Waylaid Dialectic

November 3, 2013

The trouble with free trade…

Filed under: Trade — terence @ 10:44 am

My reasons for opposing free trade are surprisingly similar to my reasons for opposing Abominable Snowmen. I oppose both, because neither exist. There is no such thing as free trade. The term is a marketing gimmick used to make a certain approach to trade sound appealing — free as in ‘born free’, as in ‘free at last’. In reality trade takes place everywhere on Earth bound by rules and regulations. (Consumer protection rules, labour laws, rules to prevent monopoly price gouging, rules to prevent theft…) Without these rules, exchange of all but the most primitive sort would be impossible.

Saying this isn’t the same as saying trade is bad (it’s not; it’s essential) or that globalisation is bad. But the rules that govern trade matter. They shape the outcomes we see from trade and exchange. And when the rules governing trade are inequitable there are usually welfare consequences. Indeed part of the reason New Zealand is a relatively well developed country is that we have rules that enable trade in a manner that is usually fairly fair. Rules developed and debated in the open and amongst a power structure of somewhat balanced countervailing forces, amongst the governing framework of democracy.

In the case of international trade things aren’t so simple. There is far greater potential for power imbalances, which reduces the odds of good rules. There is also often far too little transparency to international trade agreement negotiations. Yet transparency is crucial. Not only to let us know if the rules being negotiated are good ones but also because there are always be winners and losers from trade agreements, and if we are to have any idea of who these will be, we need to know what’s in the agreements in question.

This still isn’t an argument against international trade (it’s generally a very good thing). Rather it is an argument for transparent trade negotiations. Something we currently lack when it comes to the Trans Pacific Partnership trade agreement. And if you would like to know which aspects of your life your government is currently signing away as it negotiates this agreement, or if you just want other people to know to facilitate analysis and debate, the It’s Not Right petition is for you. You can sign it to call on the New Zealand government to make the text of the Trans Pacific Partnership available for public scrutiny. Signing takes all of two minutes, which is a very small price to pay to promote democratic deliberation.

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