May 19, 2015

When Free Trade Really Isn't

Over at The Acton Institute, Elise Hilton recently posted this article in favor of the Trans-Pacific Partnership. Why does she come down in favor of the TPP? Because it is a "a free trade agreement . . . that purports to increase economic growth, jobs and free trade."

The problem is that, despite the doublespeak, this so-called free trade agreement is no such thing. Far from representing free trade, the TPP actually represents crony capitalism on a massive scale.

Richard Ebeling of The Mises Institute explains:
. . . the Trans-Pacific Partnership is not a free trade agreement. . . . like all other trade agreements in the post-World War II era [the TPP] is a managed trade agreement.

That is, governments of the respective participating nations negotiate on the terms, limits and particular conditions under which goods and services will be produced and then bought and sold in each other’s countries. The Japanese government, for instance, is determined to maintain a degree of trade protectionism for the benefit of Japan’s rice producers, who are fearful of open competition from their American rivals.

The U.S. government is under pressure from the American auto industry, for example, to continue limiting greater competition from the Japanese automobile industry. American labor unions want to restrict the importing of goods produced at lower labor costs abroad than U.S. manufactured goods, because American consumers might prefer to buy the lower priced foreign products and thus risking the loss of some of their union members’ jobs.
You can read the rest of Ebeling's article here. In it, he explains the benefits of free trade. The only problem with free trade is that sometimes it really isn't. 

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