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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

06 December 2005

Case for trade at home

John Audley, a fellow at the German Marshall Fund, writes in the Financial Times: “Europeans and Americans are of one voice when it comes to who benefits from trade: big multinational companies and the rising economic powerhouses…” He continues: “the case for farm subsidy reform and import barrier removed must be made at home on solid domestic policy grounds.”

I have much sympathy for this position as it highlights the limits of the politics of globalization. One of the reasons I have always taken issue with writers such as Thomas Friedman is that they rest too much of their case on the inevitability of globalization, making the argument, essentially, that if you can’t beat it, you should join it. Politicians have adopted a similar stance, underscoring their impotence towards the winds of trade.

The WTO was meant to make domestic political decisions easier by offering commensurate compromises across the board—to make the case for trade more convincing by showing that others were making sacrifices too. This was a second best, to be sure, as it implied that trade was something bad that needed others to make sacrifices in order to justify one’s own.

The question we are facing at Doha is whether this mindset has run its course—whether it is time to make the case for trade on its own merits and to win it domestically before we move to the international stage. In the past, this has proven an unsustainable proposition. But as the world becomes more integrated, the benefits from trade are progressively more elusive, at least in the public mind. Maybe we have reached a point of integration where past politics are no longer sufficient.

John Audley, “The case for ending subsidies is yet to be won,” Financial Times, 6 Dec 05

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