Future of Trade

Dani Rodrik suggests that “the best way to save globalization is to not push it too far.” A lack of global leadership, the tendency for globalization to produce macroeconomic imbalances, and impending stagnation in the G3 economies, suggest that openness in trade and finance will continue to be limited. Trying too hard may back-fire.

http://www.koreatimes.co.kr/www/news/opinon/2009/06/137_46778.html

In reading his (rather linear) piece though, I’m reminded of the quote that “we always over-estimate the changes that may occur in the short run, but under-estimate what may happen in the long run.”

You may all have seen this, but here is a compilation of short essays mostly revolving around trade and global trade governance.

I haven’t read them all, and some of the ones I’ve read haven’t resonated that much with me, but there are some useful insights sprinkled in there.  One of my favourite essays is this one, which builds into the meta-question we talked about yesterday – the one that challenges the primacy of trade, our “trade-above-all” position.

The point that Tandon makes about the salience of power and how the West has been able to define the terms with which we view trade is interesting in the possibilities it throws up.  Perhaps one of the issues we ought to look at is the definition of tradable commodities and this idea of the value chain.  Who decides what gets commoditised and what is a “higher value-add” product or service? This has historically been defined by the West and the theory of comparative advantage.  Is this landscape going to shift in the future? Certainly the fallout from any food crisis would be instructive here.

Thoughts welcomed.