Trade & Development: let the protectionists in?

Ok this has to be quick. Tons and tons to do and it’s almost 7pm.  In event planning mode like a mad woman.

Anyways, I just got back from a lecture on Trade & Development.

Interesting…

My background is in International Business, concentration in Int’l Trade & Marketing. So, I know a fair amount about GATT, WTO, regional trade agreemements (stumbling blocks or building blocks etc.), trade & development etc. etc. etc. Not always fresh in memory but Bretton Woods is located somewhere back there.

Anyways.. first lecture I’ve ever been to on Trade &Development where the lecturer espoused protectionism….

I was like seriously? This goes against almost every grain of theory I have ever been taught.  But, that just makes it all the more interesting. Especially since this has been one of the (many) ideological issues of which I won’t plant my feet solidly on the ground – I like to see both sides, which gets fairly annoying at times.  Background in international business yet I highly believe in supporting the local economy. I loved “buying Canadian” and I try to buy veggies with the “Suomi” sticker.

Granted, before I continue.. he wasn’t for protectionism per se. He just stated some of the merits of taking care of one’s own during economic hardship – and gave examples of how China, India, Finland and even Great Britain and America did this occasionally. Quickly – States during depression – i have a feeling that didn’t work out quite so well but as for China and India – true true, they cut themselves off of some bits to prepare themselves to join in this global world.  When countries that aren’t developed go straight into the global world they often tend to fail. Structural adjustment programs in the 80’s anyone? Then again, aren’t we supposed to do Trade NOT Aid!

But still – this is a good time to keep open the debate since Obama just ‘diluted’ but will still go with the “Buy American” clause in the US economic package. Right away when I heard about that, I as Canadian  like “Noooo…  This is gonna be bad for Canada”

But then again, working the local economy can be a good thing. Not always economically, but if you look at other measures, it’s pretty interesting. Who knew that little old isolated Cuba would be the only country in the world to have sustainable development.  Look at their health care system.

And Deep Economy (the Wealth of Communities and the Durable Future) was one of my favourite books, not espousing protectionism.. but definitely all for the local movement.

Big fundamental questions for a girl in international business working with “global growth venturing” all the while sitting on a fence about the developing and pushing for the local economy. Not to say I am now espousing protectionism. Not at all.  That usually leads to monopolies which leads into collecting monopoly rents (That ones for/from you Jay;)

It begs the question though… how sustainable is this global trade world if the only country that fits the bill is CUBA? Almost makes me laugh.. or cry, not sure yet.

Anyways open for debate. Times running out and need to get back to work!!!

BUT WHAT’S MORE SUSTAINABLE FOR THE FUTURE?

GO THE LOCAL ROUTE ?

GO FOR GLOBAL TRADE?

and more importantly.. how do you do both personally, commercially and politically?

Interesting. Will ponder while I desperately try to get invitations out…

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4 thoughts on “Trade & Development: let the protectionists in?

  1. Hendrik says:

    While I am all for Cuba, I think the article only gave a one-sided view. Read a few books on Castro and Cuba, or even just articles or watch some photos, and you will see that while they have a good health care system there’s nothing there that you could call freedom of speech. I believe with the lack of infrastructure there’s not a lot of innovation either – even if the school system is pretty great.

    Sustainable for the future: Local, seasonal, organic. You’ve heard this before. We need trade, it benefits everyone if done correctly (and not like the USA or EU is doing it, selling their stuff to other nations, subsidizing agriculture, and not allowing in food from other countries [Africa]). I am all for global trade thus, but it needs to be a even and fair playing field. That’s what we don’t have atm.

    btw, we got a pretty awesome healthcare system here in Finland – or haven’t you needed the doctor yet 😉 ?

  2. Jane says:

    haha yeah cuba isn’t a great story – we discussed that too but didn’t mention the whole thing, but the fact that its labeled as sustainable development does spark an interesting debate;)

    Agree with you on both accounts but its still 2 sides which is why it’s hard to be all for both- all for local, seasonal and organic yet all for buying food from africa…

    then again, maybe its not that hard and i’m just making it more complex than need be;)

    Oh, and yeah.. not doing so well on Twitter – but, i still got what i wanted out of it – it’s all in the connections 🙂

  3. Hendrik says:

    Yeah, I made a Twitter account for my company. And a blog. Going the modern, web savvy way, ya know 😉

  4. Jay Godse says:

    Interesting post.

    There is a big difference between blanket trade protectionism and targeted and time-limited trade protectionism.

    In the first case, there is no incentive to improve business performance because your market is captive, and competitors have the same cost models that you do. You just end up with a gentleman’s oligopoly, which also collects monopoly rents. India was like this from 1947 until the mid 1990s. Growth was stifled because businesses weren’t free to (legally) import valuable products to improve their own local businesses. They were often stuck with locally manufactured junk. Of course the local stuff was junk; they had no incentive to improve. India’s best exports in those years were highly educated engineers and scientists. India boomed after a lot of those trade restrictions were lifted because, all of a sudden, companies could import the tools that allowed their scientists and engineers to stay and work in India doing interesting work and make India prosper.

    For targeted help, I believe that Airbus Industrie got a lot of coddling from the EU countries in the early days. However, now it is competing with Boeing. It worked for them because the protection was lifted.

    There’s nothing wrong with taking care of your own people. Buying local keeps the money flowing locally. However, if buying from your people significantly hinders your ability to achieve (compared to importing), then you are not doing anybody a favour. Your performance suffers, and the local guy has no incentive to improve, causing long-term damage to himself.

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