T

he increase in international trade flows has become a central issue in the world economy. At least Paul Krugman tries to explain that, “global economics has never been as important as it is now. In the early 21st century, nations are more closely linked through trade in goods and services, flows of money, and investment in each other’s economies than ever before”.

David Ricardo says the comparative advantages of a country are more likely to increase its national income and economic growth if it undertakes product specialization, and if trade transactions with other countries are smooth and open.

In the initial approach to international trade, I assume the philosophical basis is how to create mutual benefits. Creating a free-trade mechanism is expected to generate stable trade and by equally beneficial for the developed, developing and least developed countries.

However, in my opinion the approach still focuses on growth instead of equity (Amartya Sen), therefore it does not solve the fundamental problem, which is poverty.

The WTO found that 1 billion to 2 billion people earned below US$1 per day, so Renato Ruggiero (the former consul general of the WTO) stressed that the importance of the WTO was to prioritize the improvement of economic conditions in developing countries, especially in the least developed countries.

Today global political and economic analysts have begun to seriously consider the contribution of world trade, including the ASEAN free trade mechanism, for development and poverty eradication in Indonesia.

One of them is Joseph Stigliz, who is trying to develop a discourse on economic development and create mechanisms of free trade toward fair trade.

Muhammad Dudi Hari Saputra
Yogyakarta