thank you

Problem 2 (5 pts). This question focuses on the article "Trussed but verify" (Economist, May 29, 2021). The article is available on Canvas. a) Briefly explain what is meant by Olson's theory of interest groups. (1 pt) b) The article discusses a (potential) trade deal between the UK and Australia. What is the deal about? Who will benefit/lose if the free trade agreement is realized? Briefly summarize. 5-10 sentences are expected. (2 pts) c) Use Olson's theory of interest groups to explain why there is opposition against the free trade agreement in the UK. 5-10 sentences are expected. (2 pts)22 Britain The Economist May 29th 2021 subscription to both Netflix and Disney+, Free-trade deals ported some 560 tonnes of beef and veal with money left over for popcorn. But the from Australia. Were that number to rise BBC is limited to about 25m fee-paying Trussed but verify tenfold, as Australian producers hope, it households and cannot borrow. Streaming would still be less than 3% of more than companies have the world to fish in-Net- 200,000 tonnes imported from the EU flix has over zoom subscribers, Disney+ each year. Ms Truss also promises a 15-year 1oom-and are willing to lose money for transition before tariffs and quotas are lift- years in the pursuit of market share. Whereas the BBC commissioned $2.8bn of Rows over a trade deal with Australia ed in full. A more justifiable fear for British farmers, suggests Sam Lowe of the Centre content in 2020, Netflix and Disney+ have show a need for greater transparency for European Reform, a think-tank, is that a combined budget this year of more than CABINET SPLITS always excite Westmin- the deal becomes a model for bigger future $20bn. Amazon recently earmarked nearly ster. So it proved after the Financial ones with Latin America and the United half a billion dollars for a single "Lord of Times reported a bust-up between Liz States. Yet such deals are far off and could the Rings" series. Truss, the trade secretary, and George Eus- be debated on their merits. Commercial media outfits are rushing tice, the environment secretary, over a The argument has revealed the absence to bulk up. WarnerMedia, creator of "Game planned free-trade deal with Australia. At of a trade strategy. Brexiteers say they want of Thrones", "Harry Potter" and other hits, issue was Ms Truss's desire to offer Austra- free trade everywhere. Yet they remain has announced plans to merge with Dis- lian beef-producers unlimited tariff- and shtum about the barriers erected with Brit- covery. France's largest and third-largest quota-free access to the British market, up- ain's biggest trading partner, the EU. Al- channels, TF1 and M6, will also try to setting Mr Eustice's farmers. Minette Bat- most all the trade deals done by Ms Truss so merge, to provide une reponse francaise to ters, president of the National Farmers' far have been rollovers of those formerly in the Americans. The BBC has teamed up Union, said such an agreement would place through Britain's EU membership. with ITV, Britain's biggest commercial throw British family farms "under a bus". Australia would be the first significant new broadcaster, to run BritBox, an interna- Boris Johnson eventually came down on one. But why is the focus of such deals so tional streaming service. With 2.6m sub- Ms Truss's side after invoking the free- much on farming (or in some cases fish), scribers it is a minnow. trade heritage of another Conservative which are tiny shares of a GDP that is 80% prime minister, Robert Peel. composed of services? How is Britain going The last stronghold The prime minister is right to have to lead the charge towards greater liberal- No big streamer does news, an area where done so. Brexit has created an opportunity isation of services trade around the world? the BBC remains strong. Last year 70% of to escape the European Union's costly sys- Indeed, argues David Henig of ECIPE, a Britons with internet access said they had tem of farm protection (see Charlemagne) think-tank focused on trade, it seems as if absorbed its reports in one medium or an- and to strike more adventurous trade deals the only post-Brexit strategy is to sign free- other during the past week, according to with third countries. The Australians in- trade deals as quickly as possible. That fos- the Reuters Institute at Oxford University; sisted on far more generous access for beef ters a sense of desperation, which puts among 18- to 24-year-olds the figure was and lamb as the price of any agreement. Britain in a weak bargaining position 51%. This represents a drop since 2015, And, as Ms Truss asked rhetorically: if Brit- against some of the world's toughest nego- when 79% of all adults and 68% of young ain cannot strike a free-trade deal with an tiators. The latest deal appears to be of people tuned in. But the BBC remains "un- old friend like Australia, who can it do greater benefit to Australia than it is to Brit- doubtedly, and by a massive margin" the deals with? ain. Just wait for the battle that is likely main source of news in Britain, says Ras- For all the noisy opposition of farmers with the Americans, who take no prisoners mus Nielsen of the Reuters Institute. (especially in Northern Ireland, Scotland in trade talks.The corporation is at least stronger than and Wales) the quantities involved are That points to another concern over the other national broadcasters, which have small. Ms Truss's trade department esti- deal: the lack of transparency in negotiat- seen similar declines in reach. Fully 86% of mates that the entire deal with Australia ing it. Public support for free trade is often Britons say they are satisfied with their would add a maximum of just 0.02% to fragile, because producers who lose out public-service media, versus between 50% GDP in the long term. Last year Britain im- shout louder than consumers who gain. and 61% of French, German, Spanish and Protests from special interests, greens and Italian viewers. For all his complaining others have often sunk free-trade negotia- about the BBC, "Boris is intelligent enough tions, ranging from Seattle in 1999 through to see that shutting it down would back- Doha in 2008 to a planned transatlantic fire," says one senior Tory. The elderly, who trade and investment partnership in 2016. make up the core of the Conservative vote, Yet the British government conducts its remain BBC addicts. And Mr Johnson's negotiations, including those affecting healthy poll ratings mean he owes no fa- controversial food-safety standards, large- vours to Mr Murdoch, who has long lob- ly in secret. Parliamentary scrutiny is al- bied for the corporation to be trimmed. lowed only after trade deals are signed. Still, as the variety of entertainment The risk of this triggering a popular from streamers grows, a compulsory levy backlash against freer trade is all the great- to fund comedy, drama and the like looks er because of the government's reputation. odd. In the age of linear viewing, public- Ms Batters's adverse reaction to the Austra- service broadcasters had to combine news lian trade deal was so strong partly because with lighter fare to get people to tune in. she claims that Mr Johnson promised he The on-demand era has decoupled the two, would die rather than sell farmers down making it harder to argue that everyone the river in order to secure trade deals. She should pay for "Strictly Come Dancing". Ex- is not the first, and will not be the last, to pect a smaller, newsier BBC in future-and discover that the prime minister has a hab- direct the blame, or credit, not to Westmin- it of making promises that he does not in- ster but to Hollywood. " Power steering tend to keep. "