Wednesday, April 11, 2012

Against Knee-Jerk Attitudes Towards Trade

. Wednesday, April 11, 2012

It's been awhile, but I used to tussle with Public Citizen a some. I kind of stopped paying attention to them, however, as I found their knee-jerk approach to the political economy of trade to be intellectually unsatisfying. It is satisfying, on the other hand, to see someone else knock them down as well as Daniel Ikenson at the shell that used to be Cato does here:

Contrary to the characterization that Wallach and other anti-globalistas have been trying to paint for years, the WTO is not some faceless bureaucracy issuing edicts that run roughshod over national sovereignty and local laws. The WTO has no special power to compel any member state to do anything. Contrary to Wallach’s claim that a WTO “Tribunal” (sounds like a military junta, no?) “ordered” the United States to “dump” a “landmark” anti-smoking law, the WTO Appellate Body merely requested (see above) that the United States bring a specific clause of the law into conformity with U.S. treaty obligations. WTO Panels and the AB only recommend or request. ...
The WTO did not rule that the United States cannot have an anti-smoking law – only that that law was not being applied evenhandedly to domestic as well as foreign companies. By banning clove cigarettes, which have been sourced principally from Indonesia over the years, but not menthol cigarettes, which are produced primarily in the United States, the U.S. law discriminates against producers from another country – namely, Indonesia.
I understand why people are opposed to trade. I understand why people are skeptical of the WTO. Trade creates winners and losers, interest groups (and governments in thrall to them) try to game the system, etc. The WTO was set up largely by powerful states that were seeking to further their interests. I do not, however, understand why people are opposed to trade or skeptical of the WTO as a general principle that leads to opposing trade or the WTO in any and every context. Particularly for folks on the left making reference to WTO rulings like this one, which is clearly good for producers in developing countries. And, if they lead the U.S. to change anti-smoking laws to be more inclusive, may be good from the perspective of public health as well.

In situations like this I often refer to Krugman's old article on comparative advantage. It's far from perfect -- and I imagine he'd disown it these days -- but I really think he has a point. Some people just don't like trade because they don't want to like trade.

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Against Knee-Jerk Attitudes Towards Trade
 

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