Autonomous Liberalization
Tyler Cowen gives CAFTA a very qualified endorsement which I mostly agree with. The clincher:
Failure of the treaty would be a disaster, again for symbolic reasons. Trade negotiations would slow down significantly, and the age of trade agreements might be over.
What age of trade agreements? According to the World Bank’s World Economic Prospects: Trade, Regionalism, and Development unilateral trade liberalization accounts for two thirds of tariff reductions over the past twenty years. Regional agreements like CAFTA only accounted for ten percent.
Downgrade symbolism and upgrade strategy: unilateral free trade is the way forward, followed by worldwide agreements, the latter spurred by the former. And drop the non-trade stuff, like exporting intellectual protectionism.
Still, I find it hard to not root for CAFTA, if only because the economic neanderthals on the other side are so ugly.
(CAFTA is doubtless a very ugly treaty too, with payoffs and exceptions galore. Dare I say that those pursuing treaties rather than unilateral liberalization overestimate public good problems and underestimate rent seeking problems?)
December 30th, 2005 at 14:05
[...] I’d really prefer to give entirely outside the U.S. and other wealthy jurisdictions. However, I’m not interested in any organization that gives direct aid (reactionary, low long term impact), supports education (feel good, low long term impact), exhibits economic neanderthalism, has religious or social conservative ties, or is a shill for U.S. foreign policy in the areas of drugs, terror, or intellectual property. I am looking for organizations that support autonomous liberalization or any of the goals exemplified by the organizations I already support above. Suggestions? [...]
June 23rd, 2007 at 0:16
[...] classes of trade barriers simply provides an excuse for “retaliatory” protectionism. Autonomous liberalization does the most good, and I suspect that’s as true of free speech as any other area. On the [...]