Christmas Trees and Lawyers

Sympathy for the Brexit supporters who voted to leave

By Diane Smith

It’s hard to find a regulatory attorney out here in rural and small town America. Professionals who can skillfully influence or interpret local, state, or federal regulations are rare outside state capitols. It often surprises my city friends when I point this out. Seriously.

Maybe that’s one of the reasons I’m sympathetic to the Brexit voters who voted to leave. It’s probably tough to believe that European Union rules and regs numbering in the tens of thousands of pages are fair to small companies and small town residents with little access to high-priced regulatory advisors, lobbyists, or other types of government influencers (think big donors). It’s a similarity with the U.S. I think is worth some attention.

The North American Free Trade Agreement (NAFTA) is over to 1,700 pages long. It includes almost 1,000 pages of annexes, footnotes, and explanations. Here’s an example (in case you have trouble sleeping tonight):

“Subject to paragraphs 2 through 5 and during the transition period only, if, as a result of the reduction or elimination of a duty provided for in this Agreement, a textile or apparel good originating in the territory of a Party, or a good that has been integrated in the GATT pursuant to a commitment undertaken by a Party under any successor agreement to the Multifiber Arrangement and entered under a tariff preference level set out in Appendix 6, is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof to a domestic industry producing a like …” or ZZZZZ …

Whoa, waking up now. So, does anybody actually think it takes 1,700 pages to produce a fair free trade agreement? Of course not. Just about everyone has figured out that lots of those pages represent the various homefield advantages that each country and each country’s companies – at least those with the resources to influence the outcome – managed to insert into these agreements.

Folks are always shocked when I remind them that the 1996 Telecom Act came in at under 150 pages and unleashed unprecedented innovation and economic growth. Yet, in the last 15 years, 1,000-plus pages of laws and regulatory impositions are pretty common, but haven’t spurred much innovation or job creating growth. Hmmm.

In Congress, there’s a term for legislation with lots of special interest provisions. It’s called a “Christmas Tree,” because lobbyists decorate the tree with their amendments. These Christmas tree provisions rarely benefit super small businesses or rural and small town citizens. Even after we figure out what they mean. And then we have to find a regulatory attorney to help us figure out compliance. Often from a big city. You get the picture. Pretty troubling isn’t it?

Diane Smith is the founder and CEO of American Rural.

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