Brexit is an opportunity for more free trade. Ted Bromund writes:
Yesterday, 11 think-tanks from the United States and the United Kingdom came together to launch a full agreement for free trade between our two countries. This isn't a plan for a deal (like Chequers) or a plea that a deal is possible. It's an actual, complete agreement, legal in every detail, and ready for signature. You can read a summary of it here, and the full text here.
[...]
The US badly needs allies who have an enlightened self-interest in promoting competitive markets. And the US needs friends who can help keep it on the right path too. For its part, Britain needs negotiating partners abroad who can remind it yet again that the EU is only 20 percent – and shrinking – of the world's economy. For Britain, throwing away the ability to negotiate freely with the growing 80 percent for the sake of the shrinking 20 percent would be an act of folly.
If the UK had not gone into the EU – or the EEC, as it then was – in 1973, the US and Britain would almost certainly have free trade today. But the point of a deal between our two nations is not to close ourselves off from everyone else. On the contrary, we explicitly drafted this agreement with the goal of welcoming in other trade partners. We believe that Australia, New Zealand, Singapore, Hong Kong and Israel could join immediately, and we hope others would join after that.
[Ted Bromund, "There's Now a US-UK Trade Deal Ready to Be Signed," BrexitCentral, September 18]
You can have free trade without a free trade agreement. Dan Mitchell writes:
Instead of looking at whether multiple nations should simultaneously eliminate trade barriers, let's consider the case for unilateral free trade.
In other words, should the government abolish all tariffs, quotas, and other restrictions so that buying products from Rome, Italy, is as simple as buying products from Rome, Georgia.
The global evidence says yes, regardless of whether other countries do the same thing.
Consider the examples of Singapore, Macau, and Hong Kong. According to the World Trade Organization, trade barriers are virtually nonexistent in these jurisdictions.
Have they suffered?
Hardly. According to the World Bank, all three jurisdictions are among the most prosperous places on the planet. Indeed, if you removed oil sheikdoms and tax havens from the list, they would win the gold, silver, and bronze medals for prosperity.
To be sure, there are many reasons that Singapore, Macau, and Hong Kong are rich. They have low taxes and small government, as well as comparatively little red tape and intervention.
But free trade definitely helps to explain why these jurisdictions have become so rich at such a rapid pace.
[Dan Mitchell, "The Evidence-Based Case for Unilateral Free Trade," International Liberty, September 18]
But free trade agreements are the way to deal with China. Lyman Stone writes:
The Trump administration's strategy has been mind-blowingly foolish on this front. It has torpedoed programs well-suited to pressuring China like the Trans-Pacific Partnership, a strategic trade alliance created to unite the trade policies of all the fair-trading countries around the Pacific Rim. They have attacked NAFTA and other agreements with Canada and Mexico, threatening trade with countries where we have some of the least imbalanced trade, and where we have good investment balances. To its credit, the Trump administration has filed a WTO case against China related to intellectual property—but the administration then turned around and shot itself in the foot, threatening to withdraw from the WTO, which is the only form of leverage the United States has against China. The Trump administration talks a good game about being tough on China, but then systematically destroys every tool it has for actually pressuring the Chinese to change their dishonorable trade and investment practices.
"Winning" on trade globally, and especially with China, means forcing every country with which we trade to adopt international standards about state ownership of companies, intellectual property, investment freedom, regulatory standards, and currency exchange. Whether the issue is worker safety in Bangladesh, forced labor in Uzbekistan, or intellectual property in China, the United States should be focused on pressuring other countries to adopt international standards with which we can fairly compete. We can do this by forming comprehensive trade agreements that include rules in these categories.
For China, this could mean changing how the "Great Firewall" works so that Twitter can crush the leading Chinese social media site Weibo and Google can stomp on the main search engine Baidu. But these things will never happen without a maximum pressure strategy, and the only way to apply maximum pressure on China is to stay in the WTO and win case after case, gathering together co-complainants so that a growing range of countries can slap punitive retaliatory measures on China. We can create WTO-supervised sub-agreements on investment rules and intellectual property, locking Chinese firms out of numerous markets. We can create large regional trade agreements like TPP that lower barriers to trade and, even more importantly, lock China out of lucrative markets.
If the United States pursues this strategy, China's companies will eventually lose their edge. They will pressure the government to make changes to help them compete. Eventually, the government will either give in and liberalize, or else resist, and China's economy will weaken.
[Lyman Stone, "Here's What 'Winning' at Trade Really Means," Economics21, September 19]
Philadelphians no longer have to fear they will lose their property on a mere suspicion it was used in a crime. The Institute for Justice:
The Institute for Justice (IJ) today announced a major settlement with the city of Philadelphia, ending the city's draconian civil forfeiture machine. In documents filed with the U.S. District Court for the Eastern District of Pennsylvania today, city officials agreed to a set of reforms that will end the perverse financial incentives under which law enforcement keeps and uses forfeiture revenue, fundamentally reform procedures for seizing and forfeiting property, and establish a $3 million fund to compensate innocent people whose property was wrongly confiscated. These sweeping reforms, if approved by the Court, are the result of the Institute for Justice's class-action lawsuit that it has litigated over the past four years.
["Institute for Justice Dismantles Philadelphia Forfeiture Machine," Institute for Justice, September 18]
You've got to watch these guys all the time. In the omnibus spending bill the Senate just passed and will send to the House of Representatives there are more than a few accounting gimmicks, writes Justin Bogie. Here is one of them:
Take the so-called savings from changes in mandatory programs. The bill claims nearly $8 billion in savings from such changes.
This is the most commonly used gimmick to increase discretionary spending. These "savings" are included in appropriations bills as a rescission of funds, meaning that unspent money is taken back or spending is delayed until a subsequent year. Congress then uses these "savings" and puts the money toward other unrelated programs.
The problem is, almost all of these "rescissions" are of money that was never going to be spent in the first place. Last year's omnibus bill claimed $17 billion in savings from changes in mandatory programs that had no actual budget effect. In reality, those "saved" funds go toward new spending that only adds to our growing pile of debt.
Earlier this year, the president put forward a better rescission package that would have sent $7 billion in funding for the Children's Health Insurance Program back to the Treasury. The authorization to spend this money had already expired, so the federal government would not have been able to spend it anyway. But notably, it would have kept Congress from spending the money elsewhere.
Trump's proposal received a swift response from both sides. At the time, Sen. Pat Toomey, R-Pa., praised the proposal, writing that it would "prevent Congress from using the Children's Health Insurance Program to subvert our annual budget process and increase spending elsewhere on unrelated programs when no one is looking."
Senate Minority Leader Chuck Schumer, D-N.Y., came out against the measure and accused Trump and Republicans of "looking to tear apart the bipartisan Children's Health Insurance Program, hurting middle-class families and low-income children."
Yet Schumer was perfectly happy to vote for the current cromnibus, which would rescind or delay over $7.7 billion for the very same program. That's more money rescinded or delayed than the fiscal year 2018 omnibus rescission and the president's proposed rescission combined. Where is the outrage now?
[Justin Bogie, "Congress Is Using These Deceptive Tricks to Drive Spending Higher," The Daily Signal, September 21]
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