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Economic integration is an agreement among countries in a geographical region or unification of economic policies between different states aiming to reduce and ultimately remove tariff and non-tariff barriers on trade. The fruit of globalization is the tremendous rise of economic integration as globalization loosens barriers among the nations through reduction in cross-border duties and eases trade policies. Trumponomics is defined as the economic policies of US President Donald Trump that prefers high import tariff to bring “America First.” There is a debate among the researchers about the choice between free trade and protection or imposition of tariff. Some of them prefer free trade because during the start of the great depression, the world economy experienced a huge shift toward protectionism. Choice between no-tariff and tariff represents a prisoner’s dilemma situation whereby each player’s best response is to employ tariffs. This results in a sub-optimal outcome for all where the total volume of world trade falls, which is a Nash solution. The present chapter deals with theoretical discussions on trade war and throws light on the developing country’s choice between non-protectionism supported by globalization and Trump’s protectionism.

We have used the Michigan computable general equilibrium (CGE) model of World Production and Trade to calculate the aggregate welfare and sectoral employment effects of the menu of U.S.–Japan trade policies. The menu of policies encompasses the various preferential U.S. and Japan bilateral and regional free trade agreements (FTAs) negotiated and in process, unilateral removal of existing trade barriers by the two countries, and global (multilateral) free trade. The U.S. preferential agreements include the FTAs approved by the U.S. Congress with Chile and Singapore in 2003, those signed with Central America, Australia, and Morocco and awaiting Congressional approval in 2004, and prospective FTAs with the Southern African Customs Union (SACU), Thailand, and the Free Trade Area of the Americas (FTAA). The Japanese preferential agreements include the bilateral FTA with Singapore signed in 2002 and prospective FTAs with Chile, Indonesia, Korea, Malaysia, Mexico, Philippines, and Thailand. The welfare impacts of the FTAs on the United States and Japan are shown to be rather small in absolute and relative terms. The sectoral employment effects are also generally small in the United States and Japan, but vary across the individual sectors depending on the patterns of the bilateral liberalization. The welfare effects on the FTA partner countries are mostly positive though generally small, but there are some indications of potentially disruptive employment shifts in some partner countries. There are indications of trade diversion and detrimental welfare effects on nonmember countries for some of the FTAs analyzed. Data limitations precluded analysis of the welfare effects of the different FTA rules of origin and other discriminatory arrangements.

In comparison with the welfare gains from the U.S. and Japan bilateral FTAs, the gains from both unilateral trade liberalization by the United States, Japan, and the FTA partners and global (multilateral) free trade are shown to be rather substantial and more uniformly positive for all countries in the global trading system. The U.S. and Japan FTAs are based on “hub” and “spoke” arrangements. We show that the spokes emanate out in different and often overlapping directions, suggesting that the complex of bilateral FTAs may create distortions of the global trading system.

Purpose − Instances of refusal to trade stand in contrast to the theorems on the gains from trade. Two paradigms, second-best and political economy, have been used to explain refusal to trade. Murray Kemp (1962) provided a foundation for the political economy paradigm when he noted that, in the absence of lump-sum redistribution, the theorems on the gains from trade are “true but irrelevant”. This chapter takes Murray Kemp's observation as a point of departure for a consideration of the relation between individual and group gains from trade. Paradigms in explaining refusal to trade are distinguished.

Methodology/Approach − This chapter examines ideas underlying explanations for refusal to participate in international trade.

Findings − Two different approaches are identified in modeling and explaining why the gains from trade are compromised by refusal of governments to allow free trade. The second-best approach suggests a justification for refusal to trade while the political economy approach with public-choice foundations proposes an explanation.

Practical implications − Ideology expressed in how governments are viewed can influence economic analysis.

This chapter explores Lula's internationalist strategy toward the politics of globalization, which involves building alliances within the Common Market of the South (Mercosur) and between Mercosur and the European Union. It compares Lula's internationalism with the earlier nationalist Brazilian informatics policy as shifting strategies of sovereignty, highlighting their differences as interventions in the politics of globalization. In the process, it explores the changing conditions of globalization and assesses the potential of Lula's strategy as an alternative to the dominant neoliberal globalization form.

Starting from Gino Arias’s dictum on the uselessness of international trade theory for fascism, this contribution aims to demonstrate two main points. First, the free trade attitude displayed by fascism immediately before and after the “March on Rome” clashed with its nationalist origins. The nationalist movement had supported a strong protectionist policy starting from a rejection of the main principles of marginalist theory. This explains why some issues raised by Pareto and Barone which could have been used as arguments in favor of protectionism were neglected. In turn, this impasse played a major role in the rejection of Mihail Manoilescu’s theory in the thirties. The second point concerns the possibility of some – at least relatively – free theoretical debate on international trade theory and policy. When the regime set itself a clear objective, like the reduction of trade to begin with, and then autarky, the scope for free discussion narrowed to the point of eventually closing. In this context, refusing to support the regime’s choices in economic policy meant resigning oneself to becoming an outcast. A situation offering one more tessera in the complex mosaic of relations between science and politics in authoritarian regimes.

In the above example, India is more productive in both, chemicals as well as ceramics. However, while Bangladesh is thrice as productive domestically in respect to ceramics as compared to chemicals, India is only twice as productive in the same product relative to chemicals. It will be worthwhile for Bangladesh to specialise in the production of ceramics in which it has a comparative advantage and for India to specialise in the production of chemicals. Both countries stand to gain through trade provided that for each unit of chemical Bangladesh imports from India it has to part with less than three units of ceramics to India, while India, too, gains if for each unit of chemical it sells Bangladesh it can get more than two units of ceramics. Thus, when trade takes place, it benefits both parties when the ratio of exchange for each unit of chemicals varies between >2 and <3 units of ceramics. The exact rate of exchange would depend on relative bargaining power of the traders. A value nearer to 3 will indicate larger bargaining power for the Indian exporter, and a value nearer to 2 would indicate greater bargaining power for the Bangladeshi exporter. In general, if the relative gains are higher the lower the elasticity of demand for the product and the greater the value addition to the product. Thus, manufactured products generally fetch better exchange as compared to primary products.