Tag Archives: Global Flows

To trade or not to trade?


To engage in exchanging goods and services is one of the oldest human activities, some even say – the oldest. In the last three or so years, trade has acquired an additional feature becoming a hot topic of global politics. Populists especially, maintain that the positive or negative balance of a nation’s trade reflect that nation’s strength – a hotly debated topic (without much support) in science, and an even hotter issue in politics.

After President Trump’s victory in the US (and even before), trade was one of those topics that served as a rallying cry for political agitators and angry people. Allegedly, trans-border trade was (also) responsible for the loss of millions of manufacturing jobs. As a result, TPP and TTIP were trashed by the US government after TTIP also fell prey to liberal and leftist suspicions while NAFTA is to be re-negotiated. All this is supposed to ‘bring our jobs back’, where the tricky issue is what ‘our’ stands for.

Following some of the most respected economists, like David Ricardo, there are not many more useful activities a nation can do other than trade. This leads to an equilibrium between strengths and weaknesses of national capabilities, and, on balance, increases wealth across the board. Things have been getting more complicated by the increasing effects of transnationalization of trade where it has become quite difficult to attribute certain features of a product to one country. Most specialists agree that while globalisation, liberalisation and technological developments have contributed to significant losses of (no longer competitive) jobs, they have also added millions of new jobs.

So how should responsible governments react to the current debate and rising expectations from ‘below’? Keep trading and foster innovation, no matter where? Or limit and control transborder trade?

– Klaus Segbers

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