Tuesday, September 29, 2009

Free-ish trade...

Free trade is no longer seen as a good thing, except for stuff you don't grow or make. An revealing test is upcoming with Ireland's vote on the Lisbon Treaty.  Even by EU standards, this document is a bureaucratic masterpiece, reallocating the power of decision between member states and the Union.  When Ireland rejected the treaty last year, full implementation ground to a halt.

The treaty is vastly comprehensive, but the fear among Irish farmers is competition on ag products from other members and the Global Fear of the Moment: Big Government.
"I don't want to sign something that is going to send my two boys out to war. We're probably fine for our generation but I don't know about theirs."
Her husband, Michael, didn't vote last time but will be supporting the Yes side on Friday, mainly for economic reasons.
He says: "I've no reason to vote No and it's not going to do any harm to the country. Why not give it a shot and see what happens."
The Fianna Fail-Green coalition is so unpopular that farmers, like other voters, don't believe it and want to punish politicians.
And yet at the same time they're frightened of the consequences of voting No and being seen to reject the European Union for a second time in 16 months.
Geraldine Langan, an organic farmer with three acres, from Ballydesmond in Co Kerry in the southwest, didn't vote last time but is reluctantly edging towards a Yes this time.
"Ireland voted No the last time and it puzzles me why we're going back to the polls again and we're more or less being forced to vote Yes," he said.
"What I've picked up in the last little while on it is that it could possibly be in our favour to vote Yes this time because of jobs and keeping in with the European Union."
One poll suggest that farmers will vote by a margin of four to one in favour of Lisbon on Friday.
That is almost certainly an exaggeration, but it does seem as though rural Ireland is moving from a No to a Yes position.
As for the Republic as a whole, we should have a fair indication of what way the country voted by mid-morning Saturday. [More]

In this atmosphere of distrust, negotiating anything is difficult, but the stakes for free trade are high - even higher than another great issue, cap-and-trade.
Yet the real tragedy is that, by exaggerating the threat of global warming, we have awoken the beast of protectionism. There are always forces in society that demand that politicians create more barriers to trade because they cannot compete on an even, fair playing field. Global warming has given them a much stronger voice.
Already, politicians are responding -- and using the fear of global warming to create "green fences" against free trade. The U.S. House has passed the Waxman-Markey climate change bill with clear provisions to impose new trade tariffs on countries that don't agree to emission reductions. Eyes are on the Senate, where John Kerry sees these as "sanctions" against "renegade countries."
French President Nicolas Sarkozy has repeatedly called for a Europe-wide tax on imports from nations whose global warming efforts do not measure up to Europe's. German Chancellor Angela Merkel recently backed the idea.
There is a real and growing prospect of an all-out trade war being waged in the name of climate change.
The struggle to generate international agreement on a carbon deal has created a desire to punish "free riders" who do not sign on to stringent carbon emission reduction targets. But the greater goals seem to be to barricade imports from China and India, to tax companies that outsource, and to go for short-term political benefits, destroying free trade.
This is a massive mistake. Economic models show that the global benefits of even slightly freer trade are in the order of $50 trillion -- 50 times more than we could achieve, in the best of circumstances, with carbon cuts. If trade becomes less free, we could easily lose $50 trillion -- or much more if we really bungle things. Poor nations -- the very countries that will experience the worst of climate damage -- would suffer most. [More]

Lomborg has a strong point.  As leading voice against mitigation of AGW, he could be right about welding two unfortunate political efforts together: unwieldy C&T programs and economy crippling tariff walls.

In fact, I could see some protectionists hold their noses and accept climate change legislation after holding out for industry-specific and (economy-burdening) trade barriers.  Agriculture could be one such sector, both here and abroad. 


Ol James said...

I have heard others and you, Mr. John, talk about being and competing in a Global Market. I wonder about this for one reason. Are we going to take care of our own, and then sell the surplus?? Is this going to be the case in every country. Or, are they just going to sell everything to the likes of China, India, Japan and other richer nations. So that they can hold out for better prices. Also what about contributing to the World Food Bank? Do China, India and others contribute as much as The US?? Well maybe a few questions...
On the C&T. Most Farmers are looking at this like an easy payday. When it's all said and done you are gonna have to be a "Licensed, Certified, Bona-fide Broker". Say they charge an industry $100.00 per ton for a carbon credit. Well the deal will more than likely have to be brokered by an approved of by the government agency. They charge $100.00 and the Farmer may see about $5.00/ton for his effort. Guess who's making the money??, guess who's doing the biggest part of the work?? Dang shur aint the broker. A lot questions remain unanswered about C&T, and not many benefit the Farmer I fear, just gubber-mint, and their friends.

amany said...