Trust Me, Charlie Brown, by Robert Gore

Voluntary trade occurs when both parties benefit. Why should it matter if the parties are of different nationalities? Assuming the trade was of a legal product or service, both nations’ governments should be happy with the transaction, since their citizens have benefitted (not that governments generally care about that). However, governments directly and indirectly influence the terms of trade, often preventing trade from happening at all. The US has three international trade agreements pending—the Trans Pacific Partnership, the Transatlantic Trade and Investment Partnership, and the Trade in Services Agreement—the terms of which are presently secret.

If two or more nations want to adopt a free trade policy, it can be accomplished with an agreement that says, in effect: The undersigned nations hereby agree to eliminate all tariffs, quotas, duties, and other impediments to trade in goods and services among themselves. That’s one sentence. Another sentence might be necessary to allow inspection of imports so that they conform with local laws that govern domestic producers of those goods and services. There you have it—a free trade pact. Like the US Bill of Rights, a true trade agreement is negative; it prohibits its signatory governments from impeding trade. Such a prohibition can and should be succinct, like the first ten amendments.

So why did the three agreements take years to draft, why are they collectively thousands of pages, and why do their contents have to remain secret? Because they probably have little to do with free trade. The countries that have the most to gain from international free trade are those that most closely approach domestic free trade, or capitalism. The statist panoply of regulation, taxes, sovereign debt, coerced income redistribution, government-provided goods and services, fiat money, interest rate suppression, and currency devaluation—all the things modern governments and their central banks do to their economies and people—cripple competitiveness. Free trade exposes competitive weakness, which casts suspicion on the motives of the governments and corporate string-pullers—all statist to the core—negotiating the current agreements.

Statist countries that have handicapped themselves in global trade competition would logically seek to impose those handicaps on other nations, which undoubtedly explains many pages in the agreements under consideration. The code word is harmonization: movement towards uniformity of regulations, tax rates, labor, intellectual property, and environmental laws, government-provided pension, medical, and educational benefits, and central bank policies that have hindered rather than promoted the economic competition that is the essence of true free trade. Look no further than the EU, supposedly a free trade union, which for years made Ireland a pariah for keeping its corporate tax rates lower than the rest of Europe’s to attract corporations.

Who will enforce “harmonization?” The EU is the template; it will be enforced by supranational government. Amidst the thousands of pages one would expect to find dispute resolution mechanisms that will be, by definition supranational. There are reports of sovereignty-killing arbitration panels for disputes between corporations and governments. It wouldn’t be a surprise if there were some sort of supranational powers granted to fulfill legislative and executive functions as well. Supranational governance doubles up on a bad idea—command and control—that is in its death throes at the nation-state level. Centralization was the leitmotif of the twentieth century; decentralization and individual empowerment will be the impetus for the twenty-first. Individual governments have been standing athwart those forces, yelling “Stop!” Supranational institutions will act as massive roadblocks.

Ultimately, the future will will not be stopped, but while we wait, supranational governance opens up new avenues for cronyism, influence peddling, rent seeking, and revolving doors. Judging by partial disclosures from Wikileaks, there are dispensations to favored companies and industries, notably pharmaceuticals, woven into the agreements. Over time, supranational regulatory capture will set in. That’s what happens to governing bodies, as those who have the most at stake “invest” in favorable outcomes. Supranational bodies will be even more remote and impervious to reform than national governments.

SLL may be completely wrong about the contents of the three agreements; they are, after all, secret, and will be to the American public until Congress passes Trade Promotion Authority (TPA), or “fast track” legislation. One would think that the three agreements are treaties, and are thus subject to Article II, Section 2 of the Constitution’s requirement that treaties be made by the President with the advice and consent—a two-third’s vote—of the Senate. However, the practice has evolved such that as long as the words “Free Trade” are slapped on a treaty, it’s not really a treaty, and with the requisite TPA, it is exempted from amendment and only requires a majority vote by both houses of Congress to pass. At this point, proponents of the agreements are asking the public to trust them and pass TPA, which is when we’ll get to see what’s in the agreements and Congress will get its say, although that say will not include the power to amend. Undoubtedly the number of Congresspeople who will read all three agreements will be about as numerous as those who read Obamacare before it passed.

Trust them—aye, there’s the rub. They’re already using the “free trade” label on the legislation to cast anyone questioning the agreements or opposing TPA on procedural or Constitutional grounds as ignorant, retrograde mercantilists and protectionists, although few know what’s in the agreements. Like the last six or seven wars, like domestic surveillance, like bailouts, like unprecedented central bank policies and debt expansion, and like Obamacare, we are to trust the elites, they know best. Except those wars didn’t work out too well, domestic surveillance has shredded our civil liberties without preventing any terrorist acts, bailouts left the Too Big To Fail banks even bigger and more failure-prone, debt and the Federal Reserve have produced a recovery that’s scarcely worth the name, and Obamacare is an unmitigated disaster. In other words, everyone who didn’t trust the elites, who asked questions and received only non-answers and bland assurances but kept asking questions, who protested, was ultimately vindicated. Trust them indeed! Charlie Brown had a better chance with Lucy and the football.

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