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Transatlantic Economic Cooperation - Dull but Important

Interest in transatlantic economic cooperation is hard to sell to the public. That is the conclusion of Philip Whyte at the Centre for European Reform:
If the potential economic gains from deepening the transatlantic economy are marked, why is the TEC’s [Transatlantic Economic Council - Nanne] agenda not better known? The (largely justified) perception that it is dull does not help. Let’s face it: the mutual recognition of GAAP and IFRS accountancy standards, or, for that matter, the transatlantic dimension of the EU’s chemicals directive, are not the sorts of subject that most normal people are inclined to discuss when they kick back and relax after work.
A lot of transatlantic economic cooperation is very detailed work that is hard to render in political terms. The overall direction towards greater liberalisation of trade might be worth talking about. But that political aspect has become murky, hidden behind the details, implicit. That is partially because it has become presumed to be only responsible position by much of the media.

Non-tariff barriers as dealt with by the TEC are a catch-all phrase for regulation that sometimes largely serves to harass imports, sometimes just hasn't been coordinated, but in other cases serves political goals other than rank protectionism. It has become hard to have a sensible debate on the balance of this as well as other trade topics because the only positions that are argued are either an implicit bias in favour of all forms of liberalisation, or the diametrical opposite, which is in favour of protectionism as a goal in itself -- the thereby 'unserious' left.

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Joerg - Atlantic Review on :

This post has been online for two days and nobody commented yet. It seems that you guys share "the (largely justified) perception that it [= transatlantic economic cooperation] is dull"... ;-)

Joe Noory on :

well... it's only dull in the sense that it isn't in a state of crisis. it really IS rather important, since it is the feature of the economic model that has augmented the notion of 'the west' to allow for a quality of life, and not just a set of shared values, ideas, and cultures. Its' level of performance depends on persistently trying to keep the channels open and resisting trade barriers. It also is the great untold story of 3rd world poverty elimination. It's also something that needs to be placed out of the reach of potential manipulation by NGOs representing a small number of people who want to remand it for their social causes and political movements. To say that the proposals of 'anti-globalization' types would have no effect is a fallacy: it would cause mass poverty. The food and oil problems at present are only a taste of what happens when markets are limited or manipulated. To further 'deglobalize' food production would only guarantee a permanent disaster.

Nanne on :

The oil price increase over the last few years has a similar effect to raising tariffs by 6 percentage points, [url=http://www.treehugger.com/files/2008/05/shipping-costs-making-the-world-round.php]according to Jeff Rubin[/url], an economist for CIBC world markets. We should get a lot more local production. That oil price used to be too low in the opinion of environmentalists, because it did not take future scarcity into account (there is [url=http://www.econbrowser.com/archives/2006/10/is_peak_oil_irr.html]good evidence[/url] that this has now changed), and because it did not take negative externalities into account (which it still doesn't). The global trading system has in that sense been free-loading on the future. And we are now starting to pay the real price. As Al Gore said, we have entered into a time of consequences. Antiglobalisation activists used to focus a lot on financial transactions, proposing a Tobin tax (the founding reason for ATTAC, for instance). This gets a bit lost with the focus on violent protestors at G8 summits. But it is looking increasingly sensible as a brake on a system that has become too volatile for its own good.

Joe Noory on :

The thin intellectual backing behind anti-globalization/ anti-mondialisms and their multicontinent headbreaking doesn't actually supposrt what your saying, and it they're in any position to say "I told you so", it's because a broken clock can be right twice a day. Markets should and would have not anticipated a coming shortfall based on their failed and loony narrative, because it was not in the terms that anyone could take seriously. Moreover, markets can't anticipate a reduction in future supply potential when there really isn't one. The basic borblems are these: 1) OPEC is propping up the price by keeping the deliveries just below demand. 2) Much of the oil distilates are priced artificially becuase they're subsidised in places like China, Indonesia, Iran, etc. This removes from the equasion a percentage of consumptuion which doesn't just not adapt to the price, but causes outside players to move business activity to those area and generate a roundabout run on a product. 3) A rising commodity sees money rushing into it, accounting for about 15% of its' inflated pricing. 4) You would be hard pressed to find an environmentalist economist who sees the economy as anything other than an interest, point of reference, or target for their theories about environment. In other words they take on as a matter of some form of virtue a narrow point of view blind to every other feature of human life and activity. Looking at the "Environmental Economist", make the "environmentalist" a General, and see how you feel about the veracity of having that narrow a focus and perspective on it. And while you're at it, see how many people you can kill off with high food prices resulting directly from the cost of energy, and imagine what sort of hideousness the distraction that focussing too much on the environmentalists' interests, world view, and unstated agenda has done.

John in Michigan, USA on :

"It has become hard to have a sensible debate on the balance of this as well as other trade topics because the only positions that are argued are either an implicit bias in favour of all forms of liberalisation, or the diametrical opposite, which is in favour of protectionism as a goal in itself -- the thereby 'unserious' left" I disagree with a premise in this statement. To me, any meaningful debate would include discussion of the fundamental issues -- Is free trade good? Is protectionism good? Etc. What you call an implicit bias towards all forms of liberalization, is in my case a deep conviction. Many argue for free trade because of the economic benefits, which are quite real, and a net positive, although they are not always evenly distributed across an economy. But the better argument for free trade is that speech is free, art is free, and trade should be just as free. There are plenty of times when free speech and expression causes problems, but we pursue them not just for the benefits (better policies, better understanding, less violence) but because they are good in and of themselves. Free trade should be pursued for the same reasons. The 'unserious' left certainly exists, as does the 'unserious' right, but there are serious arguments in favor of free trade or protectionism. I'll let the protectionists say what arguments they prefer, and simply state that all the protectionist arguments I've heard so far, I find unpersuasive. Philip Whyte is correct, technical topics like accounting standards and so on are very dull to non-specialists. There's profound lesson in that: [i]the political process requires an engaged citizenry to function well. Any topic or area that an ordinary citizen would rightly find dull, doesn't belong in politics.[/i]

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