Mavericks on trade

Rather than neutralizing the protectionists, trade agreements may empower a different set of rent-seeking interests and politically well-connected firms – international banks, pharmaceutical companies, and multinational firms. They may serve to internationalize the influence of these powerful domestic interests. Trade agreements could still result in freer, mutually beneficial trade, through exchange of market access. They could result in the global upgrading of regulations and standards, for labor, say, or the environment. But they could also produce purely redistributive outcomes under the guise of “freer trade.” As trade agreements become less about tariffs and non-tariff barriers at the border and more about domestic rules and regulations, economists might do well to worry more about the latter possibility.

[…]we believe that no aggregate link exists between trade and productivity for advanced open economies, unlike emerging economies where a relaxation of constraints on trade allow multinational companies to enter, and to raise both exports and productivity.