Mr. Bhagwati is a rare academic who has the great ability to convey his ideas to a wider audience. . [His] book of only 100 pages of text should be read by all those who are interested in the global trading system today. . With a light note, with lots of funny stories, examples and effective arguments that, beyond its political importance, make it a real pleasure to read it. The world leader in trade policy explains why what he calls “preferential trade agreements” is not a path to global free trade, but a dangerous step forward. As a long-standing and courageous opponent of these agreements, and especially between hegemonic powers and developing countries, Jagdish Bhagwati explains how they encourage costly trade diversions, disrupt the efficient functioning of world affairs, and allow major powers to obtain unjustified concessions from weaker countries. This book highlights the constant wisdom of non-discrimination, the founding principle of the global trading system, now almost totally forgotten, and concludes that the only way to come to reason is the movement towards free market access for all. This book sheds critical light on Preferential Trade Agreements (SAAs) and shows how the rapid spread of SAAs threatens the global trading system. These preferential agreements, many of which now have more than 300 in the form of free trade agreements and are multiplying rapidly, have restored the unfortunate situation of the 1930s, when world trade was undermined by discriminatory practices. While this was the result of protectionism at the time, it is ironically the result of the erroneous search for free trade via the SAAs today.
The world trading system is again in danger, the author argues, and the danger is palpable. Through his usual joke, momentum and elegance, the author documents the growth of these ASAs, the reasons for their proliferation and their unfortunate consequences, including the virtual destruction of non-discrimination, which was at the heart of post-war commercial architecture, and their replacement by what he called the spaghetti shell of a labyrinth of preferences. The author also documents how SSAs have undermined the prospects for multilateral trade freedom and serve as stumbling blocks rather than building blocks of the multilateral free trade objective. In short, the author convincingly shows why PTAs are “termites in the trading system”. In his new book, Termites in the Trading System: How Preferential Agreements Undermine Free Trade, Jagdish Bhagwati, CFR Senior Fellow for International Economics, argues that free trade agreements (SAAs), which are actually preferential trade agreements (SAAs) involving two or more countries, effectively advance the cause of free trade and undermine the multilateral trading system. The form of globalization, highlighted by this sketch, ironically advances a clear asymmetry between countries. It also shows that globalization may not be the most desirable outcome for all countries concerned. Trade liberalization, which relies exclusively on comparative advantages, is likely to maintain the asymmetry that emerges from this “joke.”