Tuesday, 31 January 2017

The rise of know-nothingism

One of the reasons stated by Trump for dropping TPP is that it contains a number of measures that threaten US jobs and surrenders too much US sovereignty over domestic policy-making. Except that these such trade deals are aimed specifically at eliminating unfair competition. How can your shipping industry compete if Filipino seafarers are operating on $3 an hour? That is why these trade deals give effect to International Labour Organisation conventions on minimum wage. It is a means by which a signatory state can bring complaints against other members.

Moreover, the insistence on a level of qualification in trades ensures that the industry is not open to abuse by what are effectively slave drivers. Crew abandonment is a significant issue in global shipping. They use a crew for a single voyage then dump them without pay.

These agreements actually serve as a means of facilitating protectionism to ensure a level playing field rather than a misplaced sense of commercial advantage. Withdrawing from them effectively means there is no framework for trade disputes. The sovereignty argument is bogus since all modern treaties and agreements have unilateral safeguard measures.

It would seem that the trend is moving away from a global rules based order in favour of bilateralism, unilateralism and a return to undeclared trade wars.

Now you can argue that "protectionism is baaaad m'kay", but without an agreement in baseline regulation you are pretty much facilitating a black market in labour and consequently trade in illicit goods - from fraudulent food to fake medicines - all of which have expensive externalities. It also takes waste management out of the regulated sphere leading to environmental problems.

This is why we have a complex and sophisticated system of regulation - which is simplistically characterised by conservatives as "meddlesome red tape". Free market conservatives fall back on the traditional dogma that those working in governance are not part of the productive economy. This overlooks the fact that regulatory innovation eliminates red tape and delays at borders thus increasing the productivity of supply chains. As much as an unregulated free-for-all is messy, it is also expensive for business.

Underlying all this is the conservative desire for the world to be far less complicated than it is - to go back to a time of imperial weights and measures and British jam. It wants to wind the clock back on globalisation and return to the heady days of colonial mercantilism. This underpins much of the popular Brexit thinking. Nineteenth century ideas in an internet world.

In that regard, Donald Trump is a fellow traveller, It's why Brexit speaks to him on his level. More harmful than any executive order is the know-nothingism that drives his knee-jerk policy-making which is in effect a declaration of war on the order established by GATT and the WTO. It may well bring about a new era in world trade, but not a pretty one and not one the masses can win from. Trade wars make everyone poorer. For that reason it is essential that the UK keeps the USA at arms length. You can be a global Britain or you can be Atlanticist. You cannot be both.

If Brexit ultimately delivers on the globalist rhetoric then it is a journey worth making, but if we throw our lot in with an authoritarian issue illiterate ape then we stand to destroy all the potential of leaving the EU. If you thought it was bad being run by remote technocrats, wait until the morons are let loose.

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