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>> Strawman misses the real problems with bilateral trade agreements. Often they
>> cause trade diversion, rather than trade creation, Right - giving me more choices just changes the things I spend money
on, but doesn't actually create more income. Therefore there is no point in
giving people choice about what to buy. Why don't we just have a government official decide what I should
buy and leave it at that eh? Any choice that I would want to make which is
different to the government official would merely be diverting my
trade. Think this through. If the trade is being diverted is because
those who are spending their money have decided they get a better outcome
spending on the new thing. It's called exercising of choice. >> thus leading to no
>> efficiency benefits for the importing country but causing it to lose tariff
>> revenue. No, the country doesn't lose revenue, the government loses
the revenue, and the buyer gets to keep more of the money they earned. >> Also, the rules of origin that go along with them are costly to
>> negotiate and comply with. Yeah? Unlike a complex system of trade tariffs set up to favor select industries
judged by the government of the day to be 'worthy' of protection (ie give
sufficient donations to the right political parties). No cost there is there? >> The fact that bilateral trade deals undermine the
>> benefits of WTO membership and thus make it more difficult to get "real" trade
>> reform should also not be discounted. Yes, owning a skateboard undermines the benefit of owning roller-blades
too. That doesn't make a skateboard a bad thing. The reason we don't have open trade is because everyone thinks we will have
massive unemployment or millions of people working in sweatshops. When we have
partial free trade, and neither of those things happen, people will
say 'what the hell - gimme access to the markets'.
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