Sunday, July 1, 2012

Unintentional Barriers to Trade

I am definitely not any sort of expert on politics. I don't know a whole lot about the details that make our government run, and I know even less about any other country's government. That being said, I think that politics are the most hazardous unintentional barrier to trade in this country.

Politics and trade are strongly interconnected. It's the government, after all, that makes the policies regarding trade, and creates trade agreements with other countries. Politics are sometimes used deliberately to influence trade, and trade is frequently used to influence politics. With all of that going on, it's hard to separate the two, no matter what country you look at. I think the United States, however, has some unusual circumstances that create a whole new set of problems.

The political system is the U.S. is, to put it simply, a mess. The bipartisan arrangement means that the country is fighting against itself every 4 or 8 years. What one group wants to create, the other wants to destroy, and vice versa. In the time of the Great Depression, the Republicans supported protectionism, while the Democrats prefer free trade. Today the reverse is true. Democrats support protectionism, because the labor unions believe it protects jobs, and the Democrats support the labor unions. Furthermore, for the past 20 years, each election has flip-flopped which party held the Presidency. The last time the same party held the office for two different presidents was when the elder George Bush followed Ronald Reagan. What we end up with is trade policy that advocates one idea being passed by one President, only to have it be overturned or limited by new policies when the next group takes power.


The other problem that leads politics to threaten trade is that human beings have the attention spans of mayflies. If a new law or policy doesn't fix something immediately, it must not be any good. This perspective holds true for individuals, and is only amplified when the cause is taken up by companies, large groups and their lobbyists. Take NAFTA, for example. NAFTA was ratified in 1993, just barely 20 years ago, and it's already being attacked from all sides. Some say that it was a horrible idea from the get-go, and has only made things worse for the U.S. Others say it might be a good start, but it simply hasn't done enough. But while 20 years may seem like a long time, economically it's barely an instant. The European Union began its development with the Treaty of Rome, in 1957, almost 40 years before NAFTA came along, and it continues to be adapted and adjusted it to this day.


My point is that people, be they individuals or political forces, don't want to give these sorts of things enough time. I can understand why time is a difficult force for a President. You have at most eight years in which to make your mark on the country, and likely you'll only be judged on what happens when you're actually in office, never mind if the bill you passed causes huge economic growth 15 years later. But that's just part of what's wrong with out political system.


When trade policy is constantly leaning first one way and then another, it never really has a chance to make a proper impact. I think the political squabbling in this country is as much to blame for our current economic situation as anything else, though I certainly don't have anything concrete on which to base that. If I was able to create a policy to lessen the damage the politics do to trade in the United States, it would be something that prevented any trade policy from being messed with for a certain amount of time (barring emergencies like war and such). If the government was forced to give a policy a chance before throwing barriers down in front of it, it might actually improve things. Even if the policy turned out to have problems, time would give us a chance to learn from it, and maybe the next policy would do better. Right now, the political parties support different types of trade for political reasons. But if trade law actually had a chance to do what it's meant to, and people could really look at and analyze the results, the government might start passing laws for no better reason than to help improve the nation's welfare. Imagine that.

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