Observing Trade Conference Summary
From QED
Although international trade is an extensively studied subject, the communities that study it are often disconnected by disciplinary distinctions, levels of analysis (macro or micro economics), or political interests. In recent years a growing number of scholars and policy debates insist that overcoming these distinctions is a necessary step towards understanding trade and crafting more effective governance of trade relations. Furthermore, new data and methods for studying trade reveal complexities about trade relations that do not easily fit into standard theories or policy approaches. To address these developments and the need to better integrate disparate understandings of trade, a group of scholars and practitioners with expertise in various aspects of trade met in March 2006 at Princeton University to explore international trade networks and their macro and micro impacts around the world.
Gary Gereffi’s (Duke University) keynote address, “International Trade and Offshore Production: Tracking China’s Shifting Role in the Global Economy,” provided a provocative perspective on U.S.-China bilateral trade by situating these flows in relation to regional Asian trade and foreign firm activity. By doing so, he showed that while China’s share of US imports has grown substantially, it is at a cost to other Asian-U.S. trading partners. The Asian share of US imports has actually fallen in the past decade or so. Furthermore, much of China’s export sector is composed of foreign-funded enterprises (nearly 60% of China’s imports and exports in 2005). Gereffi’s illustration of the nuanced character of China as a global player emphasized the multiplicity of global linkages and their importance, rather than a stark “race to the bottom.” Given this new understanding, Gereffi also suggested how other countries, Mexico in particular, might take advantage of their geographical proximity to the U.S. to effectively compete with China.
One of the main themes throughout the papers and discussions was the complexity of trade flows. How we view trade flows depends greatly on the theoretical lens and empirical data employed. Papers at the conference demonstrated the variety of approaches possible. For example, trade data were analyzed using data-mining network applications to illustrate global trade networks and their increasing concentration overtime. In these analyses, rather than seeing widespread interconnection in trade networks for many countries, instead fewer and fewer countries are participating in trade networks. Trade data were also built into Material Flows Analysis models to predict future supply and demand for steel in China and where recyclable steel reserves will soon drive flows of steel. Trade data were also analyzed at a variety of levels of commodity specificity. To test hypotheses about the different economic organization strategies between Korea and Taiwan, Hamilton and Feenstra used very detailed data on each country’s exports to the US to distinguish, for example, between “four-wheeled and three-wheeled baby carriages.” Other authors used more aggregated groupings of commodities to follow value chains and test the network structures of different commodity families. In both cases the capacity to zoom between the micro detail and the macro trade network structures provided powerful predictive insights about development outcomes in localities and trade or production trajectories in the future.
Another theme present in much of the discussion was what can and cannot be determined from the trade flow data. There was general agreement that to understand how governance regimes shape trade flows we need to know more than national-level flow data, instead examining within country impacts and processes. Many of the case studies presented at the conference show the remarkable adaptability and responsiveness of players along the value chains as institutions and cultural environments shift. They also illustrated the diversity of governance forms. Certain cases showed the continuing power of large firms over production chains that cross the globe, like Boeing’s careful management of Japanese suppliers, and others elucidated power shifts away from producers towards giant retailers like Walmart. However, other cases also showed the surprising success of smaller players in influencing the conditions of production and trade. These included examples such as Jordanian businessmen arriving at rallies in limos to protest the liberalization of trade policies, the legacy of a US trade policy conditions that set up a system that continues to improve working conditions in factories in the Dominican Republic, and the positive and measurable impact that Fair Trade programs are having on coffee growing communities. These case studies, some of which used innovative empirical analysis, advanced our tools for connecting the global picture to an understanding of the local conditions.
The most beneficial aspect of the conference was the appreciation by all participants for the value and necessity of greater dialogue, cross-fertilization of theories and methods in the study of trade. Attendees included professors from public and private universities; researchers from the US, Australia, Japan and Italy; researchers and planners from the UN, the US Treasury Department, and the Port Authority of New York and New Jersey. Papers covered studies of North America, Latin America, Africa, the Middle East, and Asia. Academic disciplines represented included sociology, economics, political science, history, transportation studies, international studies, public policy, business, and industrial ecology. Most felt that this diversity was a wonderful start and could even be expanded. Furthermore, the additional work of talking across these differences was as necessary as it was rewarding. The organizers see this as a model of globalization study.
The organizers gratefully acknowledge the financial support of the Princeton Institute for International and Regional Studies; the Woodrow Wilson School of Public and International Affairs; the International Economics Section of the Princeton Economics Department; and the Princeton Center for Globalization and Governance. Without their support this conference and the work that will come from it would not be possible.
