Imagine that Australia signed a free-trade agreement that allowed it to export up to 100,000 cars a year to the United States. Those of us who are English speakers might ask how a quota of 100,000 cars amounts to "free-trade." Unfortunately, the NYT doesn't ask such questions. In touting the successes of outgoing Australian Prime Minister John Howard (he was defeated in an election over the weekend), the NYT reported that he signed a free-trade agreement with the United States and also won permission for as many as 10.500 professionals a year to enter the United States. In other words, the fact that a strict quota still exists on professionals, limited trade in professional services, does not seem to discourage the NYT from using the phrase "free-trade" to describe a trade agreement. Of course the agreement was not about free trade. In addition to not freeing all trade, it also increased some forms of protectionism, most notably copyright protection and patent protections on prescription drugs. It is striking that we can have such explicit barriers on the entry of professionals, thereby restricting foreign competition for doctors, lawyers, and other highly paid professionals, and no one calls it protectionism. It is also striking that none of the "free-trade" economists ever raises an issue about these restrictions. Where are the editorials denouncing these professionals as knuckle-scraping Neanderthals unable to compete in the global economy?
--Dean Baker
