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July 31, 2008

Why Weren't Interest Groups in Favor of Freer Trade Mobilized?

Paul Krugman meditates on the collapse of the Doha Round:

Dead Doha - Paul Krugman: It’s over — which is neither a surprise nor a catastrophe. Trade negotiations aren’t driven by economists’ calculations of welfare gains; they’re driven by enlightened mercantilism, what has come to be known as GATT-think. If trade negotiators want to take on well-entrenched interest groups, they have to find countervailing interest groups with an interest in liberalization. That never happened in this round; instead, we had a rather pathetic attempt to cast trade negotiations as, yes, part of the Global War on Terror ™. No surprise, then, that the thing didn’t work. Meanwhile, existing agreements stand. This isn’t Smoot-Hawley; it isn’t even the 2002 Bush steel tariff. Life, and trade, will go on.

Me, I remember Glenn Hubbard, Larry Lindsey, Greg Mankiw, and company all saying that Bush had to impose his steel tariffs in 2002 as a price for getting fast-track authority so that he could successfully complete... the Doha Round.

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Be as flippant as you want DeLong, but realize this:
The 201 Steel Tariffs are cake compared to what your Party will institute.
You damn well know this, but you believe the ends justify the means.

What do you believe?
You can control the argument.
I say, show me the money!
You will be pushed aside in a New York minute.
You are either deluded or you just don’t care.

You have probably been given some kind of assurance.
Good luck in collecting on that promise.

I do know this:
Your name and reputation will forever be tied to the new trade policy.
Hope it works out well for you.

Robert Zoellick made trade negotiations part of the Global War on Terror almost before the dust had cleared at the World Trade Center.

Please excuse the self-advertisement, but I had fun taking him apart then. (Click on name for article.) I especially enjoyed writing the phrase "Chomsky-Zoellick school". Google tells me no one else has had the nerve since.

Want freer trade? Repeal TRIPS and the WIPO Copyright Treaty. "Intellectual property" is the tariff of the 21st century. It serves the same protectionist role in the global corporate economy that tariffs did in the old national industrial economies.

"Free trade" simply means allowing people to do business anywhere in the world without hindrance, on whatever terms they can negotiate on their own, while assuming all the costs and risks of their own activity. But if there were even the remotest chance of that kind of free trade being adopted as government policy, the Fortune 500 would stage a coup.

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