My 2 cents on Trade Agreements and the rules of the games

Actually, I think we have to take a deeper look. We tend to attribute problems with free trade to cheating. And, of course, there are instances of cheating. But, in my experience, the problems more often stem from fundamentally different strategies that are perfectly legal under the rules of the WTO  and IMF. The WTO rules do not outlaw mercantilism or discriminatory investment policies or government aid to industry. Singapore is totally mercantilist and yet is presented as an icon of free trade. China’s currency manipulation is not illegal under free rules. Japan’s old cartels, cross shareholdings, monopolistic distribution systems were not considered unfair under GATT and WTO rules.

Essentially, the problem is that we in the west consider countries that are democratic with capitalist, market systems to all be playing the same game. But they aren’t. The Chinese, Koreans, Taiwanese, and Germans are playing football while the Americans, Brits, and Aussies are playing tennis. The Koreans are playing football fairly and the Americans are fantastic tennis players. The problem is that the Americans think everyone is and should be playing tennis. But the international rules do not dictate that tennis is the game. So the Americans continue to take a beating.