Free Trade Agreements That Guarantee Monopolies?

from the that's-not-free-trade dept

Free trade is a good thing. Your basic economics should have taught you that. Division of labor, comparative advantage, supply and demand -- they all combine to allow for better specialization, more productivity and greater output. In general, free markets are a good goal. While it's nice to see governments (especially the US) pushing for free trade agreements, the reality is that these agreements are very often not about free trade at all. There's so much lobbying that the "free trade" isn't just watered down, sometimes it's a complete farce. Witness the New Yorker's coverage of how the US is using free trade agreements around the world to force US-style intellectual property rules on the rest of the world -- often at tremendous harm to those countries. It's doubly ironic when you realize that intellectual property rules are the exact opposite of free markets. They're government-backed monopolies that benefit the monopolists, generally at the expense of everyone else. The New Yorker piece does a good job highlighting Josh Lerner's research that strengthening patent laws has no impact on increased innovation, and there's almost no connection whatsoever between copyright law and creative output. In other words, the exact reason for the laws (to put in place incentives for innovation and more creative content) aren't supported at all by history. Yet, now, we're forcing those same policies on countries where it seems clear to hurt them. The only issue I have with the New Yorker piece is author James Surowiecki's claim halfway through, that "Intellectual-property rules are clearly necessary to spur innovation." The rest of his own article shows how that's simply not true at all. In fact, even going beyond Lerner's research, there's plenty of other support for the idea that intellectual property laws don't actually help grow the markets they're supposed to grow, and in fact that they can do great harm. So, why isn't anyone else noting the irony that US "free trade" agreements include the exact opposite of free trade in a way that clearly harms the countries that agree to these policies?

Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    wacko92, 10 May 2007 @ 9:06am

    Big Business Propaganda

    Just to share a little knowledge with you. It's not just an issue of multi continental free trade problems, but an issue of free trade problems in general. On great example is the US's wonderful NAFTA (North American Free Trade Agreement). Under this amazing peice of legislature, UPS was able to sue the Canadian postal service for promoting its mailing service over those of possible competitors. Yes, they were able to sue the CANADIAN GOVERNMENT for promoting ITS NATIONAL POSTAL SERVICE over that based in another country. I'm not exactly sure when this example happened, but I heard about this in one of my sociology classes. I believe it was UPS but I'm not 100% sure since it could have been FedEx. All I remember is that under this agreement cases aren't studied by a court of law but instead by a private tribunal headed by 3 representatives, and the kicker is that these reps are picked by the company suing. Anyway the point of this is that Canada LOST!!! and had to pay out some 100 million dollars or something in that range.
    So now you tell me, has free trade truly been helped by all these wonderful laws and patents we see popping up?

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Shop Now: Techdirt Logo Gear
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.