Trade Practices

I received a Request for my views on Trade, specifically on Trade Treaties. I thought immediately to shove this Request into the trash can of my back memory, then I decided to give it a poor shot. The first thing any Reader must centralize in their Thoughts about Trade consists of the multiplex rationales for Trade. The primary reason will always be to enhance the economic performance of your own national economy. A second consideration is to help Developing nations in their development through ease of access and easy Trade terms. A third rationale is to aid foreign economies to secure adequate Goods and Services to provide for their Destitute. A fourth evolution is the attempt to raise the educational and skill levels of foreign labor forces in order to generate higher Living Standards, and a more effective Trading partner. Tyler Cowen gives a Commentary on Erik Reinert’s book on Trade practices which examines many Trade practices, and adds Tyler’s hesitations about the scope of Reinert’s theories.

I would like, at this point, to state on Record that I don’t think much of Trade Treaties, especially when they drift out of the realm of bilateralism. No one but direct Participants can fully understand the needs of their own economy, or can Anyone understand the real Advantages of Trade outside their own economy. I am a Romantic at heart, so I know any Trade Agreement which extends beyond the economic advantage of either Trading partner will eventually collapse, no matter the good intentions of the Participants. Trade must benefit all Participants, else it is an exercise in futility, with any economic staging upon that expectation of Trade will be wasted effort. Trade is that Game which does not get played, if it does not Pay.

Multi-lateral Treaties, in this light, appear to be only the investiture of monopoly production structure with legality, allowing each Signatory to encode their own special Trade advantages. The United States currently wants observance of Intellectual Property rights in this context, though Everyone realizes those rights are vastly overstated, and greatly in excess of either Cost or normal Profitability ratios. We also want the right of foreign market saturation with our Products, though the rationale behind this is doubtful, as We cannot compete effectively in either Quality or Price; except for Arms, Aircraft, and Medicine. The United States is trying to concentrate on a monoculture Trade pattern of high-End Profitability Trade Goods; this actually lacking an extensive market without more fundamental development in Our Trading markets. Current Politicians and Economists misread the American economic position, and believe there is translatable benefit in multi-lateral Trade treaties, when We need finely-tuned bilateral Trade treaties.

Bilateral Trade Agreements or simple unitary Tariff alignments invariably serve better than multilateral Trade agreements, if Trading partners are of sufficient economic size and development that there can be efficient domestic service of economic goals. Trade in Products which each of two Economies can produce relatively as well only fosters competition, and the later of consistent destructive nature; involving wastage of Transportation assets and double-Marketing Costs. There must be an real Ricardian Advantage to Trade for there to be a real Profitability to Trade. I could continue this Rant for hours, but the Post is getting long, I am getting bored, and Readers have some idea of my views. lgl