It is also possible that harmonization, labor standards, investment measures, investor-state dispute settlement procedures, etc. will not empower but rather disempower " a different set of rent-seeking interests and politically well-connected firms". Certainly putting the US in the same basket as the EU as far as food health and safety is concerned would strengthen the left's hand inside the United States—and the Naderites frothing denunciations of the Codex Alimentarius were in bad faith. Rodrik's presumption that regulatory barriers are produced by good social democracy rather than bad rent-seeking has always seemed to me highly questionable: Dani Rodrik: What Do Trade Agreements Really Do?: "New (and often problematic) beyond-the-border features of current trade agreements... regulatory rules and harmonization...

...intellectual property, health and safety rules, labor standards, investment measures, investor-state dispute settlement procedures, and others—they have become harder to fit into received economic theory. It is possible that rather than neutralizing the protectionists, trade agreements may empower a different set of rent-seeking interests and politically well-connected firms—international banks, pharmaceutical companies, and multinational firms. Trade agreements could still result in freer, mutually beneficial trade, through exchange of market access. They could result in the global upgrading of regulations and standards, for labor, say, or the environment. But they could also produce purely redistributive outcomes under the guise of "freer trade." As trade agreements become less about tariffs and nontariff barriers at the border and more about domestic rules and regulations, economists might do well to worry more about the latter possibility...


#shouldread

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