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White, Roger (2010). Migration and International Trade: The US Experience since 1945. Edward Elgar Publishing, Massachusetts. 226 pages. ISBN: 978-1848446960

The globalised world has witnessed intensification and intermingling of various activities.  Migration and trade are one of them. Various works have highlighted their relationship, but most of them paid less attention to factors that underlie this relationship. The book, Migration and International Trade: The U.S. experience since 1945, tends to fill this void. Trade is not only about the exchange of goods and trade; instead, it involves multitudes of activities and end number of processes. This book, besides establishing a complimentary link between trade and immigration, also reflects upon those processes. Roger White, an economist and a professor of Economics at Whittier College, wrote this book.        

The concerns for the book are understandable in the context in which it was written. This book is grounded in the liberal understanding of trade in IPE (International Political Economy), especially Ricardo's Comparative Advantage theory. It was published in 2010 when the recession finally ended, but the economy of the USA was lagging, and the unemployment rates were pretty high. U.S. economy grew at around 3% in late 2010. This book was a response to that crisis. The five sections of the book provide a detailed analysis of the trade-immigrant relationship in the context of the U.S. It is accompanied by a description of factors that underlies this relationship.  

In the book, the year 1968 is taken as a breakthrough year in the immigration policy of the USA. The 1965 Immigration Act, implemented in 1968, opens up the entry of immigrants from around the globe. He looked into the differences between immigrants from Australia, New Zealand, Canada, Europe to USA(Pre-168) and the immigrants from other countries to USA (Post 1968) in terms of their capacity to exert pro-trade influence between their home and host country. His empirical analysis is restricted to the period between 1992 and 2006. 

White offers a brief history of immigration in the USA by dividing it into 5 phases and later tries to establish its link with the immigrant-trade relationship. This book also comes up with specifications and variables to provide an objective understanding of the prevalent scenario. This book is full of classifications. For example, the very initial argument of the author is based on a two-channel model that shows the effects of immigration on trade. Immigrants affect trade through direct and indirect channels. In the direct, he mentioned preference effect and information bridge effect, and in latter, cultural bridge and enforcement bridge effect.

There are some crucial takes from this book. Firstly, this book highlights the role of immigrants in encouraging trade between home and host countries. This book shows the capacity of immigrants to act as trade intermediaries by acting as de facto intermediaries, resolving asymmetries of information and enforcement contractors. In other words, it can be said that they work as enablers for bilateral activities. For example, in Chapter 6 on trade facilitating infrastructure, White saw a link between transaction costs, quality of trade facilitating infrastructure (both hard and soft) and immigrants. He came to the conclusion that superior infrastructure can reduce the distribution margins that leads to lower product prices and consumer welfare. When there is poor TFI, immigrants have more significant opportunities to become intermediaries and reduce transaction costs.

Secondly, it helps in breaking some of the long-held myths related to immigrants. In contemporary times, many western nations have overstated/overestimated the losses related to immigrants, but the author refutes such presumptions. He shows that the host country's residents' loss depends upon the skill sets of immigrants. For example, in the post-1960 era, there was a considerable decline in the skills of immigrants in the USA. The wage-earning and unemployment effects were instead very minor. He highlighted the immigrant induced welfare implications for the host country.

Moreover, labour demand keeps a considerable balance with labour supply in the USA. So, immigration induced adverse labour outcome is unlikely. Therefore, the author recommends policy for the USA based on immigration that is selective and allows skilled immigrants from countries of the post-1968 cohort to increase trade with such countries. It is not possible in cases of unskilled workers because former are more connected to social and business networks at home.

Third, White also keeps in mind the subjective aspect of public opinion regarding the immigrants. He found the perceived cost of immigration among public higher than the real. Therefore, he suggested a policy change that should be accompanied by an effort to change public opinion regarding the impact of immigrants on aggregate employment. It could lead to socially optimal outcomes.  However, these are difficult to achieve, and as he said, is impeded by political expediency and lobbying. This further points to the need to study the real cost and benefits attached to immigration that could prove to be a game-changer in contemporary times. 

