“Government shouldn’t pick winners and losers” is an idea frequently expressed by Tom Reed.
Are bilateral trade agreements better than general trade agreements? Can the United States extract important concessions by bargaining with other countries individually as the Trump Administration believes?
The idea that the United States can extract concessions from other countries by leaning on them individually sounds good. Probably it is true, if extracting concessions is the goal. Such agreements might seem like a win-win: both sides get some valued benefit. There might be winners, but consumers in both countries will lose.
For example, if a trade deal allows Mexico to export auto parts at inflated prices and requires Mexico to buy US made steel at above market prices, Mexican manufacturers and US Steel makers may win while consumers in both countries lose.
Such deals are antithetical to free trade. Free trade promotes efficiency which benefits all. Bilateral trade deals are unlikely to reflect to economic principal; they simply pick winners and losers.
General trade agreements between nations are more likely to reflect important, mutually accepted principles to the benefit of both consumers and industries which are left free to compete unrestricted by barriers to trade.