Lesser Evil: bilateral, regional or international economic integration?

To read original article by Martin Wolf Click here

An interesting debate on The Financial Times’ Economists Forum, A Korean-American strand enters trade’s spaghetti bowl, touches on the myth of countries such as South Korea and Singapore as evidence that free trade and market led reforms bring about economic success. While these countries have experienced economic success, it is not according to the rules of market led reforms and free trade. On the contrary, we see that the successes of these countries have been driven by United States’ geostrategic interests. Countries such as these two who were and continue to be given preferential access to the US market in return of serving America’s geostrategic political interests in that part of the world has been largely responsible for their successes. It is important to mention that this arrangement is happening after the success of state led development.
South Korea’s development was not market led but State driven. This development trajectory is the same one pursued by the developed countries when they were still on the development path.
Why would that opportunity not be extended to the developing countries now as opposed to the dirty tactics of “free trade” within the contexts of both international and regional integration?
This discussion comes at an opportune time for comparison with another posting here that praises the achievements of trade. In its current form and within this regime, trade is very destructive to the developing world.
As I write, the G7 finance ministers are discussing the role of the International Monetary Fund with the aim of extending it from assisting country members facing balance of payments support problems to monitoring the spillover effects that financial problems in one country can have on others. It would be interesting to see how the IMF will use its new powers to organise the international financial structure.

Professor Robert Wade's contribution:
A comment on Martin’s general assessment of bilateral-regional trade agreements as compared with WTO agreements and then a comment on the Korea-US one. More...