Bill Carmichael in an op ed piece in today’s, The Australian promotes many of the right policies for sound government.

He suggests we should have a level playing field – though in citing business leaders in support of this he is being rather selective.

And he rails against the appalling anti-dumping arrangements that we have which we use as protectionist tools. Indeed, he is rather soft on this, saying the reversal of the onus of proof is the problem when the whole notion of dumping is as absurd as its incidence is absent. Remember, dumping is a mythical strategy of selling below costs, thereby knocking out rivals and recouping the losses in higher prices later. It’s as if there is only one source of supply and once it has gone others won’t be attracted by the high prices the vanquisher is setting. Many firms sell products below costs for some periods – we even find them giving away goods in promotions.

Bill then lashes out at the government’s bilateral trade policy liberalisations. There are three ways to get increased trade liberalisation: the Hong Kong way of unilateral opening up of the economy; the GATT/WTO method of internationally agreed tariff disarmament; or bilaterally agreed tariff reductions.

The second two both suffer from an inconsistency which says “we will reduce the barriers that raise our costs if you also do so”. Nonetheless, the outcome has been reasonably good with tariff barriers all but eliminated across the developed world on minerals and manufactured goods. No other country has followed the path of righteousness blazed by Hong Kong – that’s the politics.

Clearly the multilateral path to freer trade has ground to a halt. Agriculture is too difficult for the EU, Japan and for the developing world – it is even too difficult for the US. Bilateral free trade treaties like those with Korea, the US, Japan, China and prospectively India have allowed benefits of liberalisation by the time-honoured measures used multilaterally. They seem to be easier ways to close the deals.

Semi-purists in the past have opposed the bilateral approach because it might result in “trade diversion” locking out the most efficient producer and getting second best. So it might, though Bill Carmichael, in his latest piece, seems to be reconciled to the bilateral approach. But he takes issue with the semi-secrecy with which priorities are assigned. His concerns are misplaced – if we are to conduct negotiations to get a trade agreement, as is the case with other international agreements (or commercial agreements for that matter), some measure of tactical discretion is probably inevitable. It is not as though the government would be ignorant of the various potentials without formally asking for advice.