FREE TRADE

Steel Tariffs Are a Net Job Killer: "In a decision largely driven by his political advisers, President Bush set aside his free-trade principles last year and imposed heavy tariffs on imported steel to help out struggling mills in Pennsylvania and West Virginia, two states crucial for his re-election. Eighteen months later, key administration officials have concluded that Bush's order has turned into a debacle. Some economists say the tariffs may have cost more jobs than they saved, by driving up costs for automakers and other steel users." When will they ever learn? More on the folly of Protectionism here.

"We are hearing more and more about the loss of manufacturing jobs.... History, however, suggests that manufacturing can take care of itself. It's important to remember that warnings about the death of manufacturing are not new. I have been hearing them for more than 20 years." More here.

The WTO: "The talks in Cancun failed for two reasons. First, they failed because Americans and Europeans talk a great game about free trade but are outrageously protectionist when it comes to agriculture. And, second, because the poor countries, led by Brazil, were sufficiently peeved by point No. 1 so as to foolishly decide that no progress was better than some progress."

This abstract from an academic paper shows that the WTO is something of a paper tiger anyway. The evidence is that the minor concessions made via the WTO and its predecessor body (GATT) have had very little beneficial effect. But special concessions to allow goods from poor countries into rich countries do have a large beneficial effect.

Jagdish Bhagwati and Arvind Panagariya argue that the bilateral trade deals are pretty useless too and that real free trade would be much better.

Colin Teese argues that the proposed US-Australia "Free Trade" agreement is of dubious value too -- depending on your assumptions. But there is little doubt that it will help our farmers IF it gives them better access to the US market. But that is the big sticking point of course.

"Globalisation is good" tells a tale of two countries that were equally poor 50 years ago - Taiwan and Kenya. Today Taiwan is 20 times richer than Kenya. We meet the farmers and entrepreneurs that could develop Taiwan because it introduced a market economy and integrated into global trade. And we meet the Kenyan farmers and slum dwellers that are still desperately poor, because Kenya shut its door to globalisation. Link via Valete Fratres.

US to China: Make goods more expensive! "There is, it seems, a segment of the American population that firmly believes China to be the greatest economic threat facing our country. As if domestic taxation, regulation and deficit spending were of negligible effect upon America's economic well being, dealing with the threat from the Far East now ranks as our nation's #1 priority." And what a "threat" it is: How dare they sell us electrical goods at low prices!

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