I’m reading Ann Capling’s All the way with the USA.
It is quite an interesting read and what I have read so far is about the history of trade agreements and the various sorts that are around (unilateral, bilateral, multilateral, regional and global).
The book argues that with the exception of a few rare cases global trade agreements (GATT and WTO) are the most beneficial and benefit everyone ultimately. Rare exceptions include the Aust/NZ FTA which is widely regarded as a highly effective bilateral agreement because both side are beneficial and it is not a ‘preference’ agreement which, as Capling correctly points out is often more a case of ‘exclusion’ to other trade partners.
Now if I put aside for a moment my problems with FTAs, and point out that the biggest problem lies with the phoney FTAs that are around the world the fact of the matter is that the current US/Aust FTA is flawed on an economic level for many reasons.
The GATT was partly created to prevent future world wars. It is arguable that a key factor that triggered WWII was that many countries started to develop regional trade agreements which were highly exclusionary and created further economic instability as Australia gave preferential treatment to Brittan and other commonwealth countries at the expense of Japan and the USA.
So if big multilateral agreements are stabilising then the current trend of the US to form bilateral agreements (motivated by several factors, not least of which is frustration at the time it takes for these agreements to be met) is concerning as it is strategically destabilising. This is no way to fight a ‘war on terrorism’. It also put the economic interests in Iraq in a new light.
While it hasn’t been alluded to I have a feeling that the military industrial complex is playing a part in this active destabilisation on a strategic and economic front.
Further the significance of the Aust/US FTA is that it is the first agreement that has strategic/military significance – traditionally quite a no-no. And if this is the case then why aren’t labour and environmental regulations built into these agreements as they were in the economically insignificant Jordan/USA FTA?