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The case for world trade

March 16, 2016

Once we start to erect tribal boundaries, where does it stop? Advanced economies depend on being open, on working to establish accord rather than discord. By working together we create an environment of potential harmony. By excluding others, we create an environment of likely conflict.

Many of us know this – and sadly experience the consequences of ‘tribal protectionism’ – in our work as contract and commercial experts. Whether the boundaries are internal, between functions or profit centers, or external, between customers and suppliers, they create inefficiencies, they detract from value, and they make our daily work less pleasant. Since our activities focus on trading relationships, current debates about world trade are certainly relevant to us.

Trade lies at the heart of human development. It has enabled progress, yet it has also been the source of imperial expansion and wars. Economic and technical progress cause massive fluctuations in the relevance and importance of different geographic regions and the need for specific skills. At any point in time, this is good news for some, bad news for others.

Given this environment, it is not surprising that the issue of trade lies at the heart of political debate. There will always be a desire by some to expand and by others to protect. Each has valid arguments. But ultimately, I think it is important to reflect on the fact that human development has been driven by our unique capability to trade with each other. It lies at the heart of our economic and social well-being.

Therefore we must be cautious about political leaders who offer protection, but in reality have no sense of the consequences of such protection. It is essential to remember that for every action, there is an equal and opposite reaction. The thing we must always ask is “if your policies are implemented, what will the reaction be – and is that something we will welcome?”

And indeed, it is the same question we should always be asking within the context of our own organization or company – are we protecting or are we enabling and which policies will actually have beneficial results?

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