INTERNATIONAL TRADE:A European Text. By Paul Brenton, Henry Scott, and Peter Sinclair. Oxford University Press, 380pp, Pounds 40.00 and Pounds 18.99. ISBN 0 19 877443 5 and 877444 3.
Although economics undergraduates have a wide choice of texts on international economics, there appears to be a dearth of texts dealing solely with international trade. Moreover, though it is not too hard to find books that cover conventional trade theories, these texts often omit the more esoteric aspects of the "new" trade theory. If imperfect competition and intra-industry trade are included, the exposition is often heavy going for all but the hardened trade theorist. This new text on international trade from three leading specialists in the department of economics at Birmingham successfully fills the gap.
While maintaining rigour in the coverage of some of the more complex "newer" theories of trade, the book provides the student of international trade with most of what he or she needs to get to grips with the subject. The theoretical analysis is developed in a logical manner such that the reader can trace the evolution of trade theory from David Ricardo to Paul Krugman. One chapter has a useful survey of empirical work on testing trade theory. But given the book's European focus, there is arguably a need for a section on the measurement of intra-industry trade and the use of econometric studies to analyse its determinants.
The book contains a highly competent exposition of the theory of trade policy, including a useful and very readable chapter on strategic trade policy. After a lucid description of the Brander-Spencer model, the authors proceed to show why it fails to provide a valid case for carte blanche intervention by governments in trade. In a valuable appendix on the European auto industry, the book surveys recent empirical work analysing the European Union's voluntary export restraint agreement with Japan. The models used incorporate the main characteristics of imperfect competition such as economies of scale and model competition. These show that liberalisation of the EU car market would enhance welfare.
A possible criticism is that the book is insufficiently European in its focus. In essence, this is a text on international trade using European trade as the basis for occasional illustrations of the relevance of theories examined. The chapter on trade blocs is disappointingly brief, given their relevance to regional integration. This is balanced, however, by excellent chapters on policy issues of much importance for Europe. These include a discussion of national competitiveness, the impact of imports from industrialising economies on employment in developed countries and whether trade has been the major cause of higher wage inequality in the developed world. The book's strength is its treatment of theoretical issues, but it has some valuable chapters on European trade policy. The final chapter has one of the most detailed surveys of the Europe agreements I have seen in text form.
Paul Brenton, Henry Scott and Peter Sinclair have produced an excellent text on international trade, which is sure to be widely used by undergraduates and postgraduates in the UK and English-speaking universities in Europe.
Nigel Grimwade is principal lecturer in economics, South Bank University.
International Trade: A European Text
Author - Paul Brenton, Henry Scott, and Peter Sinclair
ISBN - 0 19 877443 5 and 877444
Publisher - Oxford University Press
Price - £40.00, £18.99
Pages - 380