Ideas of India Pravin Krishna on the Political Economy of Multilateral and Preferential Trade Agreements, Trade Liberalization, and the Future of Global Trade
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Dec 5, 2024 In this engaging discussion, Pravin Krishna, a distinguished international economics expert from Johns Hopkins University, dives into the intricate world of global trade. He unpacks the evolution of India's trade policies and the complexities of preferential trade agreements, addressing their often unintended protectionist outcomes. The dialogue also highlights the delicate balance of trade liberalization, labor dynamics, and the unique hurdles facing foreign companies in India. Krishna's insights into future trade challenges, especially regarding U.S. tariffs, add an intriguing layer to this global conversation.
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Post-War Trade System Origins
- The post-war multilateral trade system stemmed from Bretton Woods, aiming for a rules-based order.
- This was shaped by the interwar period's protectionist trade policies during the Great Depression.
Trade System Pillars
- The post-war trade system has two core components: non-discrimination (MFN clause) and reciprocity.
- These fueled liberalization; tariff reductions for one applied to all, prompting reciprocal cuts.
India's Early GATT Status
- India, a GATT founding member, held special developing-country status, avoiding reciprocal tariff cuts.
- This status, under Article 18, let India benefit from others' liberalization without reciprocating.