Free Trade Helps Families and Kids

Simon Crean has today released a report from the CIE showing that Australian families are $3900 a year better off thanks to trade liberalisation over the past couple of decades.

And in a reminder of barriers yet to fall, the ACT’s reforming education minister, Andrew Barr, is pushing for changes to the parallel importing regime, saying:

By making books artificially more expensive, this outdated and anti-competitive law is making it harder for kids, especially those from less well-off families to buy and read books.

It’s also making it harder for our school libraries to get as many books for their buck as they could.

Under the Education Revolution we are all working and investing millions to improve literacy and numeracy for kids from low-socioeconomic backgrounds in particular. Any law that makes books more expensive is bad law. Any law that means our school libraries have fewer books available to students is bad law. Any law that effectively makes it harder for kids to read is bad law.

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3 Responses to Free Trade Helps Families and Kids

  1. Simon says:

    I think this is really interesting — however, I think it’s worth noting that, if we are willing to believe CGE modelling with confidence, we probably don’t need economic betting markets, analysis of the employment effects of pork-barrelling, etc etc etc — we could just crunch it all through and rely on the results. I can’t help feeling that I would be more persuaded by a partial-equilibrium analysis of the consequences for particular markets for trade liberalisation in that market (eg cars, or TCF in particular). Still, an interesting report!

  2. Russell says:

    It’s not an interesting report – it’s a depressing report. Depressing that anything so simplistic passes for research, depressing that a government released it, instead of binning it. It reads as if a 15 year-old wrote it.

    It really is about time economists looked at the context of the figures they choose to string together to make a story with a conclusion. You can say, for example, that the dairy industry is much improved because there’s more quantity and more dollars, but howabout the sustainability of increased use of water resources and fertilizers, the problems of waste from large, intensively husbanded herds, the animal welfare issues, and so on and on. The level of one-eyed simplicity of this report makes it USELESS.

  3. Lincoln Fung says:

    Three points about this. First, there is an alternative to free trade that can help families and kids, as well as local writers and publishers if and assuming there is value in fostering local writers and publishers. Have a low tariff on imported books and use the income to subsidise those locals. As long as the tariff and subsidies can be right tuned, there should be a point where the national welfare is optimal.

    My second point is about partial or general equilibrium. Though partial is interesting in some areas and for some purposes, it is incomplete and misses the important links that general equilibrium is and has. So there may be case to have both general and partial equilibrium studies.

    Lastly, about Russell’s point. Russell seems to have made two points, the first one is the quality of that study is not good. For that I can’t comments, because I have not read that report. Russell’s second point is a more general one that I like to make a comment on. What Russell seems to suggest is that the report is not general enough and missed some important issues that should be included in that study. This may or may not correct. Any study has a focus and has its limitations, otherwise you can’t finish any study since there are always issues that could be related and not included. One has to define the most appropriate scope of a study, and include the most important and relevant issues and leaves some out. Russell would make a stronger and more pertinent point if he uses specific examples from the report. That would be more helpful.

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