March 16, 2015 8:50AM

Regulatory Capture of Trade Agreements

This is from Ezra Klein:

I’m skeptical of the sheer size of modern trade deals and the opaque process that creates them. The negotiation process isn’t quite as secretive as some think — the congressional briefings are constant, and the advisory committees are sprawling — but it is insanely complex.

The result is that even where there is transparency, it’s a form of transparency that can only really be navigated by politically sophisticated, highly motivated actors — which is to say it’s a form of transparency that quickly becomes a venue for lobbying. That’s one reason these deals end up including so much … stuff. The process is constructed in such a way that the negotiators get a lot of special pleading from individual industries and interests. Responding to those requests feels like responding to the public, but it isn’t, and it leads to deals jam‐​packed with individual provisions that look a lot like giveaways.

This is a great insight about modern trade agreements. It’s important to think of a trade agreement as just another piece of legislation. In the past, trade agreements focused mainly on tariffs. Now they govern a wide range of policies (“stuff”), and as a result they are susceptible to regulatory capture. Special interest groups see them as just another way to achieve their political goals. What this means is, as with any piece of legislation, don’t be fooled by the marketing. Look closely at all the details.