Tuesday, January 24, 2017

Trump and trade...

Trump and trade...  Well, he promised during the campaign that he would deep-six the TPP, and he did.  It's challenging to assess what that really means, given the hysterics both sides are spooning up to the press.  There's precious little actual analysis out there, though there is some if you look hard enough.

What are my thoughts?  Well, I'm a committed proponent of free trade.  As in total free trade – I think the world would be much better off if there were either no import/export taxes or other barriers, or if they were fixed and constant (think VAT) across all countries.  But I know that's a fantasy, one that I'll never live to see.

But the TPP never was a “free trade” agreement.  It was, instead, an agreement to reduce or eliminate trade barriers in certain cases, with boatloads of exceptions for various countries that wanted to protect certain internal industries.  It was more like a gigantic and unwieldy conventional trade agreement than it was a free trade agreement.  I suspect it was doomed to fail in the long run even had it been approved here in the U.S.  I'm not sure (and I doubt anyone really is, despite the proliferation of firmly held opinions) whether the U.S. was a net winner or loser under the agreement.  I don't have strong feelings about it either way.  I'm ok with it being trashed.

Actual free trade, or movement in that direction, is another story altogether.  On that front, Trump's rhetoric is rather depressing to me.  He hasn't actually done anything yet, so we don't really know for sure if his actions will match that rhetoric.  It's possible (he says, trying to be optimistic) that the rhetoric is mainly staking out a bargaining position, and that in the end he'll negotiate something more to my liking.  NAFTA promises to be an early “tell” – he's already announced that he's going to renegotiate it.  All the sober analysis I can lay my hands on says that NAFTA is a huge win for the U.S. (and our trading partners – it's not a zero-sum game).  Where we end up on NAFTA will foreshadow Trump's trade policy, I think, so I'm following that avidly...

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