GREEDO ALWAYS DRAWS FIRST because Lord Dampnut loves chaffing over friction-free losses in markets that are inherently imperfect
Aside from the extraneous hate-mongering about immigration or migratory labor, the real reason why Brexit and now Lord Dampnut want more bilateral agreements rather than multilateral trade agreements (like the EU) is simply about profit, or rather more wealth that goes more directly to the 1%.
This doesn’t diminish TPP-like objections that multilateral agreements (FTA) have potentially non-sustainable externalities like environmental harms or asymmetric regulatory costs, but not having more standardized trade agreements creates even greater costs and potentially even greater harm because there are more complex transaction costs that are opaque to the mercurial P*TUS.
As other have observed, Lord Dampnut sounds from his promoter/sales language like a real estate dealer, and prefers simpler negotiation like threatening Mexico with sending US troops across the border.
Capitalists would in the short-run prefer the sub-optimal bilateral agreements because it maximizes firm-level profit versus sustainable welfare like more gold toilets for fewer billionaires, rather than say … climate change. And then there’s all that nativist racism…
For starters, there is a good reason trade experts tend to favor big, multilateral and regional deals in the first place, and it’s not because they are conniving globalists under the thumb of George Soros.
One rationale is that large deals keep things simple for businesses by establishing a single set of rules, which encourages more trade.
When governments negotiate lots of separate bilateral agreements, some policymakers argue it can create a messy “spaghetti bowl” of overlapping and conflicting standards that make exporting around the world a pain.
“You don’t want inconsistent rules and inconsistent approaches,” Mickey Kantor, the former U.S. trade representative who led negotiations to create the World Trade Organization and NAFTA during the Clinton administration, told me.
Sometimes, it’s also easier for multiple countries to reach a deal than it is for just two countries. Chad Bown, a senior fellow at the Peterson Institute for International Economics, compared it to a three-way trade in the NBA: A pair of countries (or teams) might not have much to offer each other, but add another into the mix, and everyone can leave happy…
As far as I’ve seen, Trump and his brain trust have never fully explained why they think bilateral deals are a better way to manage trade. But there are enough clues to figure out their reasoning.
- First and probably foremost, Trump and his close adviser Steve Bannon are philosophically opposed to anything that smells faintly of international governance…
- More prosaically, Trump seems to dislike agreements like TPP because they keep the U.S. from throwing its full weight around on the world stage.
The president thinks they’re too hard to get out of once implemented (he’s compared them to “quicksand”) and his team has suggested they give small countries too much clout during trade negotiations…
Trump may also find that he has a bit less leverage in bilateral talks than he expects. Thanks to the WTO, most of the big remaining hurdles to world trade aren’t tariffs; they’re nontariff barriers like regulations…
In the end, Trump might end up starting negotiations on a lot of trade deals. But at the moment, his strategy seems designed to ensure a lot of those negotiations fail.
…our results suggest that transportation costs, differences in country sizes and comparative advantages are all obstacles for having a multilateral FTA, which we show to be the globally First-best solution for several different cases of our model.
Therefore, removal of such obstacles should be the main goal toward achieving a multilateral FTA.
Accordingly, international development policies conducted for countries to converge to each other (e.g., increasing internal and international stability, reducing poverty, investing in transportation technology, international diffusion of production technology) should be the main tools.
(Yilmazkuday & Yilmazkuday 2014)