Brad Pitt on trade and aid

Across the table, Steve Radelet from the Center for Global Development is running through the standard arguments on trade: comparative advantage, infant industry protection, import substitution. Pitt keeps writing it all down, looking like the journalism major he once was. Then he asks a question… "Shouldn't the argument be, what's not good enough for us is not good enough for them?" Pitt persists. "In the movie business, we can't burn toxic things when we film in the United States. So we go to Morocco and burn all the rubber tires we like when we're doing action scenes."

Hmm. The economist concedes that the actor has a point: Morocco's air quality matters. But if a poor country wants to attract Hollywood's business, maybe it has a right to relax environmental standards?

A little later, somebody remarks that the poor don't earn much from exports because the value is all in Western brands. Why do people pay for this ethereal thing called brand? "I'm a brand," Pitt interjects. "I ask myself this question."

As Sebastian Mallaby tells us, Brad Pitt is just the latest to jump onto the trade liberalization band wagon. While momentum is buidling, challenges remain.

Campaigning for trade is more complex than campaigning for aid, because trade creates losers as well as winners. Some poor countries currently benefit from preferential access to rich markets -- preferences that would disappear if these markets were opened to everyone. Other poor countries are net food importers, so cutting rich-world farm subsidies and driving up food prices would hurt them. Still other poor countries stand to gain from trade, but some of their people would get hurt: If India cuts its rice tariffs, urban consumers will gain but rice farmers will suffer. Then there are the environmental and worker-rights questions that Pitt raised in his tutorials…

Mallaby concludes with:

According to the World Bank, complete trade liberalization would enrich developing countries to the tune of $135 billion a year, more than these countries receive annually in aid and much, much more than they stand to gain from debt relief. If Pitt and his friends feel fuzzy about trade, that's the number to remember.