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Julio C. Saavedra – Nearly all participants „sietz“ each other

11. Oktober 2007

Accented English appears to be the lingua franca of economics (just as it is for the EU, to the great chagrin of the French): nearly all papers are in English, and the participants’ speech is littered with English-sounding incrustations. But the Verein für Socialpolitik convention is a gathering of German-tongue mother-speakers alright: despite being mostly about the same age, nearly all participants “sietz” each other.

At a half-full conference room dealing with external trade, all but a couple of participants sit on the right. An unconscious leaning of economists? A veiled political statement? Let’s see what their stance on free trade is; that will tell.
A well-dressed speaker is on the podium, looking barely out of his teens—save for a few whiskers left apparently on purpose for the occasion. But, respekt, he already has a law degree under his belt, plus one in economics. With a superbly sure-footed analytical mind, he dissects preferential trade agreements (PTAs), which appear to be all the rage in the past couple of decades (witness NAFTA, the EU, Mercosur and so on). Much has been said about the obstacles they represent to a smooth, efficient multilateral trade policy, but little on what really prompts countries to jump in. He has filled out that void: a PTA membership is found to create an incentive for other country-pairs to participate in a PTA as well. Especially, countries have an incentive to participate in the same PTA if their neighbors are members already. A sort of envy effect? Feverish activity of that part of the brain Thomas Fricke found out about yesterday evening?
At any rate, the speaker is clearly for free trade.
Next, a luminary of international monetary and trade policies takes the floor. He tackles the issue of how long import trade relationships last in Germany, examining a mammoth dataset containing a staggering amount of imported product categories (nearly 10,000) over the decade from 1995 to 2005. His niftily titled paper (“Die Another Day…”), while providing no surprises as to what sustains a long-lasting trade relationship, does surprise regarding how short-lived many of them are: nearly a fourth last for at most a couple of years.
And his paper makes delightful reading as well for the amount of anecdotal evidence it contains. Did you know Germany imports peanut butter from Austria? (What, you haven’t seen all those peanut bushes growing over there?) Or that there are 308 products that are imported from a single country? Or that import bills range from over a billion per year to a meager €65? Check it out.
And he, by the way, is for free trade as well.
So, there was a reason for all those folks sitting on the right-hand side of the room after all.

Julio C. Saavedra

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