Misadventures Of The Most Favored Nations: A Book Review

I like my economics at ground level, and that's what makes Paul Blustein's new book, Misadventures of the Most Favored Nations, so gripping.  You can smell the tear gas in Seattle, hear the dead silence on the fearful flight into Doha two months after 9/11, fidget in the limos lined up in front of the WTO headquarters in Geneva, and squirm in the secret meetings of top trade officials knowing their efforts are about to fail.

No matter how good the theory, applied economics is very hard.  India's Trade Minister knew if he gave away some of the world's highest agricultural tariffs, hundreds of his subsistence farmers would commit suicide when their debts overwhelmed them.  "For us, it's a matter of life and death."  The battle of the economists is well drawn.  Are the benefits of trade really that much greater for poor countries?  The World Bank's David Dollar squared off against Harvard's Dani Rodrik on that one.  Later, UC-Davis economist Daniel Sumner drew a threat from the California Cotton Growers Association to take away his research grants because he had the audacity to compute that U.S. subsidies kept world cotton prices 12.6 percent lower.

Blustein's 150 interviews with key players really bring this book alive.  You'll also come away with a well developed understanding of how trade institutions and the trade process work without wading through the tide of trade jargon.  Blustein concludes with a succinct warning, find a way to reach broad multilateral trade agreements that address not only protection, but currency manipulation, food crises, climate change, and the rule of law, or suffer the consequences of diminished world growth and stability.  I highly recommend Misadventures of the Most Favored Nations for those who really want to understand trade policymaking.