More Challenges to “More ‘Free Trade’ is Always Better” Orthodoxy

Written on July 22nd, 2014 in politics Comments Off

Published on naked capitalism, by Yves Smith, July 21, 2014.

One way to induce a Pavlovian reflex in mainstream economists is to invoke the expression “free trade”. Conventional wisdom holds that more trade is always better; only Luddites and protectionists are against it. That’s one big reason why the toxic Trans Pacific Partnership TPP and its evil twin, the Transatlantic Trade and Investment Partnership TTIP, have gotten virtually no critical scrutiny, save from more free-thinking economists like Dean Baker. They have been sold as “free trade” deals and no Serious Economist wants to besmirch his reputation by appearing to be opposed to more liberalized trade.  

“Free trade” boosterism runs two parallel arguments: the “’free trade’ increases wealth and therefore we should all go along” and and the “more open trade is inevitable, you better be on this bus or you will be under the bus.” Too often, these arguments rest on the assumption that coming close to the economists’ fantasy of frictionless ‘free trade’ is better. But that was debunked in 1953, in the Lipsey-Lancaster theorem, which demonstrated that trying to move to closer to an unattainable state was not only not assured to produce better outcomes, it could very well produce worse ones. You actually need to do the work of evaluating various “second best” alternatives, rather than assuming more is better. But even though economists know about Lipsey/Lancaster, they dismiss its inconvenient implications … //

… This is an important argument, which sadly is likely to get little traction: at this stage of economic development, trade deals are largely beside the point. And that reality is perversely acknowledged in the TTP and the TTIP. They are not about “free trade”. They are, in the case of the TTP, to advance US geopolitical aims by isolating China, and in the case of both proposed pacts, to weaken national sovereignity to make the world safer for multinationals. The revolving door payoffs for the members of the US Trade Representative’s office must be really juicy for them to be so eager to engage in treason.

(full text).

Some Related Links:

Ex-world trade boss slams TPP, on 3news.co.nz, by Pattrick Smellie, July 21, 2014:  The Trans-Pacific Partnership is a step backwards to the days before the World Trade Organisation when the the United States and Europe controlled the global trading system to the detriment of developing economies, says a former WTO director-general Supachai Panitchpakdi …;

Transatlantic Trade and Investment Partnership: Physicians and scientists are warning against damaging current European environmental and health standards, on openPR, Press release from Pabst Science Publishers, July 18, 2014: In an open letter physicians and scientists demand that German Chancellor Dr. Angela Merkel halts negotiations on the Transatlantic Trade and Investment Partnership (TTIP) and request a responsible policy for a sustainable and viable society …;

EU Calls for Greater Transparency in TTIP Talks, on Sourcing Journal online, by Tara Donaldson, July 17, 2014: As talks on the proposed Transatlantic Trade and Investment Partnership (TTIP) continue, members of the European Parliament (MEPs) have called for increased transparency surrounding the trade agenda …;

Backroom talks on dangerous TTIP agreement must end, on EurActiv, July 16, 2014: German MEP Helmut Scholz explains why the GUE/NGL group in the European Parliament is calling for an immediate end to negotiations on the Transatlantic Trade and Investment Partnership TTIP …;

Trading culture for TTIP? on Deutsche Welle DW, by Jochen Kürten and Emiliy Sherwin, July 15, 2014: The Transatlantic Trade and Investment Partnership (TTIP) being negotiated between the US and the EU has so far kept its distance from the cultural sector. Five FAQs on TTIP and culture explain why;

Dems Push to Delay Trans-Pacific Partnership Until After Elections, on New America, by Joe Wolverton, July 15, 2014;

The Trans-Pacific Partnership Could ‘Establish a War of All Against All, on VICEnews, by Jason Louv, July 11, 2014;

Privatisation: Campaigners To Rally Across Britain Against US-EU Transatlantic Trade And Investment Partnership, on The People’s Daily Morning Star, July 8, 2014: Meetings in Birmingham, Manchester and London will build support for axing secretive anti-democratic free trade deal …;

Getting Globalization Right, on Project Syndicate.org, by Ian Goldin, July 16, 2014;

Trans-Pacific Partnership TPP:

  • on YouTube-search;
  • on en.wikipedia: is a proposed regional free trade agreement that is currently being negotiated by twelve countries throughout the Asia-Pacific region (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam) …;
  • on Google News-search;

Transatlantic Trade and Investment Partnership TTIP

  • on YouTube-search;
  • on en.wikipedia; (also known as the Transatlantic Free Trade Area, abbreviated as TAFTA) is a proposed free trade agreement between the European Union and the United States. Proponents say the agreement would result in multilateral economic growth,[1] while critics say it would increase corporate power and make it more difficult for governments to regulate markets for public benefit …;
  • on Google News-search;

Other Links:

Mainly German links, on Real-World Economics Review Blog, by merijnknibbe, July 20, 2014;

Video: Taskforce at Malaysia MH17 crash site not enough, full-scale intl team needed – Putin, 1.35 min, on Russia Today RT, July 20, 2014;

Test it on Brits: Snowden says GCHQ even worse than NSA, on Russia Today RT, July 20, 2014;

Deserving of a special place in hell, on Socialist Unity, by John Wight, July 20, 2014;

The Future Is Not Ours (and Neither Is the Past), on TomDispatch, by Tom Engelhardt, July 20, 2014;

Across Latin America, a Struggle for Communal Land and Indigenous Autonomy, on truthout, by Renata Bessi and Santiago Navarro F., July 20, 2014;

Population of Multiple Bird Species Affected by Neonicotinoid Insecticides – Potential Cascading Effects on Ecosystems, on Global Research.ca, by Heather Callaghan, July 18, 2014:
Netherlands researchers fear the second coming of Silent Spring …;

Glenn Greenwald: Why Did NBC Pull Veteran Reporter After He Witnessed Israeli Killing of Gaza Kids? on Democracy Now, July 18, 2014;

… and this:

… and also this:

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