Coyote Blog

If so, great for them.  The more free trade in the world, the better:

Canadian and European officials say they plan to begin
negotiating a massive agreement to integrate Canada’s economy with the
27 nations of the European Union, with preliminary talks to be launched
at an Oct. 17 summit in Montreal three days after the federal election.

Trade Minister Michael Fortier and his staff have been engaged for
the past two months with EU Trade Commissioner Peter Mandelson and the
representatives of European governments in an effort to begin what a
senior EU official involved in the talks described in an interview
yesterday as “deep economic integration negotiations.”

If successful, Canada would be the first developed nation to have
open trade relations with the EU, which has completely open borders
between its members but imposes steep trade and investment barriers on
outsiders…

A pact with the United States would be politically impossible in Europe, senior European Commission officials said.

I would have said that changing the last statement would be a great goal for an Obama administration that wants to make Europe love us again (did they ever?)  But he has made clear that trade does not count in his definition of good relations, and in fact has already committed to initiating trade wars against our neighbors Mexico and Canada.

For years, protectionists in this country have tried to argue that "oh, I am really for free trade, but to be fair we must impose environmental and labor standards on our trading partners."  Well, now Europe is proposing doing exactly the same to us:

The European Commission is considering proposing a
carbon dioxide tariff on imports from states failing to tackle
greenhouse gas emissions, while also considering a toughening-up of the
EU’s own emission trading system….

The plan reflects pressure by French president Nicolas Sarkozy who
argued in October that Europe should "examine the option of taxing
products imported from countries that do not respect the Kyoto
Protocol," referring to the 1997 international agreement on fighting
climate change.

Mr Sarkozy urged Brussels to discuss the implications of "unfair
competition" by firms outside the EU, which do not have to abide by
strict European standards on CO2 emissions.

This letter from Don Boudreaux seems relevant:

Hillary Clinton needs a
language lesson.  She favors only trade that is found by government to
"benefit[] our workers and our economy" and that promotes "rising
standards of living across the world" ("Full Transcript: Hillary Clinton Interview," December 3; my emphasis).  She then asserts that "There is nothing
protectionist about this."

Oh please.

Protectionism
exists whenever, wherever, and whyever government artificially raises
its citizens’ costs of buying imports.  Protectionism has forever
rested on the false notion that government officials know best how
consumers should spend their money.  And it attempts today to hide its
ugly face behind the smiling mask of allegedly noble intentions, such
as those mouthed by Sen. Clinton.

The title of his post is "The Moment Somone Must Explain that He or She Isn’t a Protectionist, You Can Bank on that Person Being a Protectionist."

It has been pretty quiet on the globalization front.  I saw today that Don Boudreaux released his new book on globalization, and I thought to myself — wow, that was a charged issue a few years ago, what happened to it?   I was in Seattle for the riots and it was a big deal.  Well, in part, I guess the feistiness of the anti-globalization types may have gone down because they are winning — protectionism is advancing today on many fronts when for a while we had it against the ropes.  In large part this is because the US has virtually abandoned its leadership role on free trade.

However, there is another reason we don’t hear much from the anti-globalization folks:  Because they have all joined the global warming movement, deciding that the environmental packaging is a better way to sell socialism and protectionism:

The Social Democrats are calling for sanctions on energy-intensive U.S.
export products if the Bush administration continues to obstruct
international agreements on climate protection, the party’s leading
environmental expert said Tuesday.

The move, after the United
Nations climate conference last week in Bali, Indonesia, has won strong
support from the Greens and other leftist groupings in the European
Parliament. Those factions will renew their bid to impose such levies
when the Parliament reconvenes next month.

I haven’t really blogged about the Chinese toy recalls, not knowing much about them.  However, my first thought on hearing the problems described was, "aren’t those design defects, not manufacturing issues?"  I had a strong sense that populist distrust of trade with China was being used as a fig leaf to cover Mattel’s screw-ups.  Several of the recalls were for parts such as magnets that were small and could be swallowed.  There was no implication that the magnets fell off because they were attached or manufactured poorly, they were just a bad design.

I have worked in a number of large manufacturing companies that have plants and suppliers in China.  It was out responsibility to make sure the product that got to the customer was correct.  There is no way we would source a product from an independent foreign company, and have the product delivered straight to stores without inspection, unless we were absolutely damn certain about the company’s processes, up to and including having full-time manufacturing people at their plant.

Well, I might have been on to something (WSJ$)

Toymaker Mattel
issued an extraordinary apology to China on Friday over the recall of
Chinese-made toys, saying most of the items were defective because of
Mattel’s design flaws rather than faulty manufacturing. The company
added that it had recalled more lead-tainted Chinese toys than was
justified….

Mattel ordered three high-profile recalls this summer
of millions of Chinese-made toys, including Barbie doll accessories and
toy cars, because of concerns about lead paint and tiny magnets that
could be swallowed. The "vast majority of those products that were
recalled were the result of a design flaw in Mattel’s design, not
through a manufacturing flaw in China’s manufacturers," Mr. Debrowski
said. Lead-tainted toys accounted for only a small percentage of all
toys recalled, he said. "We understand and appreciate deeply the issues
that this has caused for the reputation of Chinese manufacturers," he
said.

Mattel said in a statement its lead-related recalls
were "overly inclusive, including toys that may not have had lead in
paint in excess of the U.S. standards. The follow-up inspections also
confirmed that part of the recalled toys complied with the U.S.
standards."

The other interesting thing here is just how important Mattel’s relationship with China is, to have even issued this apology at all.  For such a massive and high-profile recall, Mattel came off very well through the succesful strategy of blaming China.  I know that parents I have heard talk about the recall blame China and have increased fear of Chinese products.  So it is interesting to see that Mattel feels the need to abandon this so far winning PR strategy.

Via the Washington Post:

It has become a Capitol Hill ritual: A few senators, always including the New York Democrat Charles E. Schumer, introduce a bill to punish China
if its leaders do not raise the value of the nation’s currency. Photos
are taken, news releases are issued, but nothing really happens.

This
year, the atmosphere on the Hill is markedly different. Powerful
senators from both sides of the aisle, Schumer among them, are pushing
two bills that threaten retaliatory action if China does not budge. For
the first time, the idea is gaining broad support. The bills are moving
swiftly through the Senate, and many analysts expect one will pass.

If the bill’s authors are successful, the effect at a minimum will be to raise consumer prices in the United States and lower them for Chinese citizens.  So we are going to "punish" China by making our own citizens pay higher prices.  How does this make any sense?  Also, in the process, let’s make sure we reduce the capacity of China to buy US government debt, which to this point has been reducing the cost of the Federal budget deficit.

Tyler Cowen argues this is the best we can expect — the worst is a substantial debalization in the Chinese economy… and ours.  I wrote much more on continuing to allow the Chinese government to subsidize American consumers here.