A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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“Don’t cry over dead trade agreements”:
economist Dani Rodrik explains...

December 12, 2016

“The two major deals on the table, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), are as good as dead after the election of Donald Trump as US president”... this is the essence of a recent paper for Project Syndicate1 by the American economist Dani Rodrik.

Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, Dani Rodrik is world-renowned for his work on the development trajectories of countries. A supporter of empirical research, a major specialist in South-East Asia, he counts among the economists critical of classical theories and the so-called virtues of free trade.

Author of “Don’t cry for Doha”2 in 2008, which analyses the clinical death of the Doha Round and the waning future of the WTO, this time round Rodrik concentrates on free trade agreements. He puts forward three strong ideas that diverge from the naïve beliefs of the supporters of free trade.

Firstly, Rodrik questions the real objectives of these agreements. Using the steel and aeronautics industries as an example, he argues that if free trade agreements are seen by their supporters as a means for avoiding “beggar-thy-neighbour” policies under lobby pressure, he does not see how trade negotiations themselves would not be “at the mercy of the same lobbies”.

Secondly, he points out that the agreements are not limited to lowering customs duties on goods but incorporate rules on intellectual property, capital flows and investment protections which are “designed to generate and preserve profits for financial institutions and multinational enterprises at the expense of other legitimate policy goals”. In other words, the non-protectionist posture would serve mainly to protect foreign investment, a paradox, the main consequence of which would be to make it even more difficult for developing countries “to access technology, manage volatile capital flows, and diversify their economies through industrial policies”.

Finally, Rodrik argues that trade policies mainly “reflect power asymmetries and political failures within societies”. To a certain extent, he is asking for an end to the rush for solving our domestic problems by simply opening up markets elsewhere. In opposition, he calls for accountability and better domestic political governance in order to devise solutions to manage our own economies: “If we manage our own economies well, new trade agreements will be largely redundant”.

Indeed, lowering customs protection on an agricultural product can be as much feared for its consequences in terms of imports as for its effect on amplifying dysfunctions in the formation of prices within domestic chains as a result of unequal market powers between the different links.

Similar examples can be found with regards export subsidies: rightly attacked for their depressive effect on international trade prices, they often only export internal imbalances without dealing with their intrinsic causes.

Ultimately, proper trade openness will be achieved through the improved co-ordination of efficient, smart domestic agricultural policies and not through scrambling for free trade agreements that do not have a common framework that encompasses the need for regulating production systems and agricultural markets.

1 https://www.project-syndicate.org/commentary/no-mourning-dead-trade-agreements-by-dani-rodrik-2016-12
2 https://www.project-syndicate.org/commentary/don-t-cry-for-doha?barrier=true

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