THE NEXT TIME your trade minister announces that a "free trade deal" has been signed, we suggest you be wary. First, the deal will likely be a "preferential" one, meaning it will discriminate against nonmember countries. Second, the deal will likely exclude a range of sensitive items. How often, for example, has sugar been included in United States' trade deals or rice in Japan's? Third, the deal will be a gold mine for lobbyists and lawyers, and it will create a lot of employment for the bureaucrats who implement it. A lot of this has to do with complex "rules of origin," or ROOS, that determine whether a good or service qualifies as domestically or regionally produced. Fourth, business in general, and particularly small- and medium-sized companies (the ones governments proclaim they support), may not avail of the deal, owing to administrative complexities, or the slim margin between general (most-favored-nation, or MFN) and preferential tariff rates.
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