FTAs: Farcical Trade Agreements

With the advent of trading blocs such as the European Union, NAFTA and APEC, many so-called Free Trade Agreements (FTAs) have been agreed upon. Though these deals have undoubtedly done much good, many protectionist policies that hinder true free trade remain in place. So how free is “free trade”?

free_tradeFirst, let it be understood that free trade does not originate from government. It is the natural state of things as it arises spontaneously in a free society; a manifestation of the human tendency to cooperate and trade in ways that benefit all parties involved. Divisions related to such things as race, nationality, religion, political persuasion, and sexual orientation don’t naturally come into play until politicians and other control freaks create or emphasize them.
That said, if people in government were so inclined they could of course embody this natural state of affairs in some sort of statement, much like the Bill of Rights did. Still, this would merely represent the recognition of a natural right on the part of the signers – not the creation thereof – and would therefore ultimately be irrelevant to the veracity and universality of the principle itself.

Unfortunately, and in violation of one’s freedom of association, the current system does not recognize free trade as such. Governments even go so far as to actively hamper trade by imposing restrictions on people both within and outside of their jurisdictions. It is only when it is perceived to be to their benefit that government officials reduce trade barriers by way of FTAs. Consequently, economic opportunities take center stage in debates about free trade while natural rights are rarely brought up. Consider these recent examples:

– Last October the EU and Canada reached a free trade agreement dubbed the Comprehensive Economic and Trade Agreement, or CETA. Contrary to what one might expect from an agreement purported to achieve free trade, CETA does not prohibit subsidies. Rather, it provides “additional transparency and consultation mechanisms for subsidies to enable parties to exchange information and to discuss subsidy programs that may be adversely affecting their interests”. With regard to agricultural the agreement promises a “consultative mechanism on all forms of government support”.
– The Transatlantic Trade and Investment Partnership (TTIP) is a proposed free trade agreement between the European Union and the United States. Despite being touted as “the world’s largest free-trade deal”, it remains to be seen how free EU-US trade will turn out to be. The odds of the EU throwing out Common Agricultural Policy subsidies, which constitutes almost 40 percent of its total budget, are basically zero. Similarly, TIPP is highly unlikely to signal the end of U.S. government subsidies to Boeing and Airbus or to its farmers. There is a reason why these billions are doled out every year – think special interest groups and lobbying power.

Needless to say, in the current system any and all agreements between governments that free up trade in one way or another constitute a step in the right direction, and FTAs do deliver on that front. Nonetheless, it is downright misleading to use the term “free trade” in referencing them. After all, a genuine free trade agreement literally would not have to be longer than a few lines, nor would such a deal require secret negotiations.

Understand that the above is not just an exercise in nitpicking. Rather, it reveals the lack of a principled pro-liberty standpoint based on natural rights. Free trade should exist not just for practical reasons, but because freedom of association is recognized as a basic human right.

In the current paradigm of imaginary lines drawn on maps with people in suits and uniforms claiming the right to rule over you, the legitimacy of trade restrictions is hardly ever questioned. Yet the right to trade freely is not a gift from government; it is an inherent right. That right has been violated for so long that most people don’t give it any second thought, but it’s really just common sense.

Free trade agreements are a farce. If you recognize that, you can help advance the cause of liberty by educating others. For restricted trade equals restricted freedom.

 

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One thought on “FTAs: Farcical Trade Agreements

  1. Pingback: The Case Against the European Union (Part I) | The Raw Report

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