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The Libertarian Podcast: The Fight Over Free Trade
In this week’s episode of The Libertarian podcast from the Hoover Institution, I lead our own Richard Epstein through a discussion of the many controversies birthed by the debate over the Trans-Pacific Partnership. Do trade deals put the screws to American workers? Is the quest for fast-track authority another example of presidential overreach? Should the public be worried about the secrecy around the TPP? Does this deal present threats to American sovereignty? All those topics and more will be addressed when you listen to the show below or subscribe to The Libertarian via iTunes.
Published in Economics, Podcasts
This exchange was very disappointing. You mumbled through the points about Sessions objections to the trade deals, saying nothing about whether these trade deals could compromise our ability to handle our own immigration policy. That’s an enormous omission–so much so that, much as I like Mr. Senik and Prof. Epstein, I’m left to suspect that the omission was intentional. And that leads me to wonder why.
That wasn’t an intentional omission. The Sessions bit was a late addition and the source material we were using didn’t mention the immigration angle, which, as best I understand, has to do with the Trade in Services Agreement, not the TPP.
For the record, we don’t elide issues for ideological purposes. Richard isn’t bashful about opining on anything and I have no reservations about asking him about anything (apart from post-1962 pop culture, anyway) either.
Troy,
Since we can’t see it our objections must be theoretical only. This is what I am talking about.
1) Sessions & staff has a reputation for homework and straight shooting. He isn’t a tea party bomb thrower (almost nobody is but you must say this or else expect to be co-opted).
2) I grasp the value of a trade agreement. I grasp the difficulty in negotiating a trade agreement. I grasp the difficulty in administering a trade agreement.
3) I don’t trust Obama, Boehner & McConnell to deliver. First, because Obama has shown himself to be actively opposed to America’s national interest. Second, because Boehner & McConnell have shown themselves incapable of stopping Obama. Third, because the Gruber standard of transparency has been in effect for 6 years and I haven’t seen any evidence that anything has changed.
4) Total unreality reigns if we think free trade will continue as China’s still Marxist regime gains military hegemony over the region. We better start building ships quickly or this piece of paper is not going to be worth the pdf it’s published on.
Frankly, I am somewhat appalled by Dr. Epstein’s near religious reaction to the fact that Ted Cruz isn’t on board. Cruz’s TPP apostasy must be punished immediately! Captain Epstein Bligh orders 50 lashes for Ted. He dared suggest that bringing breadfruit back from TPP Tahiti might not be a sacred mission from on high. How dare he!
Regards,
Jim
Not sure I understand this point. Is China going to start interdicting ships on the open seas? Or are you saying it will pressure, say, Taiwan into terminating whatever trade relationships are established via TPP?
Just as with the minimum wage, the gap between economic theory and the reality of power relationships in this country is large enough to drop a small town in. I’d like to recommend Mr. Senik and Mr. Epstein read a book called Factory Man, by Beth Macy. It’s the story of John Bassett III and his efforts to save the jobs of workers in Bassett, VA at the Bassett Furniture Company. If you are unwilling to invest the effort in reading it you might want to listen to the very informative and entertaining NPR podcast linked here:
javascript:NPR.Player.openPlayer(331356258, 331422254, null, NPR.Player.Action.PLAY_NOW, NPR.Player.Type.STORY, ‘0’)
Another link this is the “Fresh Air” episode from 7/14/14″
http://www.npr.org/2014/07/14/331356258/how-a-factory-man-fought-to-save-his-furniture-company
FD,
Free trade has always existed within a framework of power relationships. The sun never set on the British Empire because the fleet could enforce free trade. We are used to the post WWII world where American power was preeminent especially on the sea. We are unaware what living in a more chaotic environment could be like. If China can pressure the TPP members we will have problems. Living in a dream world on defense issues, something BHO has turned into a science, can destabilize the whole region.
Putin did not grab Crimea and China is not building islands because they are vacation destinations.
Regards,
Jim
Inveighing against “power relationships” in the context of economics is a fundamentally Marxist argument. Please explain since I assume that’s not your intent.
I agree that Obama is weak on defense issues but I honestly don’t see why that should be an argument against a trade agreement. It’s a connected but separable issue. And you can make an honest argument that free trade is actually a positive factor, or would be, in terms of maintaining American hegemony in the area.
“Inveighing against “power relationships” in the context of economics is a fundamentally Marxist argument. Please explain since I assume that’s not your intent.”
As for Marx, even the blackest night has a little day. I’m saying K-Street and the rest of the beltway banditos can turn the most innocuous, fair sounding legislation into a travesty in the way it’s interpreted and administered. Senator Sessions is no Marxist, but he has seen the difference between what politicians say they are going to do and what they really do after they are given the discretion to sell the American workers out. I am not against fair trade, and I support giving Obama the ability to negotiate with a fast track agreement, but I am very suspicious of this deal.
FD,
I am not arguing against free trade. If you noticed my original argument is that we can’t trust Obama to do anything in the American interest. So far he has literally done things intentionally against the American interest to ‘down size’ us. I don’t trust Boehner & McConnell to have the brains/guts to stop him.
The military side would be a natural component of the TPP idea but we see nothing. A massive expansion in the number of trained medical personnel would have been a natural component of any health care initiative that would massively increase the demand for services but we saw nothing. Insurance prices are rising as are wait times at emergency rooms. This isn’t bad planning this is no planning at all. BHO plays politics and nothing else.
