Rodrik comments
Economists have a tendency to associate "free trade agreements" all too closely with "free trade." They may be unaware of some of the new (and often problematic) beyond-the-border features of current trade agreements. As trade agreements have evolved and gone beyond import tariffs and quotas into regulatory rules and harmonization—intellectual property, health and safety rules, labor standards, investment measures, investor-state dispute settlement procedures, and others—they have become harder to fit into received economic theory. It is possible that rather than neutralizing the protectionists, trade agreements may empower a different set of rent-seeking interests and politically well-connected firms—international banks, pharmaceutical companies, and multinational firms. Trade agreements could still result in freer, mutually beneficial trade, through exchange of market access. They could result in the global upgrading of regulations and standards, for labor, say, or the environment. But they could also produce purely redistributive outcomes under the guise of "freer trade." As trade agreements become less about tariffs and nontariff barriers at the border and more about domestic rules and regulations, economists might do well to worry more about the latter possibility.Last week the ACCC announced that the Federal Court found training college Cornerstone Investments Aust Pty Ltd, trading as Empower Institute (Empower), had in unconscionable and misleading or deceptive conduct, and made false or misleading representations when enrolling consumers into VET FEE-HELP Diploma courses that cost up to $15,000 per course.
Empower marketed and sold these courses to consumers in remote communities and low socio-economic areas (including Indigenous communities) using face-to-face marketing, including door-to-door sales.
Empower enrolled over 6,000 new students in its courses March 2014 and October 2015.
Many of these students were vulnerable consumers and were signed up using incentives such as free laptops and cash, unaware they were incurring a significant debt.
“Empower misled vulnerable and disadvantaged consumers into enrolling in courses they would likely be unable to complete. Many consumers it enrolled had poor literacy and numeracy skills. Some who enrolled in online courses could not even use a computer and did not have access to the internet,” ACCC Chair Rod Sims said.
“Empower also failed to provide clear and accurate information about the price of the courses and the nature of the VET FEE-HELP loan.” ...
“Empower was paid more than $64 million by the Government under the VET FEE-HELP scheme for enrolling students using these appalling tactics, while the students were left with large debts."The ACCC is seeking remedies from Empower, including redress for affected consumers and pecuniary penalties.
The ACCC notes that it has taken action against a number of private colleges and can seek remedies from the court in those cases, but cannot itself, cancel the debts of affected consumers.
