O tempora, o mores. The idea of fair trade in the Trump era

From social to accounting justice, the notion of fair trade has taken on a new meaning in the age of Trump. If, in the early days of globalisation, the request for a so-called fair trade relied on noble values and a system of global rules protecting the rights and labour conditions of workers, nowadays the call for fair trade seems to be a matter of scale. The term is reduced to a barely intelligible hope for a balancing of import and export flows between the two trade partners.  This vision is undoubtedly a product of its time, in which in front of an opportunity to open to the world it is easier to glimpse external threats rather than mutual opportunities. Accordingly, the import sector appears as something to be minimised or at least even out in the hypothetical zero-sum game that international trade should be in the third millennium. 

In the last few months there has been some proposals using specific indicators such as bilateral trade balance to justify the renegotiation of the conditions underlying trade. For instance, Michael Froman himself, as head of delegation for the TTIP during the Obama administration, declared at the presentation of the study conducted by Prometeia and Confindustria entitled "Esportare la Dolce Vita", that the trade balance of Italy towards the United States might represent a critical issue in the commercial relations between the two countries. 

Aside from the concerns raised about the use of such an indicator, as a country with 300 million consumers will necessarily absorb more than one that is 5 times smaller even in a "fair" world, its very interpretation in protectionist terms is a cause of major concern. Following this approach, the increasing negative trade balance with Italy (which has moved from an average deficit of 15 billion EUR between 2000 and 2008 to almost 24 billion EUR in the 2015-2016) is not a source of pride for the recovery of the US domestic demand that is manifestly more intense than the European one. It’s not even an incentive to introspection and fostering an improvement in the competitiveness of the industry via investments and innovation. Conversely, in the eyes of the new protectionism, it becomes an aspect to be reversed through artificial barriers, thus penalising, as well as Italian enterprises, the actual domestic purchasers (who will end up paying more for imported goods or replace their supplier not by choice but only because they are forced to do so). 

But is is really a matter of duties? The MIO portal allows for the reconstruction, in just a few clicks, for each sector and market, of the customs tariffs paid by enterprises. This shows that in the bilateral trade with the United States, Italian enterprises actually face (also due to the different specialisation across manufacturers) duties on average higher than their US counterparts for accessing the Italian market (2.8% as compared to 1.7%). In detail, 9 of the 18 sectors in which it is possible to break down the bilateral trade face US duties that are effectively more contained, whereas only for the food and automotive industries the difference is considerable and the associated flows are significant. At the other end of the spectrum, the Italian export sector is relatively more penalised in areas that are distinctly strategic for the national industry such as fashion, construction products, jewellery, precision mechanics. If justice were invoked, there is no telling whether the balance would tip westwards....