Trade & Globalisation

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    Adam Posen: ‘There are many echoes between Brexiteers and the Trump way of thinking’

Adam Posen: ‘There are many echoes between Brexiteers and the Trump way of thinking’

Adam S. Posen has worked for central banks on both sides of the Atlantic – the US Federal Reserve and the Bank of England – and has written extensively about fiscal and monetary policies, Japan, the Eurozone and the US. Since 2013 Mr Posen has been the president of the think-tank Peterson Institute for International Economics (PIIE.) He is currently concerned […]

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    Canada’s big challenge: The long list of trade barriers between its own provinces

Canada’s big challenge: The long list of trade barriers between its own provinces

President Trump on the campaign trail promised to ‘renegotiate or rip up’ the North American Free Trade Agreement. As the US signals its intention to renegotiate this free trade agreement with Canada and Mexico, Trump’s tweets have focused on the Canadian dairy sector, where a stand-off between politicians on both sides of the border highlights the continued importance of the agricultural […]

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    Leaving a trade area can substantially reduce innovation and productivity

Leaving a trade area can substantially reduce innovation and productivity

The advantage of being in a trade area like the European Union is that a company can sell its products and services to a larger pool of customers. These are the usual gains from trade: each company/country specializes in what it does best, and by doing so, increases consumer welfare. By selling to a larger pool of customers, companies […]

Is the IMF rethinking austerity?

In an apparent break with its past practices, the IMF’s policy advice shifted towards being more open to fiscal stimulus packages during the global financial crisis in 2008-2009, especially for large economies that are systemically important as growth engines for the world economy. There was evidence of an incremental change underway in the IMF’s policy paradigm and how staff […]

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    Welfare gains from trade: Measuring the “average consumer” isn’t good enough

Welfare gains from trade: Measuring the “average consumer” isn’t good enough

No matter which statistics we look at, real growth in trade or trade to GDP ratios, there is little doubt that over the last 20-25 years we’ve seen unprecedented growth in global trade flows. The only exception was the period of the global financial crisis when global trade plummeted but even then recovery was very swift and global trade […]

With Brexit, inward investment will fall in the UK

Both in the run up to the referendum, and since the UK voted to leave the EU, there has been a good deal of speculation over the likely impact on inward FDI into the UK. In a timely recent piece for Columbia FDI Perspective, Laza Kekic suggested that UK inward investment will remain robust post Brexit. We beg to differ.

Japanese […]

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    Why were Western retailers blamed for the building collapse in Bangladesh?

Why were Western retailers blamed for the building collapse in Bangladesh?

Rana Plaza, an eight-story building in Bangladesh that housed garment factories employing approximately 5000 workers, collapsed on April 24, 2013. The resulting fatalities (over 1100) and injuries (over 2400) made it one of the worst industrial accidents in history. The scale of this tragedy and subsequent widespread press coverage put a spotlight on the risks and costs of sourcing […]

When companies stop offshoring, they may end up dying

“In the long run we are all dead,” and firms and industries are no exception. America, Europe, and Japan once dominated the manufacturing of computers and electronics, but these activities had all gone to low-cost countries by the end of the 20th century. Should we ban offshoring and stop “shipping jobs overseas”? Many voters and politicians seem to think […]

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    Strong patent rights accelerate the diffusion of new medicines across countries

Strong patent rights accelerate the diffusion of new medicines across countries

In 1999 lovastatin, a blockbuster cholesterol drug with annual peak sales of more than $1 billion in the U.S., became commercially available in Egypt — twelve years after it was first approved for sale by the U.S. Food and Drug Administration. Our research shows that this is not exceptional — long launch lags are common and 45 per cent […]

The downsides of the UK eventually joining NAFTA

The question of UK membership of NAFTA seems to be doing the rounds again. This is not entirely surprising. Both Australian and Canadian trade officials – including Ottawa’s former chief NAFTA negotiator – have recently called for the UK to join existing trading blocks, such as NAFTA, as an easy fix to potential Brexit-related disruptions to UK trade and production. […]

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    Without an agreed legal definition of protectionism, we can’t measure it

Without an agreed legal definition of protectionism, we can’t measure it

One word was conspicuous by its absence in the communiques on trade that came out of three meetings this year of the world’s finance chiefs. The G20 finance ministers, the International Monetary and Financial Committee and the G7 finance ministers all used the same sentence when it came to trade: “We are working to strengthen the contribution of trade […]

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    Great Divergence: The steamship gives us clues on the impacts of globalisation

Great Divergence: The steamship gives us clues on the impacts of globalisation

How does globalisation affect development? This question has a long tradition in economics and has been much debated both in academia and in policy circles.

