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Tyson Followup

There is always pressure to tie trade and environmental issues together. "I'm not speaking for the campaign here," but I think we need to create a new global environmental agency of some kind or else green issues will get stuck onto trade agreements and into trade institutions, which is going to block new agreements and undermine the institutions we have.

Tyson was, according to my uncle Andy (who worked under her somewhere [CEA?]), what passed for a protectionist in the Clinton White House.

July 28, 2004 | Permalink


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Trade should stand alone. That means getting the drug lobby and Hollywood out of the WTO as well.

Posted by: praktike | Jul 28, 2004 12:01:23 PM

I am not sure trade can stand alone. Trade is an unambiguous positive in the aggregate, but has clear relative winners and losers [losers being a substantial political force].
Under the current system it is logical for the relative losers to use trade as leverage for other reforms that balance out the benefits.
If we could come up with a formula that allowed some type of distribution of the benefits of trade to all, in a neutral formula, it would be possible, but that formula is awfully elusive.
I am unable to think of a policy initiative that would break the logic of the relative losers from using trade as leverage, but I would be interested in proposals.

Posted by: theCoach | Jul 28, 2004 12:15:05 PM

Tyson was chair of the Council of Economic Advisers.

She was also part of the "Strategic Traders", a group of economists who argued that, for certain industries (e.g. those with steeply downsloping experience curves, like semiconductors) that there was an argument for protectionism.

Krugman was on the other side of this debate, and won it handily.

She was also Dean of my business school. Can't say she was that friendly, unlike Janet Yellen, who was like everybody's grandmother.

Posted by: Tom | Jul 28, 2004 12:55:43 PM

The primary link between environmentalism and globalization is the use of Chapter 11 to nullify local environmental laws on free-trade grounds. The full consequences haven't been seen yet, but basically it gives an unelected, unaccountable commission the ability to nullify laws.

People like Brad DeLong or Matt make it seem that fake environmental concerns are being used to protect local industries, etc., but what has happened is trade has been given a trump card over the environment.

Until the global environmental law is being enforced (probably during the 23rd century), I think that the environmental laws of nations and states should be left standing.

Posted by: Zizka | Jul 28, 2004 12:56:23 PM

The primary link between environmentalism and globalization is the use of Chapter 11 to nullify local environmental laws on free-trade grounds.

I'd like to read about that. Got a link?

Posted by: praktike | Jul 28, 2004 1:03:42 PM

prattike:No link, but here's an overview (It's a big issue for the left in Canada).

Basically, most trade agreements make that any law that negativly impacts an investmnet make s the government responsible for any POTENTIAL losses on that investment.

The example given in Canada, (which WILL happen over the next few years), is that the Canadian government restricts water exports until environmental/natural resource studies are completed. A US corporation who buys Canadian land, to export all the water connecting to it, can sue the Canadian government under NAFTA for all the income they would have made by exporting the water.

I'm kind of torn on the globalization issue, I don't think there can be true globalization until there's freedom of labour movement as well. But the trade agreements DO try and attack the right to soverign governments to make their own laws.

Posted by: Karmakin | Jul 28, 2004 1:11:38 PM

Aha. So the idea is that the Candian law restricting water exports is a "taking?"

If the Canadian gov't negotiation NAFTA, and NAFTA made this possible, why didn't you crazy Canucks harmonize the law, or not sign on to whatever provision in the first place?

Posted by: praktike | Jul 28, 2004 2:17:27 PM

If you Google Chapter 11 + environment you'll get tons of stuff. I don't have a specific source to recommend but I saw lots of possibilities.

The problem with Chapter 11 is as much an American as a Canadian problem. In one case, California was sued by a Canadian company when it prohibited an additive used only by the Canadian company.

The problem is bad enough that I think informal adjustments are being made. The possibilities for courtroom blackmail seemed infinite.

One of the reasons I'm still a free-trade skeptic is the hysterical way the issue was steamrollered through. Opposition was ignored to the extent possible. DeLong still is willing to admit any credibility at all to the anti-free trade people, or even skeptics like me, even though he has admitted (in a passage I can't find anymore) that the Clinton administration only got the Republican half of their program put into effect.

Posted by: Zizka | Jul 28, 2004 2:45:41 PM

But I think what DeLong would say is that these problems have more to do with regulation than with trade per se.

Posted by: praktike | Jul 28, 2004 2:59:57 PM

I meant to say the Brad does NOT allow credibility, etc.

"These problems have more to do with regulation than with trade per se". -- unclear as to your meaning. The Chapter 11 problems come from the fact that Chapter 11 essentially allows nullification by lawsuit (making the regulating entity pay all costs to the regulated). From the pure free-markey POV, getting rid of all regulation is good, but that isn't Brad I don't think.

Posted by: Zizka | Jul 28, 2004 4:43:37 PM

Ah. Just read up on the thing. I would say that Chapter 11 should not stand.

Posted by: praktike | Jul 28, 2004 4:50:49 PM

When it was announced in 1993 that Tyson would be on the CEA, a libertarian colleague told me and he was very concerned that this meant Clinton would abandon George H.W. Bush's free trade stance. Thank goodness his concerns did not materialize.

Posted by: pgl | Jul 28, 2004 6:37:55 PM


Despising Chapter 11 doesn't make you anti-free trade, it just makes you anti certain so called FTAs.

The typical "FTA" nowadays tends to be as much about investment and intellectual property protection as about free trade. Not necessarily a bad thing, but whether you're pro-free-trade and whether you're pro-FTA are nowadays two separate questions

Posted by: Robert McDougall | Jul 29, 2004 3:13:08 AM

I don't claim to be a protectionist or anti-free-trader. I'm just accused of it a lot. I call myself a free trade skeptic.

When the lines were drawn, it was a yes-or-no question without much nuance, and you either had to accept the whole package or reject it. I'm not in Congress so I didn't have to decide, but I probably would have rejected it.

The hysterical way the package was rushed through, anmd the evangelical enthusiasm many still have for free trade, especially here and on Brad DeLong, really angers me.

Posted by: Zizka | Jul 29, 2004 3:06:12 PM

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