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OpenMarket: Trade and International

  • Tariffs Invite Corruption

    September 6, 2018

    The Commerce Department is offering exemptions to President Trump’s recent steel and aluminum tariffs. More than 2,000 companies have applied. That means that there are Commerce Department employees with the power to decide, in some cases, whether a company can continue to exist. Even if there is no existential threat to a company, a bureaucrat’s discretion could decide whether or not a company will be able to retain all of its workers, keep prices low, make a profit or a loss, or remain competitive at home and abroad.

  • U.S. Should Re-engage with World Trade Organization for Everyone's Sake

    September 5, 2018

    Last week, President Trump threatened to pull out of the World Trade Organization, which he called “the single worst trade deal ever made.” 

  • Will New NAFTA Be More Protectionist or Less?

    August 31, 2018

    This week has seen some swift movement in the talks surrounding the renegotiation of the North American Free Trade Agreement (NAFTA). On Monday, the President held a join phone press conference with the President of Mexico announcing agreement on a new U.S.-Mexico Free Trade Agreement. While President Trump seemed satisfied to leave it at that, with the possibility of Canada joining, President Pena Nieto stressed that he regarded it as essential for Canada to join to make it a new NAFTA.

  • Trade Is as Old as Humanity

    August 31, 2018

    Archaeologists have uncovered evidence of long-distance trade going as far back as 200,000 years ago. The artifacts are mainly things such as obsidian tools that are relatively imprevious to the ravages of time. In fact, such finds can determine economic health through history. After the fall of the Roman Empire, long-distance artifacts such as foreign coins, papyrus, and oil lamps suddenly disappear from Europe’s archaeological sites. We call this low-trade period the Dark Ages.

  • Trade Restrictions Will Not Improve National Security

    August 30, 2018

    One of the most persuasive arguments trade protectionists use is the national security argument. It serves as a “get out of jail free” card with many conservatives, and progressives will also often let slide policies with national security implications. When it comes to trade, it turns out that not only do trade barriers fail to improve national security, they actually hurt it in the long run—as Iain Murray and I briefly spell out why in our recent study, “Traders of the Lost Ark.”

  • Australian Government Calls for Interchange Fee Ban

    August 27, 2018

    One would expect that years of failing policy would force policymakers to reconsider the wisdom of their actions. But not for the Australian Productivity Commission, the Australian government’s think tank, which recently advocated for doubling down on a decades-old policy of price controls for payment cards.

  • Brexit Britain Provides Opportunity for New Style of U.S. Trade Agreement

    August 27, 2018

    Despite its reliance on raising tariff barriers as a weapon in trade negotiation, the U.S. will soon have the opportunity to negotiate a new free trade deal based around some of the principles Ryan Young and I outline in our recent study “Traders of the Lost Ark.” Assuming it does not arrange to stay within the European Union’s customs union, the UK will regain full power to negotiate trade deals when it leaves the EU in March 2019. The administration should jump at the chance to create a new model for future trade deals.

  • Trade Made Renaissance Art Possible

    August 24, 2018

    Trade and specialization make all kinds of life-enriching innovations possible. In fact, Italian Renaissance art was one of them, a gift that continues to inspire us five centuries later. Re-opening trade with the Middle and Far East is what allowed Europe to climb out of the Middle Ages and into the Renaissance. Venice, in particular, was a hub of trading activity, as Peter Frankopan points out in his 2016 book The Silk Roads: A New History of the World.

  • 'Infant Industry' Argument Does Not Justify Trade Barriers

    August 22, 2018

    Most startups fail. The conventional wisdom is that about 90 percent of businesses fail within five years of their founding. For companies making new types of products in brand-new industries, maybe protective tariffs or other trade barriers can give them a little bit of a breather from foreign competition until they become established enough to compete on their own. This is the “infant industry” argument, and was first popularized by no less than John Stuart Mill.

  • World Trade: The Special Case of China

    August 20, 2018

    While free trade with all nations is the avowed goal of both free traders (as we outline in our paper, Traders of the Lost Ark) and the current administration, it has to be acknowledged that China is a special case. China has repeatedly been a bad actor in trade, breaking international trading norms in several respects. Something has to be done – but what?

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