The WTO has ushered in a new era of prosperity for the planet with a record number of people climbing out of poverty. That part has worked. The WTO has to be treated as a floor on which regional groups of countries can hope to build deeper trade relationships. Countries in the west Pacific are doing exactly that. The continent of Africa has been moving towards a free trade zone of its own. All these add to the WTO.
What makes Trump's tactics different is that they take away from the WTO. He wants to deal with countries one at a time. He thinks he can mete out unequal treatment in the process.
The problem with that approach is you are putting political whim above sound economic theory. The economic theory behind trade is sound. Trade does lead to rises in productivity.
But the WTO has not been designed to narrow income inequality. But that is like saying the Department of Education does not seem to be doing anything about health. Well, it has been designed for education, not health. That is no argument against health.
Trump is trying to go backward in time. He wants to take America and the world to an era without the WTO. That was not a good era. Instead of thinking what the next stage in America's economic growth is, he wants to go back to an era when America's trade with China was minuscule.
The tragedy is, there are plenty of smart people in America who have been thinking about what the next stage of economic growth for America is. But Trump is utterly uncurious.
No comments:
Post a Comment