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Protectionism Rising
A Knock-Out Punch to Free Trade?

The EU should allow national and regional parliaments input on ratifying free trade deals, the European Court of Justice’s advocate-general said on Wednesday. Politico EU reports:

In 2014, the European Commission asked the court to rule if the EU-Singapore trade agreement, and similar upcoming deals such as one with Japan, can be approved by EU governments in the Council and the European Parliament or whether some 38 national and regional parliaments must also be included in the ratification process.

In the opinion, “Advocate-General Eleanor Sharpston considers that the [Singapore trade agreement] can only be concluded by the EU and the member states acting jointly,” a press release said.

Provisions such as dispute settlement, certain parts of investment, or air and maritime transport services fall into a shared competence between the EU and its member countries, Sharpston argued.

Waiting for approval from regional groups makes it very difficult for the EU to negotiate trade deals. In October, Belgium’s Walloons nearly blocked a trade deal with Canada because of parochial concerns about agriculture and dispute resolution processes—roughly the equivalent of the State of Kansas holding up U.S. negotiations. If the European Commission follows the court’s ruling, which is non-binding, that would make every deal subject to the same restraints from regions across the continent.

On both sides of the Atlantic, the winds of nationalism and protectionism are pushing hard against free trade advocates. It remains to be seen if TTP will be revived in any form at all. We suspect the EU-U.S. TTIP negotiations probably don’t have a bright future either.

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  • Gary Hemminger

    I think it best at this point that these trade deals do not go through. Then it will be more clear the downside of not having these deals and folks can then be more clear on why it is good or bad to have the deals. We can always put them in later. the end of days argument is not a good argument.

    • FriendlyGoat

      The difference is that the ones you put in later—–negotiated by Republicans, or by China—–simply have less protections for workers in all countries. There is no question that we will have deals. The only question is whether corporations get “some” of what they want or “all” of what they want. The idea that this gets better for workers with Trump at the wheel is just a complete joke.

  • KremlinKryptonite

    Free trade is largely a myth. Free trade = America opened its markets to friend and foe alike post-WWII, so that they could export their way to affluence. America derives a comparatively tiny percentage of GDP from exports and having such open markets, and why should it when others do not reciprocate? Unilateral disarmament is rarely a good move, and it hasn’t been for millions of Americans.

    • John Schwartz

      Hong Kong and Singapore have unilateral free trade, and are outpacing all of their protectionist neighbors in economic growth. Hardly seems like “unilateral disarmament” is a disadvantage. Of course HK and Singapore have cultures that value hard work and education over trucker hats and crying about how “the system is rigged.”

      America is dragged down by lazy losers with unrealistic expectations. When the precious snowflakes stop demanding first-world salaries for third-world productivity, manufacturing will return to America. Until then, only an idiot (or coerced government contractor) would hire American workers.

      • Jim__L

        Actually, Americans are far more productive than our third-world counterparts — it’s just that companies can get away with paying 3rd-worlders a tenth what they’d have to pay Americans. This, from a Silicon Valley manager directly involved in offshoring tech jobs to India. (Yeah, that’s a thing. Doesn’t affect the billionaires, so they’re all for it.)

        Honestly, this is the way this is going to shake out: the rest of the world will not only industrialize, it will also “consumerize”. Already, hundreds of millions of people are rising up out of poverty. They are not yet the market and the “Most Favored Nation” boosters always claimed they would be; but they’re headed in that direction. It will take time — probably decades. Not a great prospect for a 50-year-old layoff victim.

        Would protectionism on the part of Trump interrupt the consumerization trend? Probably not. The world is a big place, and (to the confusion of those who hate Western Civilization) a whole lot of it has Westernized in the last 25 years.

        I suspect that at this point, the genie is out of the bottle, and short of a huge war (which we wouldn’t can’t count out, of course) it’s irreversible. Heck, even WITH a huge war with WWII-type destruction (and also WWII-type industrial survival, as the US provided last time around) it would only set it back a couple of decades.

        As for HK and Singapore, they have the incalculable advantage of being free traders which are very, very close to places that don’t exercise free trade — they effectively have a monopoly on the sort of business opportunities that that provides. That’s a huge advantage that would fade away.

        On the other side of the coin, would Trump protectionism save American jobs in the meantime? Probably, while reducing our PPP by increasing prices. I’m not sure whether that’s a bigger effect than the low-unemployment-leads-to-high-inflation trend that economists used to worry about, or if it’s almost the same thing; but it’s likely to be something we’re going to try in the next few years.

        The people have spoken, sit back and watch, and try not to be a jerk about it. (Americans are “lazy losers”? Seriously? Well, I guess this is the Internet, any words can be strung together here.)

      • KremlinKryptonite

        They would benefit, wouldn’t they? They are tiny city states (although HK is ultimately under the thumb of the unelected regime in Beijing). Hong Kong has the twelfth worst Gini Coefficient in the world. In comparison, mainland China ranks 27, Singapore 32 and the United States 41. Hong Kong is in the company of Haiti, Sierra Leone, Central African Republic, Honduras and Guatemala in this ranking.

  • Anthony

    Political decisions are high stakes. To make sound decisions requires knowledge – democracy, as we assume we understand it, is the will of the people but what if the people have little clue what they are doing. “…Both vastly underestimated how much foreign investment comes from the EU, and overestimated how much comes from China.”

    “To cast a smart vote, a citizen would need significant social scientific knowledge. They would need to know about the economics and sociology of trade and immigration, the politics of centralized regulation, and the history of nationalist movements.” For more see:

    • Jim__L

      Citizens know better than any scientist what our own interests are, which is why ultimate sovereignty lies with the public.

      The elites really don’t have a clue.

      Hence Trump.

    • Angel Martin

      “To make sound decisions requires knowledge…”

      then how do we explain the disastrous record of failure of the supposedly “knowledgable” policy elite: from the financial crisis, to the Iraq invasion, to the Iraq withdrawal, to the Syrian “red line” and refugee crisis, to the ISIS “JV team”, to Libya… not to mention a total inability to even imagine or deal with the Arab Spring, Crimea, the EU refugee crisis, Brexit or a Trump Presidency.

      The “knowledgeable” elite are on a real losing streak in terms of sound decisions.

      Which suggests the naive concept of “knowedgable” decision making needs a rethink.

      • Anthony

        Your lane as you have no idea what’s being referenced (and Post is four days old) Disappear! (better still, write an original thought to Post)

  • Wayne Lusvardi

    Uh hum, isn’t what we call free trade merely the re-monopolization of industry? No one could create a government owned monopoly like China runs in the US, so we just allow American manufacturers to off shore the monopolies. The chief architect of the globalist economy, Larry Summers, as much as admitted that what free trade is, is monopolization and an end run around anti-trust rules.

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