New-new Trade Policy

Dan Ciuriak (), Terry Collins-Williams, John M. Curtis, Beverly Lapham and Robert Wolfe
Additional contact information
Terry Collins-Williams: Carleton and Ottawa Universities
John M. Curtis: Centre for International Governance Innovation
Robert Wolfe: Queen's University

No 1263, Working Paper from Economics Department, 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.

Keywords: New-new Trade Theory; Trade Policy (search for similar items in EconPapers)
JEL-codes: F00 F10 F12 F13 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2011-01
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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