Termites in the trading system bhagwati

Termites in the Trading System by Jagdish Bhagwati - Commentary

 

termites in the trading system bhagwati

Jul 21,  · In "Termites in the Trading System," Mr. Bhagwati argues that not all trade deserves our equal support, however, and mounts a brisk and spirited attack on preferential, so-called "free trade" agreements that are, in his view, leading the world trading system odihirotav.cf: DOUGLAS A. IRWIN. Sep 17,  · Bhagwati also documents how PTAs have undermined the prospects for multilateral freeing of trade, serving as stumbling blocks, instead of building blocks, for the objective of reaching multilateral free trade. In short, Bhagwati cogently demonstrates why PTAs are Termites in the Trading System.3/5(3). He has written a book, Termites in the Trading System, to tell us why this is a problem, and why it must be surmounted. Bhagwati is perhaps the world’s leading economist on matters of global trade, and a tireless proponent of more of it.


Termites In The Trading System Bhagwati


AA - As the world economy integrates more tightly with every passing week, the global trading system becomes more and more critical to a future of prosperity. That system was developed essentially in the waning days of World War II. It had deepened the Great Depression and helped to bring about the most destructive war in history. Inresolving not to repeat this mistake, they formed, under American leadership, the General Agreement on Tariffs and Trade GATT to negotiate lower tariffs, eliminate non-tariff barriers to trade, and reduce market-distorting export subsidies.

Over the past half-century, in a remarkable series of eight negotiations, these barriers have been greatly reduced or eliminated, with tariffs falling by over 90 percent on average.

A ninth negotiation has been under way for several years to continue the process begun in The result, aided both by the near collapse thanks to the microprocessor of long-distance telecommunications costs and by a sharp decrease thanks to the cargo container in shipping costs, has been nothing short of spectacular.

Just sinceworld trade has increased by 88 percent. Trade—whether between international corporations exchanging billions in goods and services or two neighbors exchanging surplus garden tools— takes place only when both sides benefit. That is why an economy is not a zero-sum game: as we get and spend, wealth is created because each side values what it receives more than what it gives away.

Thus, although the exponentially expanding international trade of the last 60 years has caused much local economic disruption, on balance the world has become vastly richer. Much of its current economic travails, including the rapid run-up in the price of oil and farm products, is due to the spread not of poverty but of prosperity.

A PTA is a pact between two or more countries: a customs union, for example, in which the members adopt a common tariff policy toward countries outside the group, or a free-trade agreement in which trade barriers are altogether dismantled within the group itself. He has written a book, Termites in the Trading System, to tell us why this is a problem, and why it must be surmounted, termites in the trading system bhagwati.

Born and educated in India before continuing his studies at Cambridge University and MIT, termites in the trading system bhagwati, he is now a University Professor at Columbia and the author of the most important book on his subject, In Defense of Globalization At seventy-four, he is rich with professional honors and the accolades of his peers.

What is now Germany started out as a customs union of states after the end of the Napoleonic wars. The European Union began as a free-trade agreement for coal and steel among France, Germany, Italy, and the Benelux countries. While there were only a handful inby there were well over in operation around the globe. Most policymakers, at termites in the trading system bhagwati nominally, have been in favor of free trade for decades.

But some, Bhagwati writes, are under the illusion that if free trade is good, then any free-trade agreement, whatever its implications for the world at large, must be good as well. As Bhagwati notes, free-trade agreements and termites in the trading system bhagwati unions always include mechanisms for enforcement and settling disputes, and these invariably come with fancy titles.

As anyone who has dealt with government knows, such status symbols can be powerful drivers of official action. One major problem, according to Bhagwati, is that they distort economic decision-making. Instead of trade going to the country with the biggest comparative advantage, and thus the lowest prices, it tends to go to the country that has the biggest comparative advantage within the closed world of the PTA, thus propping up inefficient industries by insulating them from competition from elsewhere.

How to keep track of all this? What to do about any of this? After all, termites in the trading system bhagwati, what would be the point of having a preferential trade deal with one country if all countries were already trading freely? A blessedly brief book, Termites in the Trading System demonstrates a truth all too often forgotten or ignored in these termites in the trading system bhagwati of computer-aided writing: namely, that the importance of a work cannot be measured simply by its length.

Above all, Baghwati remains fully aware that the real world in which politicians operate is the one that economists must constantly consider in tendering their theoretical advice—that is, if they want the advice to be worth anything. For this alone, it is always a deeply instructive pleasure to read him, as Termites in the Trading System reminds us once again.

 

 

termites in the trading system bhagwati

 

Jagdish Bhagwati, the internationally renowned economist who uniquely combines a reputation as the leading scholar of international trade with a substantial presence in public policy on the important issues of the day, shines here a critical light on Preferential Trade Agreements, revealing how the rapid spread of PTAs endangers the world trading system. He has written a book, Termites in the Trading System, to tell us why this is a problem, and why it must be surmounted. Bhagwati is perhaps the world’s leading economist on matters of global trade, and a tireless proponent of more of it. In short, Bhagwati cogently demonstrates why PTAs are Termites in the Trading odihirotav.cf reason for a possible change of hart is a reading of Jagdish Bhagwatis latest book Termites in the Trading System: How Preferential Agreements Undermine Free Trade.