Trade Agreements in Principle: Good or Bad

 

TRADE AGREEMENTS IN PRINCIPLEWith the withdrawal of the U.S. from further discussion of the Trans Pacific Partnership trade agreement it behooves constitutional conservatives and advocates of free trade between nations to address the subject of international trade agreements and whether they are proper in principle and if so then to what extent.

The TPP in General

The TPP is a massive agreement[1] consisting of thousands of pages of text. It would affect 11 signatory nations, 6 with whom we already have trade agreements. It provides for numerous trade barrier removals but also codifies certain barriers and erects certain trade barriers against non-signatory nations. It contains complex and troubling rules that would affect internally the rights of Americans in environmental and business benefit areas. Many of those areas affected are generally not regulated by the US federal government or by the federal government alone and would, if introduced individually in the U.S. Congress, be rejected as Congressional over reach. The volume of the agreement alone makes it almost beyond the comprehension of any legislator that was not an expert in international trade, and business in general and did not have full time to devote to vetting the agreement itself. Its duration exceeds that of terms of any US elected official individually and by bloc. To say the least the TPP is or was problematic. The withdrawal of the United States may or may not be the death knell of the TPP. It may go forward with 11 signatories and it may create a trading bloc that operates to the detriment of American individual businesses. Still should we join into an agreement that violates the basics of free trade and of American sovereignty in any way just in order to not be the target of those unprincipled stipulations?

Trade Agreements in General

In order to make a pronouncement on whether a specific Trade Agreement proposal such as the TPP is proper one would need to determine practices and principles that can and cannot be part of a trade agreement whether it is between two parties or a multitude of parties. Even before that though, one must decide if trade agreements are ever proper given the traditional basis of U.S. governance. It is my opinion that trade agreements between nations that:

  • share mutual respect for rights of individuals
  • that have fairly elected representative governments
  • that do not allow for the impressment of labor by governments in government run commerce or into favored private endeavors
  • that set forth all the terms of the agreement expressly in the agreement with ratification by the various national assemblies
  • that do not reassign any national sovereignty
  • that do not purport to target any other nation or faction for exclusion from the world marketplace by expanded protectionist borders

are a valid and healthy segment of free trade. In a little more detail:

Trade Agreements should only be between nations that have a representative government fairly elected.

Governments that hold their population captive by inherited rule, by one party rule, by collective compulsion etc should not be considered equals in any trade agreements that bind the various populations of nations. This would preclude making trade agreements with communist nations or nations that do not have a voluntary system of suffrage. It would preclude nations that recognize the division of citizens into classes or castes that limits their access to equal representation in the economy or the government. It would preclude making trade arrangements with nations that recognized impressed or otherwise involuntarily bound labor for any reason. The reason for this condition is that trade agreements actually bind individuals rather than governments. Those agreements are not agreements on the placement of armies or the stockpiling of weapons or on the drawing of borders. Those agreements are not on things that are only the purview of national governments but are in fact binding the individual citizens of the participant nations in their most basic economic activities. Therefore any agreement with a national government that is not representative and directly responsive to the populace cannot be morally or practically binding.

They should only be between nations that agree to honor intellectual property rights and prosecute their own nationals that violate patents and other intellectual property rights.

Nations that do not recognize patents as a whole or which refuse to prosecute patent violations or which limit access to the patenting procedure to a certain race, class or political faction cannot fairly compete with nations that do recognize and enforce the grant of limited term patents. A huge part of the advantage of free trade is the encouragement to find practical, innovative solutions to meet human needs. It has been proven that the ability to protect innovation for at least a period of time that allows for the recouping of research and development is vital to encouraging and facilitating such R & D investment. Entering into a trade agreement with nations that will, in order to steal competitive advantage, allow its citizens to routinely violate intellectual property laws is a transfer of wealth without effort strategy rather than a trade agreement and must not be imposed upon the citizens of those nations that do honor intellectual property rights.

Trade agreements should be between nations directly and all current and future terms should be subject to the legislature of those nations. There should never be a separate entity comprised of appointed or elected individuals that make new stipulations or punish transgressions independently.

