(7e) Free trade deals versus defending own market

President Trump is ridiculed for using the words "I hereby order"; indeed, it sounds strange.

But, his following sentences do make sentence. Why should for instance cars that are sold in America be produced in China? It increases pollution due to transport over long distances, results in unemployment in the USA and thus angry people not only for people who are less educated but also for engineers as today's cars are complex machines to build while it increases the cost for everyone except for investment and hedge fund managers. Indeed, these managers encourage companies to move away to countries with less environmental and workers protections so production costs are lower while products are transported by big boat, plane and truck companies (an extra cost) and mainly sold in shops that are part of chains because these managers via their funds have many shares in those companies and thus decision powers without owning the companies and thus little responsibly for their survival but instead for the maximization of profits, even when this may result in problems for the companies whose shares they own. Indeed, sometimes these funds may decide to take profits when a company makes profits but less than expected and thus they sell large numbers of shares of these healthy companies after which the company may be forced to reorganise, i.e. fire employees to calm the markets or even move abroad to low-cost countries to proof all is under control.

We live in an interconnected world. Worldwide people benefit to some extend although many also lose when small companies can't compete with the "big companies" for the salaries the latter pay to employees and the promotion opportunities they have and with the prices of products they sell. And the biggest and thus most influential people are those who earn via investments in shares of companies without having the responsibility to look well after those companies and they can even cause troubles when they take profits and sell many shares at the same moment so share price falls and companies lose lots of money.

Yes, President Trump is hard and exhausting to many as this article describes. Still, when President Trump says cars (and other products) that are sold in the USA should be made in the USA, I remember as an example how ones Belgians were furious that the management of the car manufacturer Renault decided to close Renault Vilvoorde to produce these cars somewhere else at a lower cost while now we find it almost normal that cars are made in low cost countries. Of course, President Trump wouldn't mind products that are sold elsewhere are also produced in the USA as any good politician wants work for his citizens. Similar, many previous presidents complained about the trade deficit with China and now he's acting. I'm not defending the way he does things but sometimes we need bullies to achieve something as only negotiating sometimes fails to solve problems. Of course, when agreements are reached than time needs to proof these agreements are honoured. The problem with China (that also attracts companies or keep them in China to produce products in China to employ Chinese while sell abroad as that enriches a country) is that it invest its huge trade surplus not only in its own or foreign economies but also in its army and as a result scares many neighbours.

Today's capitalism means globally people have work but often in low-paid jobs while local companies can't compete with the big companies and thus may go bankrupt unless they are bought by the larger companies that become even bigger and reach a monopoly position. Similar in Europe although of course, not each country needs to produce its own products as production sites can be located throughout Europe, reducing also migration within Europe.

Multinationals can still produce worldwide but more for local markets than for export to other countries where products are sold expensive to maximise profits for a few. For instance, China can produce cars for its own very big market; a trade war should not be needed although those with shares don't like what President Trump says as they want to continue to invest in low-cost countries and even start to move out of Asia towards the poorest continent, Africa although its many wars makes it a risky business. Indeed, sometimes he's right and it should be possible to say so although the future car industry are not cars on fossil fuel but powered with renewables. This doesn't mean there can't be trade and transport between countries and continents as there will be but less intense and with smaller but more energy-efficient means of transport.

But don't be fooled, uncontrolled free trade will be defended by its hard-core believers who have lots of powers as they can be presidents or PM of countries or companies who can convince as they show that being a believer in free trade made them successful. Indeed, certain hard-line Brexiters want to leave the EU because it became too much about workers and environmental rights, while they are part of a fundamentalist free trade religion. And, ones part of such a free trade agreement can result in lose of the right to have regulatory rules such as on the environment, it will be difficult to reverse; the reason why free trade advocates prefer these deals because, ones established they are no longer under the control of parliaments and thus there is no longer any interference possible from ordinary people. Therefore, trade agreements should remain under the control of parliaments and reviewed every e.g. 10 years so they can be updated if needed; they should even contain an "Article 50"-ish clause that allows the possibility to leave the trade agreement if countries are no longer comfortable within the agreement such as when in a member of the trade area a new president is elected who doesn't obey to rules agreed such as when this government wants to ignore environmental and workers rights or can convince a majority to change those rules so everyone must change them; than it should be possible to leave. Indeed, PM Johnson disagrees that the EU links the environment with a future free trade deal with Latin America because than he claims it isn't free. And thus, although very in favour of leaving the EU, he still wants to tell the EU how it should act. Further, President Trump is not only about free trade but also about having good deals for his own country and thus PM Johnson may find it extremely difficult to reach a good trade deal with the USA as Americans are tough guys PM Johnson admits. 

Indeed, the EU exists to empower small European countries to have good deals with other countries, not only for the industry but also for its employees and the environment. Being out the EU may proof Brexiters that being part of a union under equals results in more powers compared with being an outsider as a small country. Still, it should be possible to leave if they wish, the country can always decide to return at a later time and I think this is best via a referendum so the country but also larger organisation can check itself why a large number of people want to leave. However, I also acknowledge that it was not clear the referendum outcome would be final and thus fewer people voted than may have done if they knew it would be for real and thus the discussions within the UK but also with the EU are understandable although I think they can't go on for too long as this increases anger between the different groups. A good time to write a script instead of thinking to abolish Article 50.