CHAPTER 9
International Trade Issues THE
EXCHANGE RELATION IS THE FUNDAMENTAL SOCIAL
RELATION.
— L U D W I G V O N M I S E S , 1 94 9
come to see the benefits of cross-border trade in the form of potential profits and new products. However, trade brings with it the competition that naturally occurs when two economies exchange goods and services for money. Each side of the exchange hopes to maximize their own benefit, although, as was discussed earlier, sometimes that maximization is purely psychological. As trade grows, national economies become concerned about their status in the global economy and the long-term effects on their domestic well-being. What was at first seen to be a mutually beneficial trade program between two friendly nations can suddenly be viewed by either side or both as a pernicious attempt to take advantage or even subjugate. Large economies claim that the “playing field” is not “level” and demand equal access to all markets. Small economies view free trade demands as attempts by the developed world to “economically and culturally colonize” them. Though much of the conflict is political, it is hard to separate politics from economics. Trade barriers, tariffs and economic advantage have been discussed earlier, but there are other issues of global economics that need to be resolved if nations are to enjoy the full benefits of international trade.
ALL NATIONS HAVE
Intellectual Property One of the hallmarks of the modern global economy is its increasing dependence on information flow. No longer can a nation’s growth potential be measured just in terms of population, geographic size, or natural resources. Not even growth in manufacturing facilities serves as an indicator of future wealth. Physicality has taken a back seat to intellect—mind has triumphed over matter. The educational level of a population and its access to information has become the newest and most important indicator of whether a nation will succeed or fail in the global economy. However, it is not enough to only have access to information—the real money is in owning it. Ownership of information and charging for its use are the source of numerous and expensive conflicts.
Patents, Trademarks & Copyrights The developed economies (e.g., United States, Japan, Britain, Germany) have devised a great deal of intellectual property law to protect inventions (patents), brand names (trademarks), and written materials such as books and software (copyrights). Holders of these intellectual property rights have the exclusive ability
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