March 8, 2006
INTERNATIONAL TRADE AND MIGRATION
I am posting Section I of a recent paper I completed, in which I attempt to synthesize the literature on the trade-migration realtionship from the point of view of several disciplines. I hope to receive comments.
INTERNATIONAL MIGRATION AND TRADE: A MULTI-DISCIPLINARY
J. S. BHANDARI*
I: INTRODUCTION: This paper examines the inter-relationship between international migration and international trade in goods and services. Specifically, a central theme in the paper is the effect of trade liberalization upon incentives to migrate across countries and conversely, the effects of international migration upon the need for trade liberalization. Does trade policy liberalization lead to greater incentives to migrate across countries, or is such trade reform likely to dampen such incentives, in effect, replacing migration, including illegal immigration? Similarly, does a more liberalized immigration policy, create or replace international trade in goods and services between the relevant countries?
These issues are of immediate relevance to policy-makers in crafting and evaluating appropriate trade and migration policies. Unless the inter-relationship was properly understood, it is quite possible for trade reform to undo and undermine the effects of an independently chosen immigration stance. History itself provides several examples of trade and immigration liberalization occurring simultaneously at certain periods in time in certain countries, as well as, of the opposite relationship (i.e. trade liberalization coupled with immigration restrictions, as in the United States
While migration and trade have both been studied extensively in various disciplines including, law, political science, economics, sociology, demography, and international relations to name a few, their inter-relationship on both theoretical and policy levels has received very little attention. In addition, the bulk of the vast literature on trade and migration is targeted to professional trade theorists, public choice scholars or labor economists and is unlikely to be easily accessible to the legal profession, to the policy-maker or to inter-disciplinarians in general. This paper is intended to fill this lacuna in the literature.
The paper analytically surveys and synthesizes the existing literature on trade and migration, in particular, their inter-relationship, from the perspective of several different disciplines. In many areas, scholarship on the trade-migration relationship is either incomplete or non-existent. To the extent possible, I have attempted to fairly deduce implications for this relationship from existing analysis in several disciplines and to marry them to present the reader (in particular, the policy-maker) with a richer framework than has hitherto existed. In this way, I offer the outline of a blueprint of a multi-disciplinary synthesis of the inter-relationship between trade and migration.
Both the scope and the intended audience for this paper are much broader than the targeted readership of previous authors. Wherever possible and for the convenience of the reader, I have attempted to precede the principal discussion in each Section by a brief roadmap. In each Section, the trade-migration relationship is specifically emphasized in order to ensure that the reader is not unduly distracted by the details of the wealth of material presented.
In what follows, Section II contains a discussion of the recent policy debates involving international migration and trade in order to set the stage for the analytical discussion to follow. I observe that while the European Union chose to address both trade and migration (along with other “freedoms”) simultaneously, the United States pursued a piecemeal approach to trade liberalization and immigration reform, both in public discourse and in legislative enactments. In Section III, historical trends in patterns of trade and cross-border flows of labor and capital are discussed. I note that despite the ceaseless current emphasis on “globalization” and integration, the belle époque of integration was, in fact, a time that ended on the eve of the First World War. For a period of some fifty years prior to that date, the Old and New Worlds experienced integration in each of trade, financial and migration flows to a far larger relative extent, than in the closing years of the last century. In Section IV, I present and discuss the principal theoretical constructs or models proposed by trade and labor economists, which may be capable of generating falsifiable hypotheses regarding the inter-relationship between trade and migration. It is noteworthy though, that as originally proposed in these disciplines, this inter-relationship has not been at the forefront of attention. This Section points out that the inter-relationship between trade liberalization and immigration reform can only be unequivocally pinned down in the simplest theoretical structures. In order to determine the contours of this relationship in more realistic contexts, much more applied and quantitative work is necessary. In Section V, I turn to a public choice or political economy framework, while Section VI examines some of the literature pertinent to trade and migration in the areas of sociology, anthropology and international relations or international political economy. Public choice analysis has dealt primarily with migration policy, rather than trade and has focused on the type of migration policy that might be preferred by the enfranchised electorate in liberal democracies. A surprising result in this context is that in many cases, the average voter prefers a limited amount of illegal migration; this preference is then articulated by the state through selective enforcement of immigration laws, both at the border and in the interior. The work of anthropologists and political scientists (among others) also provides valuable insights into migration by analysis of social networks that catalyze both legal and illegal migration, along with the role of such networks in socio-economic, linguistic, cultural, and ultimately, political assimilation and incorporation of immigrants into a host society. When sufficient new immigrants gain meaningful political membership in the host state, the very meaning of national borders and of state sovereignty may be called into question. This is the domain of international relations scholars. In Section VII, I turn to empirical evidence regarding the relationship between trade and migration. The limited empirical work that exists so far, has mainly dealt with examining the relationship between trade flows and net immigration flows in simple time-series and cross-section data. Existing empirical analysis indicates that there is no apparent relationship between trade and migration, so that liberalized trade can replace or diminish the incentives to migrate. The last Section offers some concluding observations.
* Ph.D., LL.M., J.D., M.S., Professor of Law, Florida
 Some of the few exceptions that exist are cited at appropriate points below.
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