Many consider Michael Reddell, the writer of the Croaking Cassandra blog, as an eccentric provocateur. Maybe. But he is also a good economist and his judgments should be reflected upon, especially in his area of expertise in macroeconomic and monetary policy, and financial regulatory matters.

Even so, I have considerable reservations over his recent A Free Trader Critiques the CPTPP. It is doubly interesting because Reddell rightly describes himself as pro-free trade. (I am always uneasy about the term ‘free trade’, but you know what it means.) Should not a pro-free trader support a free trade deal? The correct answer is ‘not always’.

Reddell particularly cites the Australian-US FTA (AUSFTA) which is widely thought to be a bad deal for Australia. Its Prime Minister, John Howard, staked his reputation on obtaining one. The US negotiators, knowing this, offered a deal which was in their interests but for which there was little for Australia. Howard was so committed he could not politically back out.

(This is the reason I am reluctant for us to do a bilateral free trade deal with the US; we have so little leverage and were we as enthusiastic as Australia we would be screwed too.)

Continue to read the full article on newsroom.co.nz   ||  January 30, 2018   |||