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Home Publications Blogs Beat the Press The Deals are "Trade" Pacts, Not "Free Trade" Pacts

The Deals are "Trade" Pacts, Not "Free Trade" Pacts

Thursday, 16 June 2011 06:45

If you are an advocate pushing for the new trade pacts with South Korea, Colombia, and Panama you might call them "free trade" pacts. The idea of "free trade" has considerable resonance with an important segment of the public (i.e. business people). However, the deals do not free all trade (don't expect to see a flood of Korean doctors into the United States) and they actually increase many barriers, most importantly by strengthening intellectual property protection. So, when the Post calls the deals "free trade" pacts it is acting in its role as an advocate, not as a newspaper.

The Post also tells readers:

"The Korea deal is expected to generate more than $10 billion in additional annual sales for U.S. companies."

Actually people hold expectations. The Post doesn't tell us which people. This is important, since many people's expectations prove to be unjustified. For example, many "expected" NAFTA to lead to a U.S. trade surplus with Mexico, creating hundreds of thousands of jobs. These expectations proved to be wrong. It would be interesting to know if the same people are the ones who expect $10 billion in additional annual sales from the Korea trade pact.

Comments (3)Add Comment
written by izzatzo, June 16, 2011 7:27

"The Korea deal is expected to generate more than $10 billion in additional annual sales economic rent for U.S. companies with no increase in total jobs."
I agree they are not free trade
written by Bill H, June 16, 2011 10:14
But what the heck does the practice of medicine for a local population, which is what a doctor does, have to do with trade?

A free trade agreement would permit the exchange of products, but not jobs. These agreements transfer jobs. There is much to discuss about that, but you're talking about doctors.
Free Trade
written by Jeff Z, June 16, 2011 11:30
Simply put, capital can move around the globe at the touch of a button. Labor can't do that. Technically, neither can physical products, since it takes time and effort to move stuff from one place to another.

If we were serious about free trade in medicine, then that would require reforms of immigration law, and licensing practices on the part of the AMA, to allow foreign doctors to practice medicine in the U.S. Or set up worldwide standards so that doctors they could ply their trade anywhere.

Because labor involves human beings, it is going to require special and different rules.

Dean is right. What these 'free trade' deals really mean is that some companies are free to offer goods anywhere, to move production anywhere, and laborers are free to determine who gets to give them the shaft.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.