by Tyler Cowen
on November 2, 2011 at 7:36 pm
in Current Affairs
And it barely was reported:
Pakistan agreed Wednesday to normalize trading relations with India, a move that may help give a boost to moribund talks aimed at improving relations between the hostile South Asian neighbors.
Here is more.
Great news indeed, because countries that trade together don’t go to war. See, e.g., WW1.
I think they must trade together and each have a McDonalds franchise for there to be peace!
saudi arabia has mcdonalds and trades a lot of oil with the US, doesn’t seem to make saudi citizens particularly pro-american.
I believe that’s the point- when your thumb is in the pie, you don’t need to like someone to keep from making a ruckus.
Saudi Arabia is probably a great example.
Well, until they fly airliners into buildings.
Trade, a McDonald’s, and perhaps a common enemy, like Wal-Mart.
Trade is likely to enrich both countries and make them less likely to go to war. Surely that is a good thing by most peoples standards.
True, but let’s not get too excited: http://www.thehindu.com/news/national/article2595119.ece
No, this is the best news of the day:
Saw a great presentation from Shikha Dalmia a while back about the lifting of cultural embargoes, and how Indian pop culture is spreading to Pakistan.
Is the resultant trade going to be predominantly unidirectional? What are Pakistan’s production strengths? Another incongruous snippet from the WSJ article is that Pakistan is relying on a “negative list” to ban the imports of items of strategic importance. Does is make sense to ban the imports of such items? Thought the US etc. had an export ban on these.
As an aside , the photo of the Indian border soldier makes an interesting contrast with those of the American soldiers typically flashed by media. The technological difference in soldier protection and accouterment is glaringly obvious.
I though the glorious theory of comparative advantage shows that Pakistan should export something even if it’s not particularly good at producing anything.
My fear is Pakistan reacting with broad anti-dumping tariffs pretty soon after the flood of cheap Indian goods.
But should Pakistan also be a producer of cheap goods? Maybe even cheaper then Indian. Any way the idea of strategic imports isn’t really nonsense, suppose Pakistan, for military purposes, wants to remain self-sufficient in steel production (this is just a hypothetical example) then it would make sense to not allow imported Tata Steel that would force Pakistani steel mills to close. Also many of the most successful industrialized countries of Asia reached that point by protected certain industries they wanted to grow.
Pakistan exports a lot. About 6% of GDP.
Google is a friend.
Banning import of items of strategic importance makes sense if you don’t want to become dependent on the imports.
China does something like this with wheat (more precisely, it keeps the price high enough that domestic production satisfies demand).
So the US bans are about making sure the enemies don’t get your cool stuff, while the Pakistan bans are about not depending on imports for basic survival. See also Japan and the UK in World War II.
high prices are good because?. words like ‘strategic’ importance are used by self important know nothings
How does price floor maintenance without import controls work to sustain domestic production? If it’s cheaper to produce wheat elsewhere wouldn’t it get imported?
Wouldn’t the Chinese just put a tariff on imported wheat to make sure it’s not cheaper? It’s not nonsensical to protect certain domestic industries, the free trade models really don’t take into account the real-world power relationships that exist between countries and the fact that certain goods (agricultural produce) are way more important then other goods (iPads). Of course there’s always the danger of this line of argument being exploited to protected non-essential industries.
“As an aside , the photo of the Indian border soldier makes an interesting contrast with those of the American soldiers typically flashed by media. The technological difference in soldier protection and accouterment is glaringly obvious.”
That’s because American soldiers are wimps, of course.
Since when did you start believing in what Pakistan agrees to do!?
Russia, China want India, Pakistan to become SCO members shortly – Russia & India Report:
Russia and China would like to seek India and Pakistan among the members of the Shanghai Cooperation Organisation (SCO), the Foreign Ministry said on Monday, October 31, after a meeting between Deputy Foreign Minister Alexei Borodavkin and his Chinese counterpart Cheng Guoping. “The sides called for accelerated SCO enlargement in keeping with the decisions of the Council of the SCO Heads of State made in Astana in June,” the ministry said, referring to admission of India and Pakistan as members and Afghanistan as an observer, and granting of the status of dialogue partner to Turkey. The diplomats “’coordinated the positions of the sides on further improvement of the Shanghai Cooperation Organisation’s activities in the light of preparations for a meeting of the Council of Heads of Government in St. Petersburg on November 7 and the SCO summit in China in the summer of 2012.”
Other under-reported news: Mexico is a failing state.
What is so great about this news? One bomb blast in India and things will go back to square one.
At the very least, that part of the world must not be too shook up by the fragiliy of the European Union. Of course historically we could have concerns about that too!
My inner Machiavelan is skeptical…
“normalize” meaning what? what is normal for India-Pakistan eh?
This normalization of trade should happen quietly for it to work.
It was properly reported and commented upon … in the South Asian media. Tyler, I am glad that you remind people there are actual international news unlike the useless noise that makes it into the TV news, but the low level of informedness about all things foreign sits uneasily with an ever-more-integrated world.
Nobody noticed the NYT article.? The more things change…
If trade opens up, full blown between these two rivals, then peace will resume. Peace comes best through non-hostile trading and much more good can come from peace with trading than with just simple peace and cease fire. Ending the ongoing cold war in that area between these two large rival powers, Pakistan and India, trade will not only blossom between those two, but also through their neighbors. Much debt and human suffering have always been apart of that area and an increase in the standard of living within both countries and the surrounding countries.
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