The United States Trade Representative has just made a sharp reversal, declaring that the traditional model of trade liberalization—working with like-minded countries—was dead, and asserting countries instead should seek free-trade agreements only with their neighbors.
This traditional model was based on the “death of distance,” a term coined by Frances Cairncross of The Economist, to describe the end of physical distance as a limiting factor in business and other aspects of life.
Businesses can purchase, sell, collaborate and manage across national boundaries—allowing for new opportunities for the agile and highlighting inefficiencies for the slow-moving.
The United States Trade Representative rejects this idea with a new approach we can call the “contiguity theory” of trade, and USTR chief Robert Lighthizer spells it out in the Wall Street Journal….
