There is much attention given to the growing overseas influence
of China, India and other major emerging markets. In the Western media,
reporting often explicitly or implicitly appears to suggest that powerful
emerging markets are attempting to sway or even dictate trade terms (via
subsidized loans, foreign aid, political pressure or even historical ties) to
poorer or weaker African or Latin American nations. Here are a few highlights:
China and Venezuela
Brazil and Africa
India and Africa
Given that historical details (especially when it is not
pleasant) are often whitewashed, it is worth reminding interested observers
about some facts from the past. An excellent new study (forthcoming in the
prestigious American Economic Review),
“Commercial Imperialism? Political
Influence and Trade During the Cold War” by Daniel Berger, William
Easterly, Nathan Nunn, and Shanker Satyanath, finds the following (paper
abstract):
Abstract: We provide
evidence that increased political influence, arising from CIA interventions
during the Cold War, was used to create a larger foreign market for American
products. Following CIA interventions, imports from the US increased
dramatically, while total exports to the US were unaffected. The surge in
imports was concentrated in industries in which the US had a comparative
disadvantage, not a comparative advantage. Our analysis is able to rule out decreased
trade costs, changing political ideology, and an increase in US loans and
grants as alternative explanations. We provide evidence that the increased
imports arose through direct purchases of American products by foreign
governments.