Author: Shiro Armstrong

In June’s EABER newsletter Bob Lawrence (Harvard University and The Peterson Institute) writes on ways Toward a More Effective WTO: the role of Variable Geometry. He argues for clubs that will have additional agreements to which only some members would subscribe on top of the general agreement of that round to which all subscribe.

This could be a way to break the Doha deadlock. He notes

One size does not fit all. The correct balance needs to be struck between requiring countries to assume some binding liberalization commitments and adherence to rules and providing them sufficient policy flexibility to reflect their unique circumstances.

I particularly enjoy the following:

If the titles of recent studies such as ‘The World is Flat’, ‘Borderless World’ and ‘The Death of Distance’* were to be taken at face value, the process of globalization would be nearly complete. But these titles entail considerable hyperbole and overlook the many costs that are incurred when goods and services move across international borders. There are large price differences between countries that imply that obstacles to full international integration remain significant.

This also indicates the potential for large gains from an increase in trade.

He’s right: distance is important and I’ve heard many say that globalisation has made the world flat (or flatter) and that distance doesn’t matter. Nonsense.

*Ohmae Kenichi, The Borderless World: Power and Strategy in the Interlinked Economy; Thomas Friedman, The World is Flat: A Brief History of the Twenty-First Century; Cairncross Francis The Death of Distance: How the Communications Revolution is Changing our Lives.