This week on Facebook: Were I a conspiracy theorist I could be drawn to the notion that Free Trade agreements are a means of ensuring hegemony over a democratic electorate and expanding the global authority of totalitarian regimes. Increasingly these agreements intend to penalise nation states where productivity, or lack of it, are not subsidised by the visible hand of a state’s public administration.
My previous posts on robotics and AI implies that these developments were essentially driven by the economics of production costs, especially in industrialised developed and developing economies. There still remain those economies where the cost of human labour, especially of the kind that is usually illegal in a developed economy, can compete with the productivity introduced by the use of robotics and AI. This not only creates a social dilemma for politicians and producers, both parties to a free trade agreement share the social welfare difficulties created by such competitive productivity.
I first dealt with free trade on Facebook in my post Free Trade Isn’t ‘Free or Fair’! [5/11/2016] opining that it took the small state of Wallonia to draw the world’s attention to the iniquities of promoting economic integration through free trade agreements. It would seem that free trade is not free between nations seeking an expanding global commercial hegemony and global history is replete with examples that make it so.
Monday 13/3/2017 Why are my Highly Educated Friends so Ignorant about Trade? My friends didn’t vote for Donald Trump. Most are from “liberal” parts of the US. They went to good schools for 12 years, worked hard, got good grades. Many went on to top colleges and universities, places like Stanford, Yale, NYU, UCLA. And yet most of them know almost nothing about one of the most important issues facing the world today
Tuesday 14/3/2017 Trade deals are complicated because trade is complicated: As laudable as the idea of a US-Britain FTA may be, the new narrative is naïve at best. At worst, it could bring genuine trade liberalisation to a standstill. Trade agreements are not long and intricate primarily because trade negotiators are incompetent or captured by special interests; the true source of complexity is that modern economies are governed by complex rules. In other words, they’re complicated because regulation is complicated.
Wednesday 15/3/2017 TISA Ready to Take the Place of TPP: TPP was killed because Congress wasn’t going to go along with it and US President Donald Trump withdrew the country from the Trans-Pacific Partnership (TPP) as soon as he got into office. But now we’re finding out that it lives on through the Trade In Services Agreement (TISA). TISA has actually been around for a long time, some 21 rounds of negotiations since April 2013.
Thursday 16/3/2017 Is free trade good or bad? It is not about countries being able to produce more cheaply or efficiently than others. You can have a comparative advantage in making something even if you are less efficient than your trade partner. When a country shifts resources to produce more of one good there is what economists call an “opportunity cost” in terms of how much less of something else you can make. You have a comparative advantage in making a product if the cost in that sense is less than it is in another country.
Friday 17/3/2017 Henry George’s Protection or Free Trade: Except for the slightly dated writing style and examples from a century ago, Protection or Free Trade (pdf) could have been written yesterday. With the election of protectionist-leaning Donald Trump and some renewed hostility to free trade, it’s helpful to consider the book that the late Milton Friedman said was, “the most rhetorically brilliant work ever written on the subject.”
Free trade but at what price?(pdf) In the last decade, there has been an explosion of free trade agreements. While current WTO multilateral negotiations remain mired in disagreements between developed and developing countries, bilateral and regional free trade agreements, or FTAs, are being signed and implemented, and many more are either proposed or being negotiated by impatient nations — both developed and developing.
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