Neoclassical theories tell us that reducing trade barriers across countries should provide net benefits to individual economies by making markets more efficient and stimulating competition. Testing these theories, however, turns out to be difficult: rich […]

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    Brexit: blame it on the loss of industrial jobs, not on globalisation

Brexit: blame it on the loss of industrial jobs, not on globalisation

‘Brexit is a rejection of globalisation’ (Larry Elliott, Guardian, 26th June 2016).
Larry Elliott’s claim about the causes of Brexit is stark, but one echoed, if usually in slightly more qualified fashion, by many other commentators. For example, in her Sylvia Ostry lecture in September 2016, Christine Lagarde, Managing Director of the IMF, put forward similar ideas, with the theme […]

Is free trade an economic example of asymmetrical warfare?

The so-called golden era of globalised trade that began shortly after World War II has more than a few things to recommend it. Trade liberalisation has lifted hundreds of millions of people from crushing poverty, promoted productivity and growth and linked once-hostile nations in a network of mutual dependence that lessened the chances of another ruinous military conflict.

So why […]

Globalisation won’t do away with variations in capitalism

The Cold War from 1948 to 1991 polarised opinion between advocates of capitalism and supporters of Soviet-style socialism. But after the fall of the Berlin Wall the conversation became more variegated. There was a remarkable growth in the literature on ‘varieties of capitalism’ including works by Michel Albert (1993), Colin Crouch and Wolfgang Streeck (1997), Bruno Amable (2000), Masahiko […]

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    If NAFTA fails, Canada should reach across the Atlantic to the UK

If NAFTA fails, Canada should reach across the Atlantic to the UK

The future of the North American Free Trade Agreement is looking increasingly uncertain under Donald Trump as president of the United States. In case NAFTA implodes, Armand de Mestral proposes the creation of the Atlantic Free Trade Area between Canada and the United Kingdom, in a framework involving Europe and the US.

A close look at NAFTA

NAFTA has been in […]

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    Will TTIP be shot down or rebranded as the ‘Trump Trade and Investment Partnership’?

Will TTIP be shot down or rebranded as the ‘Trump Trade and Investment Partnership’?

With the Congressional hearings of Donald Trump’s picks underway, including questioning of Robert Lighthizer who was chosen to be US Trade Representative (USTR) in the new administration, it could seem that free trade might survive after all. Who else than a longtime international trade attorney and deputy USTR under Reagan should naturally be inclined towards free trade? Yet Donald […]

Who are the discontents of globalisation?

JPMorgan London, by Håkan Dahlström, under a CC-BY-2.0 licence
The past months have been characterised by what can be called a “backlash against globalisation”. This development became most visible in the outcome of the Brexit referendum in the UK and the election of Donald Trump as the future president of the US. In both cases, the preceding campaigns massively referred to […]

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    What Donald Trump could do to ‘make America great again’ without destroying free trade

What Donald Trump could do to ‘make America great again’ without destroying free trade

US flag, by unsplash.com, under a CC0 licence
For nearly two years, unsettling comments by US presidential candidates rattled international investors. The prospect of US trade wars with China and Mexico hit global markets, already weakened by the surprising result of the Brexit referendum. The elections ended, but the financial community still cannot breathe a sigh of relief.

In order to calm […]

An isolationist America will be bad for the world

Donald Trump at Aston, PA September 13th, by Michael Vadon, under a CC-BY-2.0 licence
Many things have been said during this presidential campaign and many talked about the bad things we should expect from each candidate, especially Donald Trump. But I will talk about economics – just one thing that was pushed hard by Trump: trade.

America is a big country, the […]