Canada to Join EU Free Trade Zone?
If so, great for them. The more free trade in the world, the better:
Canadian and European officials say they plan to begin negotiating a massive agreement to integrate Canada’s economy with the 27 nations of the European Union, with preliminary talks to be launched at an Oct. 17 summit in Montreal three days after the federal election.
Trade Minister Michael Fortier and his staff have been engaged for the past two months with EU Trade Commissioner Peter Mandelson and the representatives of European governments in an effort to begin what a senior EU official involved in the talks described in an interview yesterday as “deep economic integration negotiations.”
If successful, Canada would be the first developed nation to have open trade relations with the EU, which has completely open borders between its members but imposes steep trade and investment barriers on outsiders…
A pact with the United States would be politically impossible in Europe, senior European Commission officials said.
I would have said that changing the last statement would be a great goal for an Obama administration that wants to make Europe love us again (did they ever?) But he has made clear that trade does not count in his definition of good relations, and in fact has already committed to initiating trade wars against our neighbors Mexico and Canada.
What Goes Around, Comes Around
For years, protectionists in this country have tried to argue that "oh, I am really for free trade, but to be fair we must impose environmental and labor standards on our trading partners." Well, now Europe is proposing doing exactly the same to us:
The European Commission is considering proposing a carbon dioxide tariff on imports from states failing to tackle greenhouse gas emissions, while also considering a toughening-up of the EU's own emission trading system....
The plan reflects pressure by French president Nicolas Sarkozy who argued in October that Europe should "examine the option of taxing products imported from countries that do not respect the Kyoto Protocol," referring to the 1997 international agreement on fighting climate change.
Mr Sarkozy urged Brussels to discuss the implications of "unfair competition" by firms outside the EU, which do not have to abide by strict European standards on CO2 emissions.
This letter from Don Boudreaux seems relevant:
Hillary Clinton needs a language lesson. She favors only trade that is found by government to "benefit our workers and our economy" and that promotes "rising standards of living across the world" ("Full Transcript: Hillary Clinton Interview," December 3; my emphasis). She then asserts that "There is nothing protectionist about this."
Protectionism exists whenever, wherever, and whyever government artificially raises its citizens' costs of buying imports. Protectionism has forever rested on the false notion that government officials know best how consumers should spend their money. And it attempts today to hide its ugly face behind the smiling mask of allegedly noble intentions, such as those mouthed by Sen. Clinton.
The title of his post is "The Moment Somone Must Explain that He or She Isn't a Protectionist, You Can Bank on that Person Being a Protectionist."
Where Have All the Anti-Globalization Rioters Gone?
It has been pretty quiet on the globalization front. I saw today that Don Boudreaux released his new book on globalization, and I thought to myself -- wow, that was a charged issue a few years ago, what happened to it? I was in Seattle for the riots and it was a big deal. Well, in part, I guess the feistiness of the anti-globalization types may have gone down because they are winning -- protectionism is advancing today on many fronts when for a while we had it against the ropes. In large part this is because the US has virtually abandoned its leadership role on free trade.
However, there is another reason we don't hear much from the anti-globalization folks: Because they have all joined the global warming movement, deciding that the environmental packaging is a better way to sell socialism and protectionism:
The Social Democrats are calling for sanctions on energy-intensive U.S. export products if the Bush administration continues to obstruct international agreements on climate protection, the party’s leading environmental expert said Tuesday.
The move, after the United Nations climate conference last week in Bali, Indonesia, has won strong support from the Greens and other leftist groupings in the European Parliament. Those factions will renew their bid to impose such levies when the Parliament reconvenes next month.
I Wondered About This: China as Scapegoat
I haven't really blogged about the Chinese toy recalls, not knowing much about them. However, my first thought on hearing the problems described was, "aren't those design defects, not manufacturing issues?" I had a strong sense that populist distrust of trade with China was being used as a fig leaf to cover Mattel's screw-ups. Several of the recalls were for parts such as magnets that were small and could be swallowed. There was no implication that the magnets fell off because they were attached or manufactured poorly, they were just a bad design.
I have worked in a number of large manufacturing companies that have plants and suppliers in China. It was out responsibility to make sure the product that got to the customer was correct. There is no way we would source a product from an independent foreign company, and have the product delivered straight to stores without inspection, unless we were absolutely damn certain about the company's processes, up to and including having full-time manufacturing people at their plant.
Well, I might have been on to something (WSJ$)
Toymaker Mattel issued an extraordinary apology to China on Friday over the recall of Chinese-made toys, saying most of the items were defective because of Mattel's design flaws rather than faulty manufacturing. The company added that it had recalled more lead-tainted Chinese toys than was justified....
Mattel ordered three high-profile recalls this summer of millions of Chinese-made toys, including Barbie doll accessories and toy cars, because of concerns about lead paint and tiny magnets that could be swallowed. The "vast majority of those products that were recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in China's manufacturers," Mr. Debrowski said. Lead-tainted toys accounted for only a small percentage of all toys recalled, he said. "We understand and appreciate deeply the issues that this has caused for the reputation of Chinese manufacturers," he said.
Mattel said in a statement its lead-related recalls were "overly inclusive, including toys that may not have had lead in paint in excess of the U.S. standards. The follow-up inspections also confirmed that part of the recalled toys complied with the U.S. standards."
The other interesting thing here is just how important Mattel's relationship with China is, to have even issued this apology at all. For such a massive and high-profile recall, Mattel came off very well through the succesful strategy of blaming China. I know that parents I have heard talk about the recall blame China and have increased fear of Chinese products. So it is interesting to see that Mattel feels the need to abandon this so far winning PR strategy.
Stop Right There or I Will Shoot Myself!
It has become a Capitol Hill ritual: A few senators, always including the New York Democrat Charles E. Schumer, introduce a bill to punish China if its leaders do not raise the value of the nation's currency. Photos are taken, news releases are issued, but nothing really happens.
This year, the atmosphere on the Hill is markedly different. Powerful senators from both sides of the aisle, Schumer among them, are pushing two bills that threaten retaliatory action if China does not budge. For the first time, the idea is gaining broad support. The bills are moving swiftly through the Senate, and many analysts expect one will pass.
If the bill's authors are successful, the effect at a minimum will be to raise consumer prices in the United States and lower them for Chinese citizens. So we are going to "punish" China by making our own citizens pay higher prices. How does this make any sense? Also, in the process, let's make sure we reduce the capacity of China to buy US government debt, which to this point has been reducing the cost of the Federal budget deficit.
Tyler Cowen argues this is the best we can expect -- the worst is a substantial debalization in the Chinese economy... and ours. I wrote much more on continuing to allow the Chinese government to subsidize American consumers here.