Wall Street Journal: In New World of Trade Diplomacy, Free Trade and Tariffs Take a Back Seat

The Wall Street Journal said that reshaping the free-trade agreements of the 90s is driven by economic and political changes seeking economic integration and addressing challenges, but noted that the emergence of electronic services and e-commerce meant physical goods play a relatively smaller role in global trade.

In an article by Daniel Michaels titled "In New World of Trade Diplomacy, Free Trade and Tariffs Take a Back Seat," he said that the Biden administration has opened trade talks with Japan, the European Union, and more than 20 countries from India to Peru on cross-border economic links last year, but that those talks didn't focus on free trade or tariffs.

He attributed that change to gaps in wages and production costs between rich and poor countries that narrowed, which shifted attention to indirect costs like environmental regulations. He also added that the economic dislocation from globalization has made old-style free trade a losing proposition in many politicians eyes.

"FTAs (free-trade agreements) took off in the 1990s, when free-market economics appeared to have triumphed following the Soviet Unions collapse. In 1992, when independent presidential candidate H. Ross Perot warned of "a giant sucking sound" from American jobs being siphoned to Mexico by the then-proposed North American Free Trade Agreement, customs agents expended great efforts ensuring proper duties were being paid on products crossing borders," the article goes on to say.

The article also noted that the push continued through the early 2000s, peaking with two Obama-administration efforts: the Trans-Pacific Partnership, aimed at linking 12 countries in Asia and the Americas, and the Transatlantic Trade and Investment Partnership, between the U.S. and EU, but that it faced opposition in the two countries, ultimately leading to its failure.

"While the treaties collapse did prompt a big recalibration of objectives, it didnt portend an end to trade liberalization," the article said.

Instead, these deals started emphasizing other issues than tariffs. (MORE)

Source: Qatar News Agency