Wither Free(r) Trade

Wither Free(r) Trade
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If there is any activity that mankind has been implicated (in the positive sense of the term) since time immemorial, it is trade. Be it the barter system or actual trading when economies and polities got monetized, humans have traded goods, services and even ideas. With the inception and isomorphism of the nation state form of organizing human societies, trade and economic activity took, more or less, within the confines of the nation state with protectionism and mercantilism as the hallmark or even trademark of states. But, gradually and inexorably, with the phasing out of tariffs on certain goods, which gained more traction and momentum after the second Great War, trade became freer. (It may be pointed out here that trade was and perhaps never will be entirely free). However, there was a blip in the whole schemata: newly independent and decolonized nations erected trade barriers under the “infant industry” notion and took recourse to protectionism. Autarky and import substitution became the mantra for these states and nations. With the advent of the third wave of globalization, and with lagging rates of economic growth and poor development, the less developed (and decolonized) countries latched onto the freer trade bandwagon. China was and is an eloquent example of this trend. The country, after Deng Ziao Peng, opened it in terms of economics and political economy to trade has progressed by leaps and bounds. Millions were lifted out of eviscerating poverty and China became not only prosperous but also powerful. In the meantime, over decades, world trade grew more than world output. All in all, freer trade was salubrious for the global economy and the units that comprised and were part of it. This freer trade paradigm and the dynamics that flow from it are now under threat. The clear and present danger comes from Donald Trump and his administration which, in its quest for “Making America Great Again” is throwing a spanner into freer trade. If Trump goes berserk and his silly policy measures again momentum across the board, what will ensue is tit for tat retaliation by other countries. It is not only freer trade that will be a casualty but also institutions that underpinned and actually smoothened it. Trump will ultimately go but the damage he will do to world trade architecture, supply and value chains and the global economy will take time to undo.

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