Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Sir, Daniel Griswold ("Bilateral deals are no threat to global trade", July 27) raised several valid points in the defence of bilateral trade agreements. However, his suggestion that bilateralism should serve as a template for broader negotiations is mistaken.
Nations, it should be noted, do not negotiate with one another. Some people within one nation negotiate on its behalf with similar people from another nation. In multilateral negotiations, broad interest groups ("exporters" as a block, for instance) are represented. However, when the focus tightens from the multilateral to the bilateral, the breadth of economic representation is sharply reduced. Only that handful of companies concerned with the specialised trade with that nation will invest the resources to join the negotiations. So the mercantilist component of trade grows as the scope of the negotiations is reduced. More important, US non-governmental organisations now insist that trade policy must be subordinated to their agendas. Trade is acceptable if and only if the nations involved meet the environmental, labour, health, human rights, consumer protection and other standards of "right-thinking people".
At Seattle and Doha, the NGOs of the world sought to link trade to various special interest agendas - and failed. The collective voices of the poorer nations recognised the threat and blocked any attempt to delay their economic growth to salve northern liberal consciences. At the bilateral table, however, the moral voices of the developing world are largely absent while the NGO lobby remains breathing down the neck of the US representatives.
So it has been with recent US bilateral agreements. The Jordanian agreement capitulated on a broad array of issues that had been defeated at Doha and Seattle. The more recent Chilean agreement explicitly requires Chile to enforce a swath of international environmental treaties, which the US has elected not to sign (Many developing world nations signed these in symbolic fashion; now they will be enforced by the US prompted by US-based environmental lawyers.)
Mr Griswold is right that "free trade agreements can provide useful templates for broader negotiations" -but he does not ask, "useful for whom?" Legitimising negotiations where anti-trade voices are strong but free-trade voices are weak is no path to freedom and development.