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New-new Trade Policy

Author

Listed:
  • Dan Ciuriak
  • Terry Collins-Williams

    (Carleton and Ottawa Universities)

  • John M. Curtis

    (Centre for International Governance Innovation)

  • Beverly Lapham
  • Robert Wolfe

    (Queen's University)

Abstract

When national competitiveness is invoked as a policy objective, trade experts have learned to retort that countries don`t trade, firms do. This focus on the importance of the firm in international trade is consistent with the most recent developments in trade theory, but policy needs to catch up. Recognizing the growing anomalies in observed trade patterns relative to traditional models of trade based on national comparative advantage, the "new trade theory" of the 1980s looked at industries not countries, leading Nobel prize-winner Paul Krugman, a pioneer in this literature, to suggest the need for a new trade policy. Recent work on what some call the "new-new trade theory" focuses on the trading behaviour of individual firms, making a tight link between trade and productivity. In this paper we demonstrate how focusing on firms should be the foundation for a new-new trade policy, one that creates exciting opportunities for trade and investment promotion strategies, along with the need for much more targeted consultation strategies. We also discuss the implications of the new-new theory for regulatory coordination, and on new ways to cooperate with interlocutors in developing countries on the evolution of 21st century trade policy.

Suggested Citation

  • Dan Ciuriak & Terry Collins-Williams & John M. Curtis & Beverly Lapham & Robert Wolfe, 2011. "New-new Trade Policy," Working Paper 1263, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1263
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1263.pdf
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    References listed on IDEAS

    as
    1. Van Zandt, Timothy & Mihov, Ilian & Dutt, Pushan, 2011. "Does WTO Matter for the Extensive and the Intensive Margins of Trade?," CEPR Discussion Papers 8293, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Santos, Eleonora, 2017. "Externalities from FDI on domestic firms’ Productivity: A Literature Review for Developed Countries," MPRA Paper 88958, University Library of Munich, Germany.
    2. Baddeley, Shane & Cheng, Peter & Wolfe, Robert, 2011. "Trade Policy Implications of Carbon Labels on Food," Commissioned Papers 122740, Canadian Agricultural Trade Policy Research Network.
    3. Flentø, Daniel & Ponte, Stefano, 2017. "Least-Developed Countries in a World of Global Value Chains: Are WTO Trade Negotiations Helping?," World Development, Elsevier, vol. 94(C), pages 366-374.
    4. Santos, Eleonora & Khan, Shahed, 2018. "Determinant Factors of Pecuniary Externalities," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(8), pages 180-198.
    5. Zdzisław W. Puślecki, 2016. "Bilateral trade agreements and the rise of global supply chains," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(5), pages 17-23, October.
    6. Zdzislaw W. Puslecki, 2018. "The Increasing Importance of Bilateral Agreements in the Foreign Trade Policy," Journal of Management and Strategy, Journal of Management and Strategy, Sciedu Press, vol. 9(1), pages 19-30, February.

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    More about this item

    Keywords

    New-new Trade Theory; Trade Policy;

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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