Saturday, July 2, 2016

Cato Trade Scholars Endorse the Trans-Pacific Partnership

By Daniel J. Ikenson of Cato. Excerpt:
"Here is an abstract of the forthcoming paper, which includes our chapter-by-chapter scores, various averages of those scores, an explanation of methodology, and summaries of our scoring rationale for each graded chapter.  But here are some bullets:
  • We graded 22 of 30 chapters (8 did not lend themselves to this kind of evaluation) on a scale of 0 (protectionist) to 10 (free trade) – with 5 meaning the chapter would have a neutral impact.  
  • Chapters earning scores above 5 are considered “net liberalizing,” and those graded below 5 are considered “net restrictive.”
  • 15 of 22 chapters received scores above 5.
  • 5 of 22 chapters received scores below 5.
  • 2 of 22 chapters received neutral scores of 5.
  • The highest score assigned was 8 and it was assigned to 5 chapters.
  • The lowest score assigned was 3 and it was assigned to 3 chapters.
  • The median and mode scores were both 6.
  • The straight average score was 5.82 (but this measure assigns every chapter the same weight, which doesn’t make sense to do).
  • The average for “market access” oriented chapters was 6.18.
  • The average for “rules and governance” oriented chapter was 5.45.
  • The average for “First Tier” chapters (those that have to most bearing on the quality of the agreement) was 6.63.
  • The average for “Second Tier” chapters was 5.36.
  • The weighted average (where twice as much weight is assigned to First Tier chapters) was 6.03
Obviously, not everything in a free trade agreement is going to be to the liking of free traders. Some issues simply don’t belong in trade agreements.  But in our view every little bit of liberalization helps, and as long at it doesn’t come at a cost that exceeds the benefits, it is worthy of support. The bottom line is that, in our assessment, the TPP would be net liberalizing – it would, on par, increase our economic freedoms.  I hope it will be ratified and implemented as soon as possible."

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