Monday, March 29, 2004


Matthew Yglesias comments on the politics of trade are exactly right:

Nevertheless, I think the time may have passed quite a while ago when it ceased being especially productive for all us pro-trade folks to spend our time congratulating each other that we've mastered both the principle of comparative advantage and the fact that Indian (or Chinese) lives count in the analysis along with American ones...

What I'd really like to see is a smart article about how, in practice, to rebuild political support for trade. It seems to me that the WTO process has ceased to be effective. Public opposition to trade deals remains high, and developed world corporations have managed to smuggle a very large number of non-trade priorities onto the agenda, thus confusing the issue.

The key to winning support for free trade is job creation. Without the problem of unemployment, politicians will find it difficult to use trade as an issue and public opposistion to free trade will be much less.

It would also be nice if things not related the exchange of goods were not bundled up with discussions of free trade. Free trade is almost certainly good, while greater freedom for things like capital may very well be bad and be source of economic stability rather than prosperity. During the Cancun round of WTO talks the rich nations kept pushing for capital mobility instead of discussing actual trade issues which the poor countries cared about. Since the main political forces for liberalization in the First World are investors and large corporations, I am not sure how such a situation can be avoided but it is what needs to be done. Perhaps unions in certain industries, such as the automobile business, that have been hurt by protectionism might be induced to suppor free trade, at least when it doesn't hurt them. This might seem like a perverse divide and rule strategy, but if we can build pro-trade factions that go beyond the super-rich it will be for the best.


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