Advancing a Free Society

The “Fair” Trade Delusion

Wednesday, May 25, 2011

Why won’t the president move forward on bilateral free trade agreements?

In the sprawling field of international relations, few debates are as persistent and acrimonious as the one between the advocates of "free trade" and "fair trade." The fair trade position takes the view that a wide range of tariffs, duties, and other conditions may be used to restrict the flow of goods and services across national or state boundaries. The free trade position, which I heartily endorse, holds that national trade policy should allow goods and services to move fluidly across national borders—just as if those borders did not exist. One way to achieve this end is to sign bilateral free trade accords with other nations, with an eye to reducing tariff barriers and other impediments to the free flow of goods and services.

Right now, the United States has three pending free trade agreements with South Korea, Colombia, and Panama. Signing them just as they are will expand growth and lead to more opportunities for all parties. Although the economics of free trade are straightforward, its politics are not.

Continue reading Richard Epstein at Defining Ideas

(photo credit: Michele Finotto)