I am often left wondering what Dani Rodrik thinks of trade. I try to parse his various criticisms of the current trade regime, but I still can't figure out where exactly he stands on core issues such as, "Is protectionism a good policy?" Most likely, his answer would be, sometimes yes and sometimes no. But the specifics of his views on this are a bit unclear to me.
So, I was excited to read that Rodrik does support at least some forms of trade liberalization:
I can think of two areas of liberalization where existing barriers are high and do not face the objections that I have considered so far.
First, agriculture. Subsidies and other trade-distorting measures are rampant in agriculture, especially in crops like cotton and sugar. It is hard to argue that these activities generate externalities or that their contraction would be bad for income distribution as a whole. So this is clearly an area of priority. (Note that I am not considering the impacts on other countries, which is not my focus here. The positive impacts abroad are typically vastly exaggerated, but the domestic benefits are not in question.)
Second, visa restrictions on highly-skilled foreign workers. The barriers here are large, since we know the visa quotas bind severely. Allowing more foreign scientists and engineers in will reduce incentives to outsource technologically-advanced operations abroad, and will help expand sectors that are likely to generate positive spillovers. The distributional effects are unlikely to be adverse, as it is the top of the labor market that will be affected.
To clarify, he is making these statements in the context of U.S. policies. He may (and probably does) take a different view for developing countries. But regardless, I was pleased to see him come out publicly in favor of some trade liberalization.
On the other hand, he loses me with his conclusion:
Note that the U.S. can do both of these on its own, and does not need Doha or action on the part of the rest of the world to reap the gains from these reforms.
I suppose it is true that the U.S. "can" do these on its own, without Doha. However, the U.S. may be much more likely to do them, agriculture liberalization in particular, in the context of Doha, and very unlikely to do them on its own. Which leads me to ask two questions: Why is he so anti-Doha? And, if he could be convinced that Doha would achieve these goals, whereas they would not happen unilaterally, would he change his mind about the benefits of Doha?
