Free Trade and Free Trade Agreements.... What is the difference?

[caleb]

I’ve heard a lot about certain politicians and economists claiming that they are in favor of free trade but not free trade agreements… ron paul would be the most recent example I have of this. What exactly is the difference? I can see the ideological difference, because free trade agreements are merely an expansion of countries with that we trade freely with while free trade is completely free exchange of goods regardless of borders. Obviously trade agreements distort markets.

Is this distinction similar to the distinction the austrians make regarding a Keynesian approach to tax cuts? As far as favoring the a reduction in taxes to minimize government interference in production, but are not in favor of tax cuts as a Keynesian cure all to recessions caused by government interference.At least that’s how I understand it, Is this correct?

Feel free to elaborate, I’m working hard to grasp a lot of these Austrian concepts but there is a wealth of knowledge the I have barely scratched the surface of. If you have any suggestions for readings that address these issues let me know.

[nirgrahamUK]

if a free trade agreement goes on for many many many pages rather than simply declaring, i promise not to subsidize/tax/license/interefere with trade going in or out of our two countries X and Y , we sign below…

then that is a good indication that the trade being agreed to is not in fact ‘free’.

[Stolz25]

@caleb

I can see the ideological difference, because free trade agreements are merely an expansion of countries with that we trade freely with while free trade is completely free exchange of goods regardless of borders. Obviously trade agreements distort markets.

I think you have it right here.

@caleb

Is this distinction similar to the distinction the austrians make regarding a Keynesian approach to tax cuts? As far as favoring the a reduction in taxes to minimize government interference in production, but are not in favor of tax cuts as a Keynesian cure all to recessions caused by government interference.At least that’s how I understand it, Is this correct?

This one you are a little off on. Keynesians usually advocate tax cuts and spending increases at the same time in order to “fight” recessions caused by the exact same policies. Austrians know that a tax cut without a corresponding spending cut isn’t really a tax cut at all, because the way that money is appropriated has just changed. Instead of direct taxation, now you’ll have inflation or they’ll take on debt.

[hayekianxyz]

@nirgrahamUK

if a free trade agreement goes on for many many many pages rather than simply declaring, i promise not to subsidize/tax/license/interefere with trade going in or out of our two countries X and Y , we sign below…

then that is a good indication that the trade being agreed to is not in fact ‘free’.

This is correct.

A free trade agreement can be summed up in a few words. In fact, no agreement is necessary. The fact is more than anything else they’re just another way that the corporate fascists have tried to coopt the term capitalism and free trade.

[Sage]

“Free trade” agreements like NAFTA are actually government-managed trade agreements. Associating them with free trade is just a rhetorical trick. NAFTA is the opposite of free trade.

True free trade means no government involvement whatsoever. See this: The Case for Free Trade.