Trade Agreements or Political Independence: A False Choice

A new international trade agreement has hit a stumbling block. Against the background of a decades long deadlock of the WTO negotiations, and the controversies surrounding the more recent Trans-Pacific Partnership, the Walloon region in Belgium has decided to ‘veto’ the CETA (Comprehensive Economic and Trade Agreement) between EU and Canada. As any decisions regarding the European Common Market require a unanimous vote of regional representatives, this veto appears insurmountable.
These recent events have raised significant concerns about the future of free trade talks. In fact, the past year has seen a rise in the anti-trade rhetoric across the globe, rhetoric often capitalized on by varying political candidates. Before drawing any conclusions, however, we should pay more attention to the many different facets of these controversies.
On the one hand, it’s always worth remembering that intergovernmental trade agreements are not equivalent to free trade, and in fact are purported to bring about a reduction in the ease of trade and an increase in costs favorable to some particularly well-connected interest groups to the detriment of consumers. This is why trade agreements, bilateral or multilateral, take so long to be negotiated and ratified, as they demand political maneuvering and reciprocal concessions to satisfy the conflicting interests of different industrial and agricultural lobbies. That they parade themselves as defenders of the old free trade ideals is indeed their foremost accomplishment.
Mises himself was partial to such efforts in the first half of the 20th century, around the time when he was employed at the Chamber of Commerce in Vienna. As Dr. Hlsmann explains:

This post was published at Ludwig von Mises Institute on Oct 25, 2016.