Trade agreements should never create and endow an extra legislative entity that can bind the citizens of the various participating nations in revisions or extra judicial enforcement of trade conditions. All trade agreements must have all the terms approved by the national assemblies of the participating nations prior to the initiation. Those terms should never in any degree reassign national sovereignty to a board, commission or other entity. Trade agreements should never leave any terms vague or open to extra legislative setting at future dates or as need arises. The United States Constitution, as part of the federalist compromise, elevates international treaty agreements above any US domestic law. This is a risky compromise created to solidify the position of one, unified voice in dealing with foreign nations. It achieves that purpose quite well but unfortunately it relies upon the US Congress to never allow a loophole in which onerous regulation or restrictions upon American individuals can be imposed via international treaty that would not or could not be agreed upon in the individual states where the venue is proper. Therefore whether it is via an international body such as the United Nations or a trade agreement there must not be provisions therein that bind individual citizens to regulations that would never be approved directly by the representatives of the various states or by the individuals themselves.

You can’t vet an agreement that can’t be read or understood by those vetting it.

A very practical assurance that American sovereignty is not transferred or bypassed is to make certain that the trade agreement is easily understood and not of such volume and complexity that those ratifying cannot read and comprehend it. In the Federalist 62, James Madison writes [2]:

“It poisons the blessing of liberty itself. It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?”

A Trade Agreement that is too complex, that is the product of years of authorship may be too voluminous, too obtuse to be understood by those tasked with ratifying same. In that case it cannot safely be agreed to. Another practical consideration in the drafting of complex agreements is addressed in Federalist 78 by Alexander Hamilton when he addressed the longer terms of judges [3]:

“There is yet a further and a weightier reason for the permanency of the judicial offices, which is deducible from the nature of the qualifications they require. It has been frequently remarked, with great propriety, that a voluminous code of laws is one of the inconveniences necessarily connected with the advantages of a free government. To avoid an arbitrary discretion in the courts, it is indispensable that they should be bound down by strict rules and precedents, which serve to define and point out their duty in every particular case that comes before them; and it will readily be conceived from the variety of controversies which grow out of the folly and wickedness of mankind, that the records of those precedents must unavoidably swell to a very considerable bulk, and must demand long and laborious study to acquire a competent knowledge of them. Hence it is, that there can be but few men in the society who will have sufficient skill in the laws to qualify them for the stations of judges. And making the proper deductions for the ordinary depravity of human nature, the number must be still smaller of those who unite the requisite integrity with the requisite knowledge. These considerations apprise us, that the government can have no great option between fit character; and that a temporary duration in office, which would naturally discourage such characters from quitting a lucrative line of practice to accept a seat on the bench, would have a tendency to throw the administration of justice into hands less able, and less well qualified, to conduct it with utility and dignity. In the present circumstances of this country, and in those in which it is likely to be for a long time to come, the disadvantages on this score would be greater than they may at first sight appear; but it must be confessed, that they are far inferior to those which present themselves under the other aspects of the subject.”

The gist of this text is that sometimes laws must in fact be voluminous in order to be fair. This requires that they be administered by people who have years to study and understand them. An international trade agreement that is so voluminous, so complex would require that those who administer it have years of uninterrupted service to develop and implement fair and equitable administration. In a world in which various nations must have various limited terms of office in order to reflect the changing political will this is not only not practical to develop but more dangerous than advantageous.

It seems to me that trade agreements are not automatically counter to the principles of free trade but must be:
  • Simple and easily understood
  • Between governments of free people

And must never assign American sovereignty to an external body or create restrictions upon the citizens of this country that are not within the concept of voluntary assignment and voted upon by the proper representatives of the individuals. Furthermore, if a trade agreement creates trade barriers instead of reduces or eliminates them then in principle it should be rejected until cured of that flaw.

In Conclusion, the TPP is not a proper Trade Agreement

The TPP, by virtue of its very length and convoluted nature should never have been considered by the United States. This is not to say that the U.S. cannot or should not consider entering into future trade agreements that are easier vetted and serve to advance the causes of honest free trade instead of creating protectionist blocks. Perhaps individual trade agreements with each of the 12 signatories would be less intrusive and obtuse as well as easier vacated if the need to do so because of the other party’s unwillingness to abide by the terms arose. In fact multi party agreements often sow the seed of coalition forming and eventual war much as did entangling alliances in the first world war. Relations may seem to be better maintained by multi party intervention but history teaches us that multiple parties in a two party issue more often facilitates the spread of conflict and discord than the solution of conflict and discord. The United States should not entertain nor engage in years long drafting of multi party treaties that result in voluminous, and dangerously complex agreements. It should also not engage in trade negotiations that as a result create or extend the borders of trade barriers rather than lowering them. [1] Office of the United States Trade Representative “TPP Full Text” 12/05/2015 http://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partenrship/TPP-Full-Text [2] https://www.congress.gov/resources/display/content/The+Federalist+Papers [3] https://www.congress.gov/resources/display/content/The+Federalist+Papers

Updated: May 12, 2017 — 11:03 am
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