Editors Note: The following is a guest post by Seton Motley, founder and President of Less Government.
Most of us on the Center-Right very much like free trade – for at least a couple of reasons.
The freer trade is – the cheaper the things traded are. Which makes life easier for everyone in the nations engaged in said trade.
You know what else makes their lives easier? Not being at war. If countries are engaged in commerce with one another – they are far less likely to be engaged in conflict with one another.
These sentiments were very well captured by writer Aaron Sorkin in his great show “The West Wing”:
You want the benefits of free trade?…Food is cheaper, clothes are cheaper, steel is cheaper, cars are cheaper, phone service is cheaper…It lowers prices, it raises income….
Free trade stops wars. And that’s it. Free trade stops wars. And we figure out a way to fix the rest.
Unfortunately, the global market landscape is not at all free – it is a lattice work nightmare mess of regulations, taxes and subsidies.
We didn’t get here overnight. A decades-long, international regulatory arms race got us here – with nation after nation engaged in an ever-escalating tit-for-tat on terrible policy.
“You’re taxing this? Ok, so will we.” “You’re subsidizing that? Fine, we’ll subsidize it too.” Lather, rinse, repeat – for about eighty years. And here we are.
Ambassador Michael Froman is the United States Trade Representative. (Not to be confused with Abe Froman – the Sausage King of Chicago.) His office just issued the “2015 National Trade Estimate Report on Foreign Trade Barriers.”
It individually looks at our trade relationships with sixty-one nations and nation-conglomerates (the European Union and the Arab League are listed as units – with each nation therein also individually analyzed).
It ain’t good.
Trade barriers take on many, many more market-warping forms than most of us can likely even imagine. To wit – from the report:
- Import policies (e.g., tariffs and other import charges, quantitative restrictions, import licensing, customs barriers, and other market access barriers);
- Sanitary and phytosanitary measures and technical barriers to trade;
- Government procurement (e.g., “buy national” policies and closed bidding);
- Export subsidies (e.g., export financing on preferential terms and agricultural export subsidies that displace U.S. exports in third country markets);
- Lack of intellectual property protection (e.g., inadequate patent, copyright, and trademark regimes and enforcement of intellectual property rights);
- Services barriers (e.g., limits on the range of financial services offered by foreign financial institutions, regulation of international data flows, restrictions on the use of foreign data processing, and barriers to the provision of services by foreign professionals);
- Investment barriers (e.g., limitations on foreign equity participation and on access to foreign government-funded research and development programs, local content requirements, technology transfer requirements and export performance requirements, and restrictions on repatriation of earnings, capital, fees and royalties);
- Government-tolerated anticompetitive conduct of state-owned or private firms that restricts the sale or purchase of U.S. goods or services in the foreign country’s markets;
- Trade restrictions affecting electronic commerce (e.g., tariff and nontariff measures, burdensome and discriminatory regulations and standards, and discriminatory taxation);
- Other barriers (barriers that encompass more than one category, e.g., bribery and corruption, or that affect a single sector).
Yeesh. And there are likely many others the government missed. It is, after all, the government.
Trading trade barriers – rather than goods and services – leads to greater antagonism. Which leads to more trade barriers (“We’ll show them…”). Lather, rinse, repeat….
Sitting down with nations to try to bring down these barriers nets benefits – in many directions.
(Talking just to talk – just for show – doesn’t. Photo ops in the Oval Office aren’t substantial international interaction. A tangible objective – a seriousness to the niceties – makes a positive outcome exponentially more likely.)
As the relationships thaw – the trade barriers fall. And the parties involved are going forward much less likely to want to shoot each other.
There is underway one effort – on one traded commodity – to emplace this sensible approach.
Expressing the sense of Congress that all direct and indirect subsidies that benefit the production or export of sugar by all major sugar producing and consuming countries should be eliminated.
May it be replicated a thousand times over. Lather, rinse, repeat – on a rapidly rolling assembly line.
We have nearly a century’s worth of heinousness to undo.