Making trade work

[San Siro]

Ecco un articolo apparso sul Guardian che sintetizza tre libri apparsi di recente sulla logica degli accordi commerciali.
La parte in cui tratta il secondo libro, quello di Rodrik, è la più interessante, e riassume molto bene il problema delle politiche commerciali dal punto di vista di un paese a basso reddito.
Il libro di Rodrik, fra parentesi, è uno dei massimi contributi alla comprensione dei problemi dello sviluppo (inteso come decollo, take off) economico.

Making trade work

Barack Obama's stance on free trade is in line with reputable economists who argue that it hinders development

Kevin Gallagher
guardian.co.uk,
Friday October 10 2008 19.30 BST

Recent work by leading economists suggests that a new consensus is emerging on free trade agreements. Gone is the doctrine of the Washington consensus which preached signing trade deals with any nation that is willing. A narrow but significant accord is emerging that says smaller regional and bilateral trade agreements are bad for the world economy. Perhaps then, Senator Barack Obama's call to rethink deals like Nafta is not so protectionist but really in line with contemporary economic thinking.

One of the world's most well-known trade economists is Jagdish Bhagwati of Columbia University. In the early part of his career he spawned technical innovations to trade theory that are taught in any serious textbook of international economics. In recent decades he has served as free trade's champion in accessible books and short articles.

His recent book, Termites of the Trading System: How Preferential Agreements Undermine Free Trade, came as a shock to those who count him as an academic ally in the campaign for free trade. Bhagwati argues that trade deals like Nafta or the pending US-Colombia Free Trade Agreement are "termites" that are eroding the world trading system and world economy.

Why are these deals so bad? Bhagwati shows that they divert trade away from those nations with a true comparative advantage. Such advantages occur when every nation produces and exports from those sectors where their mix of land, labor and capital is most abundant. Liberalising tariffs and other barriers then means producers get access to more markets, and consumers have better choices and lower prices.

In this scenario all nations benefit because they produce where they have a comparative advantage. Throw in these small trade deals and all of a sudden we are buying shirts from countries like Honduras rather than from China and Mexico where they can be produced more efficiently and come at a lower price. The crux of Bhagwati's argument is that foregoing those lower prices costs us in terms of "trade diversion". Indeed, the World Bank's 2005 Global Economic Prospects puts the price of trade diversion due to deals like Nafta between $115bn and $150bn on an annual basis.

Another of the more eminent global trade and development economists is Dani Rodrik of Harvard University. Rodrik and Bhagwati often disagree, but Rodrik's new book: One Economy, Many Recipes: Globalisation, Institutions, and Economic Growth, also argues that many trade agreements are out of whack with economic theory - albeit from a different vantage point.

According to Rodrik, many nations are stuck with a comparative advantage today that will keep them in poverty for a long time. Nations that grow the most over time exhibit a diversity of products for export and production. However, market failures make it difficult for poorer countries to diversify their economies and gain dynamic comparative advantage. Government policy is needed to help spur the diversification process. Many trade deals choke the ability of nations to deploy the proper policies for long-run development.

Developing countries often look at the example of the US and European economies, and more recently, the economies of South Korea and China. Such nations moved into the global marketplace slowly and strategically, protecting their major exporting industries in order to nurture them into world markets. Rodrik shows that nations have trouble doing this under the WTO and an even harder time under deals like Nafta.

If economists say these agreements are so bad, why do so many countries sign them? Indeed, most Latin American countries line up to sign trade agreements with the US. A new book, The Political Economy of Hemispheric Integration: Responding to Globalisation in the Americas, edited by Diego Sanchez Ancochea of Oxford University and Kenneth Shadlen of the London School of Economics, argues that rich countries have the market power to bully Latin Americans into the deals by aligning themselves with Latin American elites and the sectors that receive the short term benefits. It's the politics, stupid.

Senator Obama has said that when he is president he will rethink these agreements and make multilateralism the cornerstone of his foreign policy. Senator McCain has pledged to follow the Bush administration's fundamentalist fervor for free trade agreements, however small or irrelevant, and is out of touch with contemporary economic thinking.

Judging by these recent books from opposing sides of the trade debate, Senator Obama seems to have the economics right.