Why free trade agreements don’t really deliver free trade


As officials last week approached what they hoped would be the final week of negotiations of a Pacific Rim trade deal involving nearly 40% of the world’s economy, one of the most contentious issues between the U.S. and Japan turned out to be the handling of the 25% U.S. tariff on pick-ups and SUVs. Since the weighted average American tariff on industrial products is 1.5% on industrial products, one might think that there was some scientific or policy reason that exists for high protection on these very popular vehicles.

Actually, that high tariff stems from a spat that took place 50 years ago. When the European Common Market was being formed in the 1960s, it restricted imports of chicken from America, and could not be convinced to budge of the new high protection, there ensued the so-called “Chicken War.” To even the score for the fact that chickens from…

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