Monday, October 01, 2018

HIstory of Trade Agreements

So who was surprised that a Nafta agreement was eventually reached? And since no deal was repeatedly declared to be better than a bad deal, it must by definition be a good deal.

I was reminded of the observation  made when the Canada-US trade agreement was first reached: that it was not so much a bad deal as a framework for an endless series of bad deals.  We get a promise of prosperity by hitching our economy to the Americans'. Then, as our dependency on the American market grows, the deal becomes more essential, the difficulty of getting the US to comply with the rules grows, and the price to be paid for our market access more expensive. I wasn't expecting a failure in this negotiation, but I might not have regretted it much.

For all the talk of tariffs these days, tariffs between the US and Canada were not large even when the first deals were negotiated.  The issue was always what are called "non-tariff barriers."  And non tariff barriers usually means: government regulation.  As legal scholar Malcolm Lavoie has written, all non-uniform public regulations are in some way a burden upon trade and "can be construed as non-tariff barriers."  Trade treaties often seem as much a way of hobbling public action, even government action that supports and increases economic activity, as a way to increase trade and prosperity in general  I guess we will live with that a while longer.

Update, Oct 2.  As an example of the hobbling of public policy.  New-Nafta includes a provision forbidding Canada from having data-localization requirements.  In effect, Canadian privacy law can no longer requires that stored data on Canadians be stored in Canada where it is subject to Canadian law.  So more and more Canadian data storage will be outsourced to American server farms, where the Patriot Act and other American laws make it accessible to American government surveillance.  Hey, it's the price of "free" trade, that's all, and free trade is always a good thing, no?
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