Some random readings

Three random articles caught my attention - one on labour and trade, one on monopoly and the last on protectionism.

On labour and trade, Mandeep Minhas explains how labour provisions in present trade agreements are just not adequate to enforce worker rights. Referring to the long drawn Guatemalan dispute,  he opines that there must be stronger labour provisions in trade agreements.

The dispute between the unions and Guatemala is just one example of inadequate labor provisions. To remedy FTAs we must put labor rights at the center and invite representatives from labor groups to join trade advisory committees. Does anyone believe that labor groups would have consented to a process that required a panel to first determine that a labor violation was “affecting trade or investment” in order to conclude that their had been a violation of the FTA?

Not many would agree that there is a need for labour related provisions in trade agreements. The fact that these provisions are being increasngly used in bilateral trade agreemnents is a sign athat the scope, extent and interpretation would become increasingly contentious in the coming years.

On protectionism, Scott Lincicome in his inimitable style outlines the impact of foreign trade policy on local businesses and possibly election outcomes.Referring to a study on economic effects of trade policy on States, he opines:

Although the study’s authors are careful to note that these findings do not prove that President Trump’s trade wars caused these states’ weaker economic performance in 2018, they nevertheless state that the strong negative correlations between trade exposure and employment/​production suggest that the tariffs, retaliation, and related uncertainty played a significant role. Furthermore, their findings indicate that “the trade war initiated by the United States may have had a stronger impact on U.S. employment and production than what is found through the lenses of standard models of trade,” because those national models might mask the concentrated pain that U.S. tariffs and foreign retaliation inflicted on certain trade‐​exposed states.

An interesting model to study trade policy and impact on States.This would be relevant to many States that are federal with multiparty democracy!

The last read was fascinating - a piece on trade routes and monopoly. It tries to draw a causation between monopoly rights, over loading due to rent seeking and shipwrecks.

Together, these results provide additional evidence that is consistent with the mechanism outlined in our model. Ships in the Manila Galleon trade were more likely to be shipwrecked or to return to port because they were late and overloaded; in short, they were shipwrecked by rents.

This study demonstrates how monopoly regulations can have unanticipated negative consequences in the form of shipwrecks. While this historical setting is unique, the lessons from rent-seeking in the Manila Galleon trade can be generalised. The mechanisms responsible for shipwrecks in the Galleon trade are likely operative in other settings. For instance, cargo limits are often not observed on smaller flights – a problem that is particularly acute in developing countries – and this has been anecdotally linked to airline crashes.

 An eclectic list!