A new world trade order?

Talk about quick work. Economist Dani Rodrik joins the blogosphere and presto: Republicans and Democrats agree to a trade deal


Andrew Leonard
May 11, 2007 8:47PM (UTC)

Behold the power of the econo-blogosphere! Three weeks ago Harvard economist Dani Rodrik, a potent critic of "free trade" whose arguments are taken quite seriously by his Ricardo-worshipping colleagues, debuted his eponymous blog, Dani Rodrik's Weblog. A rousing argument on trade, featuring all the usual suspects from Greg Mankiw to Tyler Cowen to Paul Krugman, immediately ensued, no doubt thrilling graduate students in economics departments all over the English-speaking world. Then -- shazam! -- comes the news today that the Bush administration and Democrats have agreed to what the New York Times is calling "a major accord" on trade. Coincidence? I think not.

Theoretically, the agreement paves the way for environmental and worker protections to be attached to pending trade agreements. I'm going to wait until I see the U.S. government actually try to enforce any such protections before I join the ticker-tape parade, but in the meantime, just the fact that the conversation is happening -- both online and in the halls of power -- is worth applauding. Not only is it a sign, as House Speaker Nancy Pelosi declared, of "recognition of the results of the November election," but it is also encouraging proof that the dialogue on trade can embrace a more complex set of nuances than the popular old zero-sum all-or-nothing game of protectionism vs. free trade.

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That's what Rodrik calls "the last war." As he wrote on May 3:

Today's questions are different. Should the U.S. negotiate more bilateral free trade agreements, or fewer? Should we consider a "strategic pause" in trade negotiations to improve the functioning of the WTO or push hard on the existing Doha agenda? Should core labor standards and environmental safeguards be negotiated jointly with trade agreements? How much "policy space" should the WTO allow for? Should labor mobility be part of international trade agreements? How much quid pro quo should the developing countries offer "in return" for agricultural liberalization in the North? Does competition policy and investment belong in the WTO? Should intellectual property rights protection rules be different for developing nations? None of these questions maps neatly into the more-versus-less restriction dichotomy.

In that one paragraph, Rodrik, whose explorations of industrial policy and critiques of globalization have been referenced in How the World Works several times, lays out an impressive agenda for research and debate that demands wonky attention to detail and consideration of the evidence and scorns ideological dogmatism. Rodrik has long argued that every country's situation is different, and sweeping one-size-fits-all solutions (à la the Washington Consensus) do not respect such individuality. Let's hope both Democrats and Republicans are listening.

For his contributions, Rodrik laments that he has been accused by other economists of "giving ammunition to the barbarians"; of providing cover for economic isolationists whose fundamental antipathy to a global economy is anathema to all card-carrying economists, including Rodrik. This used to keep him awake at night, he wrote:

For several years after I first received the "ammunition to the barbarians" critique, I agonized endlessly about whether I might be doing the wrong thing by letting my reading of the evidence take me to a more nuanced case for international trade than most economists are used to ...

And then I had an epiphany. Surely God would not have put all the barbarians only on one side of the issue!

And when you think about it, it is obvious. First, and almost definitionally, if you think a certain approach is correct, it follows directly that you disagree with anyone who thinks that the right way to go is with either more or less of what you are proposing. And in the case of trade in particular, anyone who thinks that free-trade arguments do not get occasionally hijacked by what I call market-access rent-seekers must have been asleep during the past quarter century. Think of intellectual property rights in the WTO, or of the investment provisions of many bilateral trade agreements. Reassuringly for those who believe in a symmetric universe, there are barbarians on both sides of this issue.

I have been sleeping a lot better since.

This is a good thing. The Internet needs him well rested.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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