Thursday, April 15, 2010

I agree M. Lamy! Let the public debate commence now on trade vs protectionism!

Things are finally getting more interesting. Hopefully a world public debate will take place! What do I mean?

The WTO's Director-General. M. Pascal Lamy, addressed facts and "fictions" about international trade economics economic myths when he spoke to the Paris School of Economics on 12 April 2010.

"Comparative advantage is dead? Not at all, Lamy told Paris economists" is the title that headlines his speech as posted in the WTO's site (wto.org).

Among others, he said:
"... In my comments today, I wish to identify and address some of these fallacies. We need to bring sound economic analysis to centre-stage in this debate. Secondly, I want to locate trade policy in a wider policy setting because it is at our own peril that we take trade policy and all its political complexities out of their proper context...."

He covered the theory underpinning trade economics, what trade statistics show, how trade deficits should be tackled, the impact of trade on jobs, the “race to the bottom”, and why liberalization needs regulation (link to his full speech on the WTO,org site)

And he ended his speech with a direct challenge to trade-skeptics and pro-protectionists:

"Let the public debate commence now"

Here are my initial comments to Mr. Lamy's speech:

IMO neither trade nor protectionism can hold the intellectual - theoretical high ground.

The economic reality around the world today, not the economic theories, show, IMO, that the current situation is worse than both a) protectionism and b) a real globalization (see also my post: "the cases for a) more and b) less globalisation!!!!" (Tuesday, 3 February 2009) which contains two audio analyses of mine, one arguing for more and one for less globalization!

A global economy needs global laws and a global democratic government IMO. Else it becomes survival of the cheapest.

In any case, I agree that a public - world debate on trade vs protectionism and globalization vs regionalization vs localization must take place and let the people decide after that.

BTW, IMO, free trade of goods etc w/o free migration of people is economically, socially and above all, humanly unfair.

Plus it's the failure of WTO as a whole to close a Doha DA deal that is quite responsible for the protectionist fashion (and vice-versa, the two feed on each other).

More contributions of mine on the trade vs protectionism coming up. But I propose you also check out my existing posts on this blog under the "labels":
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Nick

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