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Free Trade Deals

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Matt reminds us of something we should always keep in mind:

What the textbooks deal with is the question of lowering barriers to the importation of goods. What happens when this idea gets instantiated by actual diplomats is you get treaties with all sorts of provisions, many of which are not covered by the chapter on Ricardo.

Free trade is great, but trade conducted under terms dictated by powerful economic actors is not free. Even industries that benefit from free trade have an incentive to pressure policymakers into playing with the numbers and rules in order to improve their position. Industries that don’t benefit find ways in which they can, usually by imposing bizarre import restrictions. NAFTA is an unreadable document for this reason. Like Matt, I tend to lean toward free trade, but that doesn’t mean that every free trade agreement is one that we should support.

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