantee that trade lawyers will never go hungry.

Free trade allows consumers and businesses to benefit from the best goods the world can produce at the lowest prices. Free trade agreements with a single nation divert trade. They give favored treatment to the producers whose governments sign deals with Washington and put the producers of all other nations at a disadvantage.

FTAs allow political clout to trump economic comparative advantage. FTAs seek to shift trade in whatever direction is most profitable to the politicians making the deals, rather than let trade flow from the decisions of producers and consumers.

Free trade agreements make borders more imposing and onerous for every nation except the one that politicians favor. Free trade aims to make national borders invisible for commerce.

The notion of "free trade"—but only with nationalities that American politicians bless—is a charade. This is like proclaiming freedom of the press, and then adding that people can buy books only from publishers specifically approved by the U.S. Congress.
— James Bovard, The Bush Betrayal, pp. 57-8

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