The US and the EU are currently working on the Trans-Atlantic Trade and Investment Partnership. There is a lot to question about this trade deal and the negotiation process. What nobody is focusing on, however, is the message that this sends to the rest of the world, much of which has spent decades jumping through hoops to be part of the World Trade Organization. This video attempts to put the focus there…
Let’s talk about trade.
Trade is the life’s blood of the world economy, and is one of the main things keeping us from each other’s throats.
Trade is not always a good thing. From slavery to oil to bananas history is littered with examples of savagely exploitative trade. But if it’s done right, it can work to lift whole regions out of poverty, and provide the funding for some of our greatest cultural achievements.
You may have heard of the World Trade Organization. Some people really don’t like it.
I tend to think that the WTO is a good thing, or at least that it is potentially a good thing. When a country signs on it agrees that it won’t charge more than an x % tax on a certain good when another WTO member tries to import that good into their country. The tax can be significant, you just have to treat all WTO members equally. In return you get to access the other WTO markets on the same terms as other members. Historically, the great prize of membership has always been access to the US and EU markets on the same terms as everybody else.
The WTO, and its Predecessor the General Agreement on Tarrifs and Trade, established a level playing field. The problem is that for much of its history the players on that playing field were anything but equal. The competition was like one between a Professional Football team and a pee wee team made up of 5 year olds. Developing economies couldn’t really compete with the US and Europe. And the few fields they could compete in, like agriculture, were usually left out of WTO negotiation.
What is good about the WTO is a promise. It is a promise that even though the world players are unbalanced, the decisions effecting trade are at least going to be made together, transparently, and that as their share of trade increases, emerging markets will begin to have a say.
Over the past decade that has finally started to happen. Countries like Brazil have been able to use the WTO to hold the United States accountable for trade subsidies that violate their agreements. The current round of WTO negotiations, known as the Doha round, has been held up by emerging markets. Countries like China and India are insisting that Agricultural trade be liberalized before rich world concerns like intellectual property and services are dealt with further.
The rich world’s response is the Transatlantic Trade and Investment Partnership or TTIP. With this exclusive free trade agreement the US and Europe want to violate the promise that makes the WTO worthwhile. The US and the EU can’t completely control the WTO anymore, so they are taking their ball and going home. After selling everyone on making the sacrifices necessary to join one club, they are moving on to found their own club. The delay in WTO negotiations has led to a lot of problematic bi-lateral and multi-lateral trade deals. The TTIP is the worst. It does not abandon the WTO, but it turns it into a scam. Going forward with TTIP seriously injures the valuable principle that trade decisions should be made universally. It also gives birth to an Us v. Them mentality that will not do anybody any good in the long run. TTIP is a terrible idea.
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