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free trade

CanadaQueenStampRemember when Canada was regarded as the high-tax, big-government country, and we weren’t? How times have changed. Burger King is considering becoming Canadian through a tax inversion deal with donut chain Tim Horton’s, aware that north of the border “corporate tax rates are as much as 15 percentage points lower than in the United States,” in the words of Daniel Ikenson at Cato, who writes: “If the acquisition comes to fruition and ultimately involves a corporate ‘inversion,’ consider it not a problem, but a symptom of a problem. The real problem is that U.S. policymakers inadequately grasp BurgerStamp that we live in a globalized economy, where capital is mobile and products and services can be produced and delivered almost anywhere in the world, and where value is created by efficiently combining inputs and processes from multiple countries. Globalization means that public policies are on trial and that policymakers have to get off their duffs and compete with most every other country in the world to attract investment, which flows to the jurisdictions where it is most productive and, crucially, most welcome to be put to productive use.” And the fact is that the United States, once the domicile of choice for international business, has slipped badly down the ratings of how difficult it is to do business in various countries. Policymakers “should repair the incentives that drive capital away from the United States.” Full post here. More: Stephen Bainbridge.

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As the war on musical instruments continues [The Jazz Line; earlier here, etc.]

The feds’ insane war on antiques and musical instruments continues. “Orchestra spokesman Adèl Tossenberger said in an e-mail that the seized bows did not contain any ivory and the orchestra received a certificate from a Hungarian expert verifying this.” It is unclear why they had to pay a $525 fine anyway. A few days earlier, according to a German publication, “the Munich Philharmonic nearly cancelled three performances at Carnegie Hall in April after that orchestra’s string players could not produce CITES certificates for their bows.” [WQXR, The Violin Channel] Earlier on the old-ivory ban here, here, and here; on musical instruments here, here, and here.

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“As part of trade talks, the European Union wants to ban the use of European names like Parmesan, feta and Gorgonzola on cheese made in the United States.” Having achieved some success in negotiations with Canada and Central American nations, Europe may seek to restrict marketing of U.S.-made cheeses such as Asiago, fontina, Muenster, and Neufchatel.

And it may not be just cheese. Other products could include bologna, Black Forest ham, Greek yogurt, Valencia oranges and prosciutto, among other foods.

No word on renaming French fries. [AP]

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Because of the 1920 law, backed by labor unions and U.S.-flag maritime interests, it’s infeasible to ship propane directly from Texas to the Northeast, so instead Texas ships sail to Europe and other ships sail back with propane for Northeastern customers. [Bloomberg News; earlier on road salt]

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Jones Act strikes again

by Walter Olson on February 18, 2014

Now the 1920 protectionist maritime legislation is “holding up crucial salt supply for New Jersey highways.” Getting a 40,000-ton shipment of rock salt from a port in Maine “to Port Newark has been frustratingly slow because of the state’s inability so far to obtain a federal waiver of the 1920 Maritime Act, which requires that the shipment arrive on a vessel flying a U.S. flag.” [NorthJersey.com] Update: looks they’ll get salt. More: Dan Lewis, Now I Know (“cabotage”).

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What do our border control authorities have against musical instruments? First it was pianist Kristian Zimerman’s Steinway, destroyed by TSA agents because they thought the glue in it smelled suspicious. Then it was the prized cello bow that Alban Gerhardt says was snapped in two by TSA agents (bows are surprisingly costly things, and can run the price of a Mercedes). Now, according to a report in the Boston Globe, customs agents mistook a rare collection of handmade flutes for pieces of bamboo and destroyed them as illicit agricultural goods. I’ve got a discussion at Cato at Liberty.

Cato trade analyst Dan Ikenson draws my attention to this passage of Frederic Bastiat’s:

Between Paris and Brussels obstacles of many kinds exist. First of all, there is distance, which entails loss of time, and we must either submit to this ourselves, or pay another to submit to it. Then come rivers, marshes, accidents, bad roads, which are so many difficulties to be surmounted. We succeed in building bridges, in forming roads, and making them smoother by pavements, iron rails, etc. But all this is costly, and the commodity must be made to bear the cost. Then there are robbers who infest the roads, and a body of police must be kept up, etc.

Now, among these obstacles there is one which we have ourselves set up, and at no little cost, too, between Brussels and Paris. There are men who lie in ambuscade along the frontier, armed to the teeth, and whose business it is to throw difficulties in the way of transporting merchandise from the one country to the other. They are called Customhouse officers, and they act in precisely the same way as ruts and bad roads.

Further update from Foreign Policy (h/t reader JohnC): “In an e-mail exchange with NPR Music, a Customs official says no musical instruments were involved in the CPB’s actions — a claim not offered to FP. The story indicates that fresh bamboo was found in the luggage separate from Razgui’s 11 flutes. However, when American Airlines eventually delivered Razgui’s luggage, it did not contain the flutes. If both claims are true, it remains a mystery as to what actually happened to the flutes and why they didn’t show up in his luggage.” (& Greenfield, Above the Law) More: Zenon Evans, Reason.

