Justice and Trade

2012 ◽  
Author(s):  
Mathias Risse
Keyword(s):  
Human Rights ◽  
International Trade ◽  
Free Trade ◽  
Trade Barriers ◽  
Trade Theory ◽  
Principles Of Justice ◽  
Gains And Losses

This chapter examines what justice requires for international trade. It considers two problems: first, what follows about trade from the human rights–oriented principles already discussed, and second, whether any new and distinct principles of justice arise out of the fact that we live in a world of multiple states where there is trade across borders. Trade theory supports free trade: barriers like tariffs and quotas obstruct mutually beneficial transactions. Countries should undo them, even unilaterally. The chapter first asks whether there are any independent principles of justice having to do with the distribution of gains and losses from trade, both among and within states. It then explores the question of subsidies and what arguments are available in support of those who ask their government for subsidies. It also explains how talk about justice maps into talk about fairness.

scholarly journals International Trade Arising from Wage Differences

2009 ◽  
Vol 14 (Special Edition) ◽  
pp. 135-154
Author(s):  
Sikander Rahim
Keyword(s):  
International Trade ◽  
Free Trade ◽  
Industrial Policy ◽  
Industrial Development ◽  
High Wage ◽  
Trade Theory ◽  
Wage Differences ◽  
International Trade Theory

This paper analyzes how trade can develop between low and high wage countries when there is free trade and when there is protection. In particular, the paper focuses on Pakistani industrial development from the 1950’s and how standard international trade theory relies on specific assumptions about the nature of capital, which may not hold. This, in turn, has specific implications for industrial policy in low wage countries.

US national power and the post-war trading regime

2002 ◽  
Vol 1 (2) ◽  
pp. 153-170 ◽  
Author(s):  
JUDITH GOLDSTEIN ◽  
JOANNE GOWA
Keyword(s):  
International Trade ◽  
World War Ii ◽  
Free Trade ◽  
Dispute Settlement ◽  
The United States ◽  
Trade Theory ◽  
The World ◽  
Conventional Literature ◽  
Post War ◽  
Distribution Of Power

This essay examines the effect of power asymmetries and imperfect markets on US trade policy, two issues often neglected in the conventional literature. We suggest that when the distribution of power is skewed and markets do not conform to the world of standard trade theory, open international markets will not exist unless the disproportionately most powerful state can make a credible commitment to free trade. We suggest that these two conditions characterized the post-World War II trade environment and partially explain why the United States encouraged the formation of the postwar international trade regime. To demonstrate this argument, we examine the voting rules, dispute settlement procedures, and regional trading arrangements that characterized the three postwar trade organizations: the stillborn International Trade Organization, the General Agreement on Tariffs and Trade, and the World Trade Organization. We argue that the rules of these institutions empowered their member states to punish any US attempts to ‘cheat’. In so doing, it made free trade their welfare-maximizing strategy choice.

scholarly journals Is Free Trade Passé?

1987 ◽  
Vol 1 (2) ◽  
pp. 131-144 ◽  
Author(s):  
Paul R Krugman
Keyword(s):  
International Trade ◽  
Free Trade ◽  
Comparative Advantage ◽  
Imperfect Competition ◽  
Perfect Competition ◽  
Trade Theory ◽  
International Trade Theory ◽  
Export Subsidies ◽  
Good Policy ◽  
Import Restrictions

If there were an Economist's Creed, it would surely contain the affirmations “I understand the Principle of Comparative Advantage” and “I advocate Free Trade.” Yet the case for free trade is currently more in doubt than at any time since the 1817 publication of Ricardo's Principles of Political Economy, and this is due to changes that have recently taken place in the theory of international trade. While new developments in international trade theory may not yet be familiar to the profession at large, they have been substantial and radical. In the last ten years the traditional constant returns, perfect competition models of international trade have been supplemented and to some extent supplanted by a new breed of models that emphasizes increasing returns and imperfect competition. These new models call into doubt the extent to which actual trade can be explained by comparative advantage; they also open the possibility that government intervention in trade via import restrictions, export subsidies, and so on may under some circumstances be in the national interest after all. To preview this paper's conclusion: free trade is not passé, but it is an idea that has irretrievably lost its innocence. Its status has shifted from optimum to reasonable rule of thumb. There is still a case for free trade as a good policy, and as a useful target in the practical world of politics, but it can never again be asserted as the policy that economic theory tells us is always right.

