Friday, February 22, 2013

Historical contexts and trade regimes

A good piece on the role of ideas, context and historical settings that shape international trade rules - "Thinking About Free Trade: The Role of Ideas in Shaping Trade Regimes" by Emma Bell-Schollan. 

Tracing the liberal free market ideology to be the basis of both 19th century and GATT rules, the piece notes the subtle shift in reliance and acceptability  of  "government intervention" or "domestic state support" in early GATT rules signifying the historical context of the Depression and failure of markets.
"The trade regimes of the late 19th century and the post-War period shared a common root in the liberal economic ideas of Smith and Ricardo. Nonetheless, they fostered opposing policies regarding the role of government intervention in domestic markets. This difference was caused by the normative shift that occurred between the two periods, a result of the failure of liberal economic policies, which led to the Great Depression. In effect, these two free trade regimes were at the same time bound together, and pulled apart on the currents of ideas."
The role of the State and the market in the context of international trade has been an issue of long standing debate. Perhaps it would make sense to analyze positions from their historical context and time frames. A good read for anyone contesting the purely textual nature of international treaties.

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