Why Jagdish Bhagwati Isn't Overly Worried About Trade

The trading system is well integrated and very few nations have fallen into the trap of protectionism

- RAHUL JACOB

Jagdish Bhagwati, the great trade economist, begins his conversation by reminiscing about a Canadian professor, Harry Johnson, who was an early influence on him because the professor's lectures were a brisk tour de force of international economics. As a student, he didn't understand all of it, Bhagwati says, but Johnson's enthusiasm for the subject was infectious.

To this day, any conversation with Bhagwati, now 91 and retired from Columbia University, is both educational and entertaining. Ask which metro stop is closest to his apartment and one not only receives directions but also a story, told in a way that is more comic than tragic, about R.K. Laxman. On a visit to Bhagwati's home decades ago, the legendary cartoonist missed the correct subway stop and wandered bewildered through a dangerous neighborhood.

Ever since the new US administration decided to unilaterally impose tariffs on the rest of the world this year, the global trading system has become a rough neighborhood.

The reassuring news from academia's foremost champion of free trade is that the world trading system is in much better shape than expected. He dismisses the view that the EU has been cowardly in its trade discussions with the US. He argues that EU leaders are being "pragmatic" by "waiting and watching," which is sensible when "you are facing an opponent who is bobbing up and down and in different directions." Happily, Bhagwati says the global trading system today is too integrated for the world economy to suffer as it did a century ago when the Smoot-Hawley tariffs were signed by President Herbert Hoover in 1930.