scholarly journals Free Trade in Theory and Policy: Contemporary Challenges

2018 ◽  
Vol 7 (2) ◽  
pp. 13-35
Author(s):  
Daniel Nagel ◽  
Sorin Burnete
Keyword(s):  
International Trade ◽  
Free Trade ◽  
Comparative Advantage ◽  
Policy Instruments ◽  
Theoretical Models ◽  
Trade Theory ◽  
Common Parlance ◽  
Per Se ◽  
Foreign Competitors

Abstract Free trade denotes a state of international commercial relations premised on governments’ restraint from using policy instruments meant to favor indigenous industries against foreign competitors. According to the conventional trade theory advocated by classical and neo-classical thinkers, free trade makes little economic sense failing nations’ tendency to specialize based on comparative advantage, a concept with high persuasive influence despite the elapsing of time. Even though the comparative advantage rule has seldom been questioned per se, the free trade concept has been fiercely disputed and not infrequently, bashed. Nations’ involvement in international trade often follows patterns that do not fit theoretical models but attempt to respond to circumstantial interests, most often the need to protect poorly competitive industries. In common parlance, free trade has had both proponents and enemies.

Methodological approaches to determining the impact of barriers on international trade

2021 ◽  
pp. 713-727
Author(s):  
Diana Makayevna Madiyarova ◽  
Maxim Vladimirovich Terletskii
Keyword(s):  
International Trade ◽  
Foreign Trade ◽  
Trade Policy ◽  
Free Trade ◽  
Equilibrium Model ◽  
Econometric Models ◽  
Trade Barriers ◽  
Foreign Trade Policy ◽  
Methodological Approaches ◽  
The Impact

Today, within the framework of the functioning of foreign trade policy, there are two main opposing models: protectionism and free trade. Recently, the situation is developing towards the dominance of the policy of protectionism over the policy of conducting free trade, since there is a continuous increase in the number of non-tariff measures and the manifestation of trade wars. This situation leads to the need for a policy of trade liberalization. Implementing a foreign trade policy aimed at eliminating trade barriers is not a quick process and requires a thoughtful scientific assessment. To analyze the criticality of the situation of the absence of a free trade policy and to reflect its validity, a very wide methodological toolkit is used to study various kinds of trade barriers, ranging from the calculation of the simplest indicators to the construction of complex econometric models. This study provides a comprehensive review of the main methodological approaches to determining the impact of tariff and non-tariff barriers on the international trade activities of countries. In the scientific review work, 4 domestic and 24 foreign sources, formed on the basis of 21 resources, were involved in the search for literature. The results of the review analysis of research papers showed that in the study of tariff and non-tariff barriers, researchers mainly use three econometric models, namely gravity model, partial equilibrium model and general equilibrium model. In addition, the study of non-tariff barriers can be carried out in the context of two other methods besides the econometric one: the implementation of the "price gap" method and the derivation of "incidence indicators".

