Migration for Welfare - Is the world view changing?
A very interesting piece on the Newsweek. It’s not everyday that such unequivocal support for reducing barriers are presented. Read the article here - Why Barriers Don’t Matter
There are two distinct and opposing points of view presented in this piece.
The first group led by Krugman, Rodrik and others focus on the tariff levels mainly and point out
“World trade is already so free, we’re really talking about stuff at the margins,Once you are down to tariff rates as low as we have now, a few points up or down doesn’t make much difference.” - Paul Krugman
Dani Rodrik, at Harvard University says - “We have a perfectly open trade regime. In no sense does it keep any country behind in terms of restraining its growth potential. The “astounding” changes in developing world tariff rates—down from 100 percent to 12 percent in India, for example—mean that most of the low-hanging fruit of trade negotiations has already been picked.”
The other group, led by Bhagwati, focus on hidden barriers to trade, mainly migration.
“Most countries abuse trade rules to a certain extent to achieve de facto protectionism without resorting to tariffs. And services like health care, entertainment and telecommunications still largely abide by national boundaries, but since they’re not like compact discs or mobile phones, which can be shipped by sea, they’re not a big part of the trade debate.”
The article has an interesting conclusion -
“So what is worth the effort? Something that most people don’t even consider a part of “trade” at all: labor mobility. Pretty much every expert agrees that creating a guest-worker program in the rich world would be one of the best ways to fight poverty and boost global incomes.”
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