Sealing off from the world

Trade

Most people see this story, via Matt Yglesias and ask themselves “How on God’s green earth is this even relevant?” I read the same words and see the eventually downfall of the international economic system and the emergence of neo-mercantilism.

Ok, so maybe I’m exaggerating just a little bit.

The story of the seal tariff is a good example of one of the difficulties of trade liberalization. Namely that trade intersects with a whole range of other important issues such as climate change, animal rights, respect for traditional ways of life, labor rights and regular old power politics. What’s often see by economists as a simple decision (trade liberalization is always beneficial in the long run) often is only part of the consideration when it comes to trade policy. The House Democrats opposed the Columbia Free Trade Agreement in the last year of the Bush Administration not because they feared the agreement would destroy jobs in the US (almost all Colombian goods were entering the country duty free due to prior agreements) , but because they believe labor unions weren’t being protected adequately. The carbon tariff provision in  Waxman-Markey climate change bill, while it has some economic merit, is another example of using trade as a another means towards a non-economic end.

This tension between economic analysis and other concerns leaves trade in the odd position as being both an ends and a means. Politicians talk up trade liberalization but threaten to weld trade agreements to gain leverage or favor.

Picture courtesy of me. I was in London right before the G20

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Comments
2 Responses to “Sealing off from the world”
  1. sharbourt says:

    That’s right: there just aren’t that many means of inflicting punishment on the international level. War, diplomacy, and trade… and trade’s the most harmless and the one most subject to legislative pressures.

  2. sharbourt says:

    Although… I have to say that on this particular case, I don’t really see too much of a threat to the liberal trading regime.

    The WTO limits on non-tariff barriers to trade– at least in my interpretation– are about preventing governments from using excuses like environment or labor standards as ways to mask opposition to free trade. That was clearly the case in the Colombia FTA– the AFL-CIO got lots of Democrats to buy the flimsy argument about Colombian unions.

    Here, though, I think you have more of a legitimate case of trying to sort out conflicting values: animal protection and free trade. Both good, but which is more important? As long as the EU shows no preferential treatment to European seal trappers (if there are any) or to one country or region’s seal trappers, then I have no problem. I might choose differently, but I can’t argue against the process.

    Now the anti-WTO crazies using this as a bandwagon to unite the uninformed behind their cause…that’s more of an issue.

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