HARMONISING PUBLIC PROCUREMENT IN THE SADC

2014 ◽  
Vol 1 (1) ◽  
pp. 90-109
Author(s):  
Stephen De la Harpe
Keyword(s):  
International Trade ◽  
Free Trade ◽  
Public Procurement ◽  
Developed Countries ◽  
Government Procurement ◽  
Substantial Part ◽  
Private Industry ◽  
Regional Competition ◽  
Model Law ◽  
Opening Up

The promotion of international trade is seen as one of the important instruments to ensure development in developing nations and regions. The history of the World Trade Organisation (WTO) and the drafting of many regional and similar international trade agreements are evidence of this. The Southern African Development Community (SADC) is no exception.1 It is therefore strange that many states that are members of the WTO and actively encourage the opening up of international borders to free trade do not include public procurement2 in such free trade arrangements. This is particularly evident in developing states. If the WTO Government Procurement Agreement (GPA), which is a plurilateral agreement, is considered it is clear that many states do not wish to open their internal markets to competition in the public procurement sphere. It is therefore not surprising that public procurement has been described as the last rampart of state protectionism (Ky, 2012). Public procurement is an important segment of trade in any country (Arrowsmith & Davies, 1998). It is estimated that public procurement represents between 10% and 15% of the gross domestic product (GDP) of developed countries and up to 25% of GDP in developing states (Wittig, 1999). Unfortunately, governments often expect private industry to open up national markets for international competition but do not lead the way. Except for the limited use of pooled procurement,3 no specific provision is at present made for the harmonisation and integration of public procurement in the SADC. In view of the proximity of the member states, the interdependency of their economies and the benefits that can be derived from opening up their boundaries to regional competition in public procurement, the possibility of harmonisation and deeper integration in this sphere needs to be given more attention. The importance of public procurement in international trade and regional integration is twofold: first, it forms a substantial part of trade with the related economic and developmental implications; secondly, it is used by governments as an instrument to address socio-economic issues. Public procurement spending is also important because of its potential influence on human rights, including aspects such as the alleviation of poverty, the achievement of acceptable labour standards and environmental goals, and similar issues (McCrudden, 1999). In this article the need to harmonise public procurement in the SADC in order to open up public procurement to regional competition, some of the obstacles preventing this, and possible solutions are discussed. Reference is made to international instruments such as the United Nations Commission on International Trade Law (UNCITRAL), the Model Law on Public Procurement and the GPA. In particular, the progress made in the Common Market for Eastern and Southern Africa (COMESA) with regard to the harmonisation of public procurement, which was based on the Model Law, will be used to suggest possible solutions to the problem of harmonising public procurement in the SADC.

Ten Pages that Changed the World: Deconstructing Ricardo∗

2009 ◽  
Vol 2 (1) ◽  
pp. 1-33 ◽  
Author(s):  
Richard Peet
Keyword(s):  
Free Trade ◽  
Economic Geography ◽  
Comparative Advantage ◽  
Development Policy ◽  
Open Market ◽  
Trade Theory ◽  
The World ◽  
Neoliberal Development ◽  
Trading Scheme ◽  
Political Economic

Powerful ideas that shape the world become taken-for-granted verities, in two senses of the term: as the only world that is known; and as the only world that can be imagined. When hegemony controls the imagination, fundamental criticism becomes difficult, and perhaps, impossible. Yet what if there were flaws in the original idea, from which new worlds were constructed, that have materialized in a political-economic geography beset with seemingly unsolvable problems? For example, what if there have always been fundamental flaws in the free trade, open market, competitive, global system that dominates both the world as we know it and the conventional political-economic-geographical thought we know it through? This article speculates that a psycho-discursive act of deconstruction might unravel the entire, subsequent discourse. It aims deconstruction at a founding statement in the free trade, global ideal, by looking critically at David Ricardo's theory of comparative advantage. Ricardo's argument that specialization and free trade are universally beneficial, became a founding premise of conventional economic theory and a basic prescription of liberal and neoliberal development policy. The article looks critically: at the logical consistency and representational accuracy of Ricardo's theory, especially the claim that all participants benefit from participation in a free trading scheme, so that trade brings about a far better world. The article reaches two main, critical conclusions: free trade theory based in comparative advantage has, from the beginning, been an ideology for creating economic spaces open to domination by powerful, leading countries; economics and economic geography have, since their classical beginnings, been biased in that their founding statements reverse the reality they pretend accurately to represent.

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