Thinking about trade agreements

So I was walking along this morning and thinking a bit about an issue you see mentioned during these campaigns: trade. Specifically trade between countries that is regulated by various trade agreements like NAFTA.

Both Sanders and Trump, it seems, are against such agreements and think these agreements have screwed America. Clinton is a bit more complex—I think she was for them before she was against them. (That’s probably a cheap shot but I couldn’t resist.) The other Republicans are probably for the agreements though I don’t know for sure.

So what is the right answer? The Sanders/Trump complaint is something like this, I believe, and I’ll use US/Chinese trade relations as an example: The US is letting Chinese products in with few tariffs added on top. The Chinese can keep their prices low because their workers work for little and there are few environmental protections of the sort that American factories have to impose. So Chinese products are cheaper and can compete with US products in local and inetrnational markets.

The Sanders/Trump solution is, I believe, to renegotiate these trade agreements to impose tariffs on these Chinese products. (Sanders would probably lower tariffs if the Chinese added environmental protections, which would, of course, cost money.) As a result, Chinese products would become more expensive and US products would be better able to compete.

So would the Chinese go along with that? It seems they have a couple options. One is to kowtow to the new agreement and keep access to the US Market. Another is to say, “screw you guys,” and focus on other markets like India, Africa, their own, etc. Another option would be to impose tariffs on our products, thus limiting US manufacturers appeal to the huge Chinese market. (The problem there is that while there are many Chinese, a lot of them are poor and thus not able to buy much.)

What would China do? I have no idea. Thinking about this stuff really makes me realize how little I know about it.

But here’s my main thought. This kind of analysis of these is not something you really see in news coverage of the candidates, or in speeches from the candidates and their proxies. Most of the arguments seems to be that this candidate is better than another for some other reason – he or she is more “qualified,” or has leadership qualities, or whatever.

So why is that? I suspect that for some kind of evolutionary reason people are wired towards cult leaders, not dudes who sit around explaining why their approach to trade agreements is better (YAWN!). If anything, we chose the guy we like, then talk ourselves into his ideas on trade agreements. And this would seem another example where our behavior is not particularly rational at all.

P.S. As a side note to all this I reaffirm my belief that the threat posed to Americans workings by fluid trade will be dwarfed by that of robotics, artificial intelligence and 3D printing.

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