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Essay Details:
Essay text:
“We can’t do it.”
b) The ‘in-principle’ arguments i.e. “Even if we can do it, it’s not good.”
Process versus outcome
• Political power influences negotiations and legitimacy of discussions.
• Bargaining process may be pushing to a non-free trade equilibrium that tilts advantage in favour of one party.
• Eg: Scientific risk assessment of agricultural products in Australia includes trade representatives on the US-Australia SPS Committee, and substitutes right to appeal to WTO.
The compensation principle
• Free trade may increase total surplus, but even then it does not benefit market participants individually...
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