Sunday , December 9 2018
Home / EconLog Library / Trump’s Shocking Trade Preferences

Trump’s Shocking Trade Preferences

Summary:
I knew that  DonaldTrump has long been suspicious of international trade and has worn his uninformed anti-trade preferences as a badge of honor. I’ve argued with pro-Trump friends that his proposed replacement for NAFTA is good only because it isn’t as bad on trade as I feared it would be: it will, if passed, reduce gains from trade for both sides, but not as much as I had feared. So none of what I saw come out of the renegotiation of NAFTA came as a surprise. None, that is, until this: Stripping out the investor dispute-settlement provision was an American demand. U.S. trade rep Robert Lighthizer and Mr. Trump figured that fewer Americans would invest in Mexico if contract disputes were settled in Mexico’s notoriously corrupt courts. After U.S. business

Topics:
David Henderson considers the following as important:

This could be interesting, too:

Scott Sumner writes Recession risk and the circularity problem

Pierre Lemieux writes Consumer Sovereignty: A Response to Greg Autry

Pierre Lemieux writes Post Scriptum on Steel Tariffs

Pierre Lemieux writes Does the Chicken Tax Imply Prices Lower for Domestic than for Foreign Pickups?

I knew that  DonaldTrump has long been suspicious of international trade and has worn his uninformed anti-trade preferences as a badge of honor. I’ve argued with pro-Trump friends that his proposed replacement for NAFTA is good only because it isn’t as bad on trade as I feared it would be: it will, if passed, reduce gains from trade for both sides, but not as much as I had feared.

So none of what I saw come out of the renegotiation of NAFTA came as a surprise.

None, that is, until this:

Stripping out the investor dispute-settlement provision was an American demand. U.S. trade rep Robert Lighthizer and Mr. Trump figured that fewer Americans would invest in Mexico if contract disputes were settled in Mexico’s notoriously corrupt courts. After U.S. business complaints, the revised agreement retains current protections for the likes of oil and gas, telecom and power generation. But that leaves banks, retailers and countless others more vulnerable to regulatory assault from the left-wing populists who will soon be running Mexico. (italics in original)

This paragraph is from “Bad Trade Timing,” the Wall Street Journal‘s editorial that appeared today.

As the Journal editors conclude:

New Nafta may be the first trade agreement in history that is designed to encourage less trade and investment across borders. (italics mine)

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

Leave a Reply

Your email address will not be published. Required fields are marked *