Think Big about International Trade

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I hope you all enjoy the guest lecture given by Ambassador Friedrich Löhr on his global travel stories as a career diplomat over the past 37 years. Actually, topic of our class is closely connected with “international relations”. As observed by Michael Forman, US Trade Representative, “trade is what most of international relations are about and trade policy is national security policy”; “leaders have come to see the economic clout that trade produces as more than merely a purse for military prowess; they now understand prosperity to be a principal means by which countries measure and exercise power”.

Several readings/case studies/discussions in our class have touched the strategic aspects of international trade in the 21st century. For example, I hope at this point you not only understand the technical aspects of the Trans-Pacific Partnership (TPP) such as “yarn-forward” and “short supply list”, but also can see TPP as a strategic movement for the US to become more deeply embedded in the Asia-Pacific region. Similarly, the Trans-Atlantic Trade and Investment Partnership (T-TIP) is a free trade agreement, but a successful conclusion of T-TIP will also send “an unmistakable signal to the world about the strength of the US-EU bond—a timely reminder as the crisis in Ukraine has triggered deep unease across the continent.”

The strategic aspects of international trade can also be understood from the development perspective. There is a direct correlation between integration into the multilateral trading system and economic growth and between growth and poverty reduction. What then UN Secretary Kofi Annan said remains very true “The main losers in today’s very unequal world are not those who are too much exposed to globalization. They are those who have been left out”. No example can be more convincing than the case of textile and apparel (T&A) to illustrate this point. In many low-income countries in the world, T&A accounts for two-thirds of local employment and over 60 percentage of total merchandise exports. This is why trade preference programs such as AGOA, GSP and HOPE play a critical roles in providing greater market access opportunities to those most vulnerable countries.

To understand the strategic aspects of trade, you may further recall our case study 2 and the discussions on the necessity of maintaining a sound operation of the GATT system in the setting of 1970s. Without a rule-based multilateral trading system, international trade simply couldn’t happen. Yet the current multilateral trading system established shortly after World War II needs an update to better reflect the changing nature of world economy and format of trade. This is why so much attention has been given to mega-trade agreements such as TPP and TTIP. These free trade agreements will have a huge impact shaping the future rules of the game, no matter in terms of adding new agendas such as state-owned enterprises, digital trade and facilitating supply chain, or more effectively establishing a level playing field for issues such as environmental and labor standards.

So think strategically about international trade and think big about the impact of our T&A industry in the 21st century global economy.

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Author: Sheng Lu

Professor @ University of Delaware

14 thoughts on “Think Big about International Trade”

  1. After hearing the German Ambassador Friedrich Lohr, it is clear that international trade is all about maintaining positive relationships with other countries abroad. Countries will not be willing to work on free trade agreements with you if you do not treat them fairly in other forms of communication, politics, and policy. Good international relations make the trade world go round. I really agree with UN Secretary Kofi Annan when he said, “The main losers in today’s very unequal world are not those who are too much exposed to globalization. They are those who have been left out”. The countries that are against globalization in avery globalized world loose out.

    1. I like your comment here! I did not really think about how important it is to have good relations with other countries in order to have successful trade policies; I more just thought that countries did what they think is best for themselves. It’s great that the German Ambassador said he really liked the RI/MA area because we can feel a sense of pride since he has been all over the world and really likes the people and area that we ourselves are a part of.

  2. International trade is a very important because it helps the U.S to benefit because we can get good for cheaper, but it also helps other countries benefit too. For less developed countries it helps to raise them out of poverty. it is also beneficial for the U.S. because international trade helps us to keep good relations with other parts of the world. German Ambassador Friedrich Lohr made a point to say that having good relationships is very important in trade, and continuing international trade will keep those relationships healthy. I also agree with the statement made. the people who miss out are not the ones who are overexposed to international trade, but the losers are the ones who have no interest with being involved in globalization. If you countries are not involved with globalization it only will hurt them in the long run. Countries not involved in globalization will not form the positive relationships with other countries as easily, and will not be helping poorer countries to change there economic challenges

  3. Ambassador Friedrich Löhr is an extremely well traveled man with tons of experience. From what he has seen and told us about his life I think that there is no way to predict what is to come of the future and the future of trade in the T&A industry. With everything we have been reading about from poor labor and GATT from case study too all we can hope is that if something did not go right the world will work together to make it right. Even if that means traveling from one country at a time fixing different things along the way like Ambassador Friedrich Löhr. It is important that we focus on issues that are happening right now such as helping LDC and not worrying about what might happen in the future due to helping these countries. It is important to keep good ties with everyone you meet whether you like them or not, we don’t know who will have power as time goes on and America doesn’t want to get on any other countries bad side.

  4. I really enjoyed listening to Ambassador Friedrich Löhr and all his experiences in global politics. One thing that stood out from his lecture was how important it is to create and maintain a relationship with countries, whether they are allies or not. Specifically in the T&A industry, we need to maintain a positive relationship with Asian and AGOA countries not only to help the industry, but help these countries grow and prosper. The T&A industry has the capability to help countries get out of poverty and into the global market. Like mentioned in the article, “the main losers in today’s very unequal world are not those who are too much exposed to globalization. They are those who have been left out”, we need to help bring undeveloped countries into the global market so they have a chance for success just like everyone else.

  5. I think what I liked best about hearing Ambassador Lohr speak was that what he had to say was not just relevant to the textile and apparel industry. It was more about fostering open communication with other nations which really ties into what we have been talking about in class, which is how globalization factors all parts of commerce in today’s day and age. Another thing I really enjoyed about hearing the ambassador talk about his experience was how many languages he learned and how he continued to learn throughout his career which I think is important for us to take away as students since the textile and apparel industry is constantly changing and growing.

  6. I thought it was interesting to hear about Ambassador Friedrich Löhr life. He is very well traveled and has a lot of experience in global politics. The most important thing I took away from this lecture was the importance of maintaining relationships with other countries. This will help when trading especially in the T&A industry. Positive relationships equal a smoother trading process.

  7. I think it is extremely important to maintain positive relationships with other countries in order to secure effective trade policies. I can clearly see how this class overlaps with international relations in general, especially after listening to Ambassador Friedrich Löhr. It was very interesting to hear of his many travels throughout his life. He has had so much experience with differing cultures and languages.

  8. Ambassador Friedrich Löhr stated on some vital aspects to having a successful flow in international trade. One must keep open communication through-out the experience in order to maintain positive relationships between companies. After reading the State of the Industry Address for AAFAfor our assignment, It is clear to see that the forming of ties can change quickly. The AAFA stated that they believe that Africa and returning to the US would be vital for the T&A industry, when a very short time ago China was the major frontier to be utilized. I think its interesting how the Ambassador touched upon that by showing how you can never be to sure as to where the T&A industry would go next and why it makes it very important to keep open communication with everyone.

  9. I found the lecture by Ambassador Lohr to be very interesting and mind opening. He stressed the idea of keeping open communication between countries to ease trade and commerce. With clear communication comes easier flow of trade between countries which is beneficial to everyone. I was also interested to hear where his favorite place to work was and why. He did a great job in explaining how global relations are always important for not only our economy but the worlds.

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