Maybe BHO has all the gas let out of him. Maybe Boehner & McConnell have grown a brain & a spine. If so TPP could be great.
We’ll see.
Regards,
Jim
Obama got two perfectly good Free Trade Agreements passed; South Korea and Panama. So far as I can tell, there’s no reason to believe that a future Obama FTA would be inferior to the previous Obama FTAs. Its true that Bush had already negotiated most of the details, but Obama renegotiated what he wanted, and could have renegotiated more.
This agreement is with conservative foreign leaders (Harper, Abbot, Abe, etc.), whereas Panama was led by relatively left wing folks. It would have been easier to make that a left wing agreement.
I didn’t know about these. So why do you suppose those two flew in under the radar (did they?) and this one is generating so much more controversy?
Great points, but they all assume that Obama has proposed a trade agreement that seeks expanded trade. Why? We do not know what is in it. He argues that these things are always secret. They are not. We generally knew what was in these authorities. Moreover, the special interests have designed this thing and are selling it. The other error is to assume that because Congress ultimately gets an up or down vote, it is in control. Now as we enter this thing the authorities are complex but probably comprehensible, but at the end they will not be comprehensible and if Republicans oppose the efforts to impose wage levels, labor and environmental standards on the world the media will descend on them saying they oppose trade, stronger environmental and labor standards and because they will not have read and certainly will not understand the agreement they will be brow beaten into support. It is crazy to give this Administration authorities to negotiate anything in private. Why on earth are we assuming that an anti trade, anti market, anti freedom, pro centralization administration will negotiate something that promote free trade. Just because the usual suspects oppose an authority they haven’t read because it sounds like trade expansion, we should not support something we haven’t read for the same reason.
They were front page news for a while, but they were a bigger deal on the left than the right.
It’s always weird which agreements get noticed and which don’t.
On the Korea FTA, there was only one GOP Senate No vote and that was from Olympia Snowe. On the Panama deal, the vote was unanimous on our side.
There haven’t been a lot of times that Obama has overcome Democratic Congressional opposition with unanimous GOP support.
1. Because that’s all that TPA would allow him to do.
2. Because that’s all that the WTO would allow.
3. Because otherwise the House wouldn’t pass it.
4. Because we know how trade agreements work, and the strength of the interests currently benefiting from the trade expanding agreements that will be subsumed into this one.
5. Because the US is only one party to this 12 way agreement, and the other parties are overwhelmingly pro-trade.
6. Because Obama has passed pro-trade FTAs before.
So you’ve read it and know what it might allow. What FTA did he pass? Colombia? It was signed and sealed before he was elected and he almost punted on it because the far left opposed it. Of course the others are pro trade they are export led economies for the most part, so what non trade concessions are we asking for? We don’t know, because we don’t know what’s in it. We know how trade agreements in the past have worked, they were not secret. This one must be different otherwise why is it such a secret? Are we trying to sand bag China, is that why it’s so secret?
Colombia, Panama, and South Korea. They were renegotiated by Obama.
US FTAs are pretty similar to each other, because TPA isn’t all that flexible. In each case, Obama slowed the rate at which the temporarily retained tariffs reduced.
Everything in FTAs is trade, but the stuff that some people call non-trade includes purchase quotas (so countries can’t demand that domestic products are used, particularly in the entertainment sector), investor state dispute resolution (which provides a transnational equivalent of the Takings Clause and the institution to enforce it), phytosanitary stuff (don’t let tree eating beetles in without inspection), labor chapters (improving the balance of trade with a specific treaty partner cannot be the reason for removing labor laws or not enforcing them), environmental chapters (generally weaker than labor, but the same idea), discriminatory regulatory requirements (eg. vehicular maintenance standards), etc..
We don’t know the details, but we do know the structure of the TPA, we know the current legal framework, we know the people who are renegotiating it, etc. etc. etc. as in my six points. It would be legally difficult, both on a domestic and international level, for Obama to do anything particularly different. It would also be politically difficult, both on a domestic and international level, for Obama to do anything particularly different.
Also, we have a draft, and the guys who really know trade well (Portman was USTR, Roberts is a serious expert) are supporting it after having access to the draft. Plus, if the department of the USTR was doing something really whacky, we’d know. I know some of those guys and they’re a: pretty bipartisan and b: they’re all keen on trade.
Nope. They’ve all been negotiated in secret. Every single one of them.
I mean, sure. China is one of many troublemakers that would have an easier time being jerks if the negotiations were public. It’s not specific to China, though. This is just how trade agreement negotiations work.
Also, as Jon noted, Colombia. I don’t know how I forgot about it. D’oh.
Have you actually read the various legislative bills?
Have you actually read these bills, or do you listen to national talk show hosts for info? Cruz flip flopped after seeing that he is under 5% in polling, IMO. He had a healthy defense of his vote FOR TPA just a week or so ago.
UPDATE: If anyone is still paying attention to this post after the Court’s Obamacare travesty.
EPIC FAIL : BOEHNER RETURNS MEADOWS TO CHAIRMANSHIP AFTER BUCK KEEPS POST
Captain’s orders I’m sure.
Regards,
Jim