Monday, January 23, 2017

Confusion About Trump and Trade Deals

At the post, Trump Issues Executive Order Today Withdrawing From TPP, I find this comment:
There is clearly protectionism, cronyism, implicit subsidies, labor and environmental regulations in TPP. RW sounds like one of those ass-backward libertarians in his apology of TPP.
I believe I have made it exceptionally clear in numerous posts that TPP is a crony trade deal. Indeed, I wrote an entire post about it.  SEE: Free Trade, No Trade, Crony Trade and Trump Trade.

But a crony  trade deal is better than a situation where even more trade is halted. I, of course, would like to see complete free trade but a trade deal that removes a multitude of restrictions is not ass-backward libertarianism, if it is better than the proposed alternative in moving in the direction of freedom.

So in one tiny comment, we have a commenter who is confused about the complexity of trade deals such as TPP and the nature of ABL.

ABL occurs when government control is expanded to combat previous government failures, e.g. vouchers, federal troops to patrol cities, establishing tariffs to "fight unfair trade."

Trade deals, such as NAFTA and TPP, are far from libertarian ideals but they remove many trade restrictions. That is, they are in many ways a shrinkage of government control. Trump's withdrawing from TPP is not because he wants more freedom of trade. He has indicated a clear desire to become even more protectionist or did the commenter forget what the President said a few short days ago in this inauguration speech:
We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength...

America will start winning again, winning like never before.

We will bring back our jobs. We will bring back our borders. We will bring back our wealth...

We will follow two simple rules: Buy American and Hire American.
This is not a man who is withdrawing from TPP to make trade easier. He is doing it to make it more difficult to trade across borders. It is a move to increase the amount of government control.

The three men he has assigned to renegotiate trade deals,  Wilbur Ross, Peter Navarro and Robert Lighthizer, are all hardcore protectionists. They were put in their roles not to improve upon TPP or NAFTA and increase trade. They are there bizarrely to limit trade even more.

Supporting Trump's move here is ABL on steroids.


  1. "So in one tiny comment, we have a commenter who is confused about the complexity of trade deals such as TPP and the nature of ABL."

    I covered TPP in 2013 after the documents were leaked and before anyone but union people were talking about it. I spoke with advisors to the US trade representative from CEI and CATO and union leaders. I read the leaked report on IP reform in 2013 and the Wikileaks from 2015 so I am somewhat familiar with the agreement.

    TPP does remove some 11,000 tariffs between the 12 countries. But here's the thing, the countries still carve out exemptions for their special interests. Congress is kept in the dark about negotiations, while big corporations are given access to the US Trade Rep to lobby and are kept up to date on what's in the agreement. The TPP includes enhanced copyright provisions for Big Pharma and Big Hollywood to delay generic drug production and force ISPs to crack down on pirated videos. That's protectionism. The TPP requires the lesser countries to give up some sovereignty to international courts and requires them to enforce stricter labor and environmental laws. That's protectionism and global government.

    There were 29 chapters in the TPP and only 4 had to do with removing barriers to trade. This is corporatism, plain and simple. Corporatism indeed helps increase trade volume, but it comes at a high cost to the individual.

    Sorry, but you cannot say that support for School Vouchers is ABL but support for TPP is not. School Vouchers clearly takes power away from Big City School Bureacracy and also works as a tax cut and also somewhat privatizes education. It also does give government some control over private schools that participate (whose independence is being eroded at the federal level already).

    Trump is not increasing government power by killing TPP, he is continuing the status quo. Enacting TPP would be increasing government power and increasing global corporatism. Increased and freer trade is the carrot. Increased government and corporate power and control over the individual on a global scale is the stick.

    There is NO reason for the US to enter TPP. The libertarian/free market position should be that trade treaties should not exist. Libertarian support for government managed trade agreements is taking the shortest view. It is absolutely ABL. Free trade should be unilateral.

    I'll leave you with the great Murray Rothbard on NAFTA. I'm sure Rothbard would have hated TPP as well.

    “The folks who have brought us NAFTA and presume to call it ‘free trade’ are the same people who call government spending ‘investment,’ taxes ‘contributions,’ and raising taxes ‘deficit reduction.'" - Murray Rothard

    1. But isn't the TPP good so far as it makes it more difficult for governments to impose tariffs?

    2. There will be 0 tariffs when we're ruled by a one-world totalitarian-socialist government. No currency change fees either.

    3. Exactly, the TPP is just differently managed trade that expands government and corporate power.