An Argument for a Trans-Atlantic Free-Trade Zone

Discussion in 'Current Affairs, News and Analysis' started by Virgil, Oct 23, 2006.

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  1. [German proposal for the 'beware of Asia' crowd]

    An Argument for a Trans-Atlantic Free-Trade Zone

    By Gabor Steingart, Spiegel Online

    Excerpts [Full Article]:

    Asian businessmen are probably the friendliest conquerors the world has ever seen. But despite the politeness and the smiles, Western governments must act quickly to combat the rise of China and Asia. The West should discuss an ambitious project: a European-American free-trade zone.


    The sins of growth

    The history of the well-fortified West has taught us that those who defend their values also spread them. The principle of fair trade could also be spread in the Far East in the same way that the 1975 Helsinki Conference set off a process which ultimately benefited human rights in the entire Eastern bloc. Asia has a right to succeed. But the West also has the right to fight to preserve its own accomplishments.

    Can a Western free-trade zone really prevent Asia's ascendancy? Clearly not. Nor is that the goal. However, what it can do is to help reduce the slope of Asia's ascent and prevent our flight paths from crossing too frequently.

    But doesn't that sound too defensive? Is the energy needed to set up a trans-Atlantic free-trade zone worth it? Absolutely. A plane can take off in different ways: There is a violent updraft that creates turbulence on the ground and there is milder form of thermal wind which can also take others up with it. This take-off may not be as steep and as fast, but it is less destructive. Yes, global growth would slow down. But that wouldn't be nearly as tragic as many people think. The growth of the last few years has been impossible to enjoy anyway because of the many sins committed along the way, both in Asia and the West. Plus, it has been bought with other people's money -- namely through hefty borrowing and the money of future generations.

    The creation of a trans-Atlantic free-trade zone would also send a strong political message: Look here, it would say, like-minded nations are coming together. The nations that gave birth to the Enlightenment are devoted to the individual's right to freedom, but not at the expense of the collective. World leadership may ultimately end up in others' hands, but we won't stand complacently by while it happens. The Asians still need us more than we need them: They thirst for Western capital and technological expertise. And without Western markets, the Asian export industry would soon fall apart.

    No one less than Henry Kissinger, the godfather of modern American foreign policy, is encouraging Western government leaders to take steps in the direction of such a free-trade zone. The enormity of the task should not be a deterrent. The duty of governments, after all, Kissinger says, is to lead societies from where they currently are to places they have never yet been.
  2. De Spiegel?!? - enough said! Can you seriously imagine the Americans agreeing to any real 'free trade' zone. It would be loaded in their favour!
  3. I suggest you ask the Canadians what trade deals with the US are like!

    NAFTA (North Atlantic Free Trade Agreement)

  4. I agree that the US will want to 'Fix' all trade deals in its favour.
    However The Old World on both sides of the Atlantic really do need to get their act together.
    The Asian Tiger is Rising and Roaring, even if they are slaying their emblem.
  5. The Eurosceptics were trumpeting this years ago..
  6. Bump , because I think our usual informed posters have missed this.
  7. I would be extremely surprised if any form of trans-Atlantic free trade agreement was not designed to work along American financial regulatory lines.

    If so, there is less than no reason why the British should want to be involved. As a nation, we are making a killing by having a lighter, more effective and attractive regulatory environment than the States. Why on earth would we want to change that?
  8. Er, do you mean this ironically, or are you talking absolute bollix?
  9. This year we got substantially more foreign investment than the US or China. We are (for some strange reason considering Browns taxes) very attractive to international business.
  10. We are that attractive for a large number of reasons but the core ones include the cluster nature of Britain's financial services (i.e. everything in such close proximity), the size of the cluster in question, the time zone between Tokyo and New York and the fact that British training and qualifications are more widely appreciated than American ones on account of their flexibility towards local factors, e.g. markets and tax environments, unlike the Spam insistence that everything must be learned the American way (rather useless as foreign markets don't tend to use American systems on account of the restrictivity).

    The most important factor, however, is the "light touch" regulation system, in place since '86, which (especially when compared to the American's financial manacles) are very positive for international trade.

    So in short, Andy, no, I'm not talking bollix. I'm talking about the City of London and other financial centres who, in business terms, are having a great time at American expense.

    To use just a couple of examples: -
    33% of world currency trading happens in London, more than next two largest centres (New York and Tokyo) COMBINED
    50% of global shipbroking
    90% of all the world's metal trading
  11. There's a lot of truth in what you've written, but remember that the 'American' system is geared towards one of the world's biggest and arguably the most integrated market--North America or more precisely the US and Canada. It has it's own local factors--state taxes and regional market preferences. New Yorkers, Albertans, Californians and North Carolinians don't all have similar purchasing traits or for that matter the same sub-set of banking or corporate laws. The system generally 'works' for North America, less so outside.
  12. A trade conglomerate? Scary! Sounds a bit like Christian West versus the rest (perhaps a song in that). I'm right behind Carpe on this one. After all, I don't fancy going to war against Angola (many left out for brevity) and Zambia.
  13. You've got a point here, Virgil, but it is also one of America's biggest weaknesses, in terms of international business and financial services.

    It means that (as an example) a firm of lawyers who are licensed to practice in New York has to shell out time, money and effort to also operate in Los Angeles. The same company that is licensed to operate in London, in the majority of cases from Accountancy & Actuaries to Insurance, is also allowed to operate anyway in Europe. This breadth of possibility is then extremely attractive for partnership to other companies world-wide, becoming a self-sustained circle.
  14. We could always start with turning the EU into a free-trade zone? Oh go on!

    This remains the vision of the Anglo-Saxon model of Europe, what de Gaulle looked down his nose at and prophecied against as "le grande large".

    I remember an article last month trumpeting that the Italians had at last overcome restrictions on selling Aspirin (or such like) across the supermarket counter after years of restrictive trading. The EU is to thank for this progress but it just shows.

    The romano/gallic vision of Europe is the EU as a counter to the American market, a competitive counterweight to their cultural destruction of all things noble i.e. death by Dunkin' Donuts. In fact if Keynes or Adam Smith were aware of Dunkin' Donuts they'd have been mortified, surely?