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“The vices of the rich and great are mistaken for error; and those of the poor and lowly, for crimes.” (attributed to the Countess of Blessington) The main scientific reason (if it can be called that) cited by the Food and Drug Administration seems to be that adding menthol makes smoking more enjoyable to many users, leading to readier “initiation of the smoking habit.” [Atlantic Wire] In addition, the World Trade Organization ruled last year that it was an arbitrary trade restriction for the United States to have banned clove-flavored cigarettes of the sort formerly imported from Indonesia, as Congress did in the Tobacco Control Act of 2009, without also banning menthol-flavored cigarettes. [Jakarta Post]

More: Get ready for a huge boost to the already-thriving cigarette-smuggling business should the plan go through [ACSH] And from Arthur Caplan at Time: “Antismoking Advocates Have Misused Science.”

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An old story, alas

by Walter Olson on July 17, 2013

Groups that hold themselves out as representing the interests of consumers don’t tend to represent actual consumers’ interest in free trade [Sallie James]

The Jones Act, which forbids coastwise trade in goods or passengers between American ports except in U.S.-made, U.S.-staffed, U.S.-owned vessels, has developed into a quintessential special interest law. It’s why Maryland and Virginia “bring in road salt from Chile rather than Ohio;” why Jacksonville, Fla. relies on coal from Colombia rather than U.S. sources; and why the economies of Hawaii, Puerto Rico and Guam are perpetually hobbled by high input costs. [Malia Blom Hill, Capital Research Center] Does it at least strengthen U.S. defense by preserving a defense-relevant merchant marine sector? The signs on that aren’t good either. [Eftychis John Gregos-Mourginakis and Joshua Jacobs, NRO; followup]

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Should the feds be trying to seize the 46-foot sailboat Janice Ann? [John Ross, Daily Caller]

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The Supreme Court ruled that the first-sale doctrine of copyright law protects the rights of someone who buys books abroad for resale here, whether or not the publisher approves. [Kirtsaeng v. John Wiley & Sons: Joe Mullin/Ars Technica, SCOTUSBlog, Margot Kaminski/Concur Op ("this is all statutory interpretation" and subject to change by Congress; conflict with existing international trade agreements), earlier here and here] More: Chris Newman.

Tim Carney is glad to see the New York Times returning repeatedly to this theme [Washington Examiner]

Not entirely unrelated, a video from the Institute for Humane Studies on how regulation contributes to the widespread use of corn sweeteners in place of sugar in our food supply (“Why Is There Corn In Your Coke?” with Diana Thomas):

“There are many potential reasons, but a big one is a very simple regulation defining the volume of bottles legally permitted in the American market.” Our regulators allow the sale of alcoholic beverages in 750 ml bottles, but not in the 700 ml bottles standard elsewhere. So unless a foreign maker perceives enough potential in the U.S. market to set up a special production run with the required bottle size, its wares are unlikely to reach our shores. [Jacob Grier]

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The foreign policy debate

by Walter Olson on October 23, 2012

A few selected tweets:

And about the last debate:

Politics roundup

by Walter Olson on September 7, 2012

  • “Someone tell Gov O’Malley that Swiss bank UBS is helping build a Maryland bridge.” [background; State of Maryland, PDF, via Dan Alban] Dems’ trade xenophobia escapes ire aimed at GOP’s purported immigration xenophobia [Barro] “Buried in the 2012 Democratic platform: Official declaration of war on Switzerland.” [@daveweigel]
  • Are you better off than you were four years ago? Kyle Graham traces that question back to 1900, and no doubt it’s older [ConcurOp]
  • Fact-checkers snooze during Dems’ Lilly Ledbetter show [Ted Frank/PoL, Hans Bader/Examiner] Read in full context, Obama’s “you didn’t build that” remarks “would inspire largely the same reaction.” [Larimore, Slate]
  • Former Florida Gov. Charlie Crist is least surprising Dem endorser of the year, as Overlawyered readers have reason to know [Betsy Woodruff, NRO, on Morgan & Morgan connection]
  • Great Society legacy: tax-funded nonprofits play key role in NYC corruption [Steven Malanga, WSJ]
  • “Details of the Auto Bailout You Won’t Hear in Charlotte” [Dan Ikenson, Randal O'Toole, Cato; Tim Carney, Washington Examiner ("Here’s the truth: what Romney proposed for Detroit was more or less what Obama did"); Shikha Dalmia on Gov. Jennifer Granholm]
  • HHS welfare waivers: fact-checkers, check thyselves [Kaus, more, Steve Chapman]

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Following a worldwide outcry, Argentina has promised to lift restrictions on the importation of foreign books, which had purportedly been based on fear of dangerous lead content in the ink. According to a report by my Cato colleague Juan Carlos Hidalgo:

“If you put your finger in your mouth after paging through a book, that can be dangerous,” said Juan Carlos Sacco, the vice-president of an industrialist organization that supports the measure.

MercoPress carries reporting in English translation on the original measure and on the promised reversal. Under the rule of President Cristina Fernandez, the Argentine government has taken a number of steps considered hostile to press critics, including controls on the newsprint business, and criminal charges against economists who report that prices are rising faster than the official inflation index.

Where did the Argentine officials get the idea that lead in book inks might be enough of a public health problem to justify drastic government action? Maybe from the U.S. Congress. As I explained in this City Journal piece, the notoriously extreme and poorly drafted 2008 CPSIA law imposed across-the-board requirements for lead testing of older children’s products, with the result that, according to guidance from the U.S. Consumer Product Safety Commission, it was considered doubtfully lawful to sell or distribute most pre-1985 books for children. That set of restrictions was eventually relaxed, following a massive outcry from dealers, publishers, libraries and lovers of children’s books.

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