Thursday, March 26, 2009

Free trade under fire globally?

In light of recent free-trade developments in Korea — notably the tentative ROK-EU free-trade agreement and the Obama administration "souring" on the ROK-US FTA — it's interesting to note that, according to the New York Times, "protectionism is on the march." The big problem with this is that it's "provoking nasty trade disputes and undermining efforts to plot a coordinated response" to the global financial crisis.

With the lame excuses by the Obama administration for not getting on board with the FTA — South Korea doesn't buy enough American cars, so as punishment, we're not going to pass an agreement that would lead to them buying more cars — it's easy to see how this kind of thing is playing out when politicians feel their constituents' jobs are threatened. After all, aggregate blame for job loss is usually more potent than aggregate gratitude for job creation.

The intro to the article provides the gist:
After repeated pledges by world leaders to avoid erecting trade barriers, protectionism is on the march, provoking nasty trade disputes and undermining efforts to plot a coordinated response to the deepest global economic downturn since World War II.

In November, President Bush greeted President Nicolas Sarkozy of France at a meeting in which nations backed free trade.
From a looming battle with China over tariffs on carbon-intensive goods to a spat over Mexican trucks using American roads, barriers are going up around the world. As the recession’s grip tightens, these pressures are likely to intensify, several experts said.

The surge in protectionism is casting a shadow over an economic summit meeting of world leaders scheduled for London on April 2. At the last such gathering, in Washington in November, former President George W. Bush persuaded the Group of 20 members to commit to protecting free trade — whatever the pressures caused by faltering economies and lost jobs. The members include industrialized and developing nations, and the European Union.

“No sooner was the G-20 statement issued than it was breached,” said Daniel M. Price, an official in the Bush administration who helped negotiate the agreement. “Instead of just talking about trade liberalization, countries need to take immediate steps to show they mean it.”
That's just the opening, but the details are also interesting, so read the rest on your own.

[above: It's really hard to find or create a picture that encapsulates a theme like the benefits of free trade, so instead, here is a cute picture of adorable kittens in cups. I will not accompany these pictures with a snarky remark about feline-infused liquid medicinals in Korea, because cats are cute and I love them. Cats are superior pets to dogs solely because they are self-cleaning. Still, the above usage of cats is quite insanitary and I wouldn't recommend it.]

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