Re-emergence of the trading city network
Alan Berube says the rise of a network of thriving global cities should put policymakers on notice about their importance to commerce
Recently, a group of officials gathered to plot a new trade strategy. It was a typical trade-policy discussion: the participants diagnosed competitive export sectors, identified key trading partners, described how public and private investment could resolve barriers to global integration, and forged a new bilateral relationship.
But the meeting was not hosted by the World Bank or the World Trade Organisation. It was held in Portland, Oregon, where then mayor Sam Adams and Greater Portland, Inc (a public-private partnership dedicated to driving regional economic growth) have collaborated to develop a new export plan for the Portland metropolitan area.
In the age of the WTO, free-trade agreements and currency wars, why would a city have a trade strategy? The answer is simple: as Portland's initiative - one of a growing number of metropolitan-led trade efforts worldwide - recognises, cities, not countries, are the real centres of global trade.
More than 2,000 years ago, before the emergence of the nation-state, the Silk Road connected Xian , Baghdad, Istanbul, and hundreds of other cities through trade. In the Middle Ages, Zanzibar and other East African cities served as trading hubs for Asian merchants.
Cities make trade possible. But advanced economies have traditionally neglected this when designing trade policies. By contrast, China considers city-building a crucial aspect of its export policy.
Furthermore, policymakers often forget that trade increases city residents' prosperity by bringing in new wealth, in turn contributing to job creation and bolstering demand for services in the local economy.