Fourth, the humanitarian aspects are not side-lined for economic imperatives in the book. Although White suggested an Immigration policy that would allow skilled immigrants to come to the U.S., he argued that it should be supplemented with continuing efforts to accept refugees and asylum seekers on humanitarian grounds. It can give space for refugee integration initiatives that can better utilise the skill sets of refugees. In contemporary times, we have ample examples of countries who have tried to integrate refugees through inclusive policies.  

Fifth, the author has borrowed from other fields and discipline. For example, the primacy and recency effects are derived from the field of psychology. White directly applied it to US-immigrant trade link by arguing that the influence of immigrants coming from the countries in the pre-1968 phase may reflect the primacy effect and the post-1968 countries may reflect a recency effect. White concluded that the influence of immigrants from the pre-1968 countries (Canada, Australia, New Zealand) would be lower than the post-1968 home countries (other countries) and thus have fewer opportunities to exert pro-trade influence due to, inoperability of preference channel and information bridge effects in pre-1968 phase due to few immigrants and availability of goods and overexploitation of the information asymmetries.

Sixth, this book also looks into the manifestation of cultural relationships in economic exchange. For example, in Chapter 5, he showed how the differences and variation in consumer preferences of host (the US) and home country residents, can impact the immigrants' ability to exert a positive influence on U.S. imports from their home countries through preference channel or by information or cultural bridge effects. White also talked about how immigrants can act as intermediaries to reduce the de-merits of cultural dissimilarities and avoid hindrance of trust and rapport between the home and the host countries. So, what others might have seen as a drawback in the bilateral relationship, he referred to it as an opportunity to exert positive influence. The cultural understanding helps us to move beyond the formal relationships between states and shows the inner dynamics of bilateral trades that are beyond the jurisdiction of the state and is enforced at people to people level. He also found variation in influences of immigrants across product classification, home country and immigrant characteristics. Also, the sequencing of chapters makes it easier to understand the concept. The sequencing of chapters is deductive. White starts with a general understanding of trade-immigrant relationship by using some of the existing literature on this issue. Then, he deduces his arguments to the case of the U.S. The initial chapters establish a framework in which the later chapters can be easily understood.

However, at the methodological level, there are few limitations. Part III of the book, Examining the U.S. immigrant–trade link, is meant for those who are experts in understanding econometric specifications and models like the Augmented Gravity Model. People from other disciplines might find it challenging to comprehend. Nevertheless, one can surely find comfort in understanding the author's observation at the end of those chapters and could make a sense out of it. A similar problem can be seen in Chapter 7. In that chapter, White tried to measure the cultural distance between the U.S. and immigrants' home countries. He used Inglehart's' WVS (World Value Surveys and EVS (European Values Surveys)- based measures of cultural distance. These value surveys contain information related to the beliefs of individuals, their attitudes and values. His calculation of cultural distance is based on TSR (Traditional Authority v Secular Rational Authority) dimension and SSE (Survival values v Self-expression values) dimensions. The significant elements of these dimensions are subjective, like adherence to family obligations, obedience to religious authority, quality of life issues. He also employed Pythagorean Theorem, and one has to resort to the concluding observation to understand the whole idea of the author. WVS has been conducted since 1981 in almost 100 countries. It investigates socio-cultural and political change. However, scholars like Thomas Hurtienne and Götz Kaufmann found its intrinsical assumptions static and bias.  They pointed out that questions used in the WVS questionnaire are based on certain assumptions of different things like 'emancipation', 'democracy', and 'modernisation'. Moreover, these terms could have different meanings for different people. Therefore, they found it 'one-sided, math-focused instrument' and affirming or falsifying the dominant class ideology only.  

One must also look into another aspect of the relationship that could add further interest in such research. Recently, it has been argued that immigrants promote export not only to their home countries but also the other countries. So, it points to expanding our understanding of what Oleg Firsin called as "proximate" countries. The proximity measure is contingent upon common border or linguistic or cultural factors. These factors point to business networks, communication and foreign market information as trade facilitators. So, immigrants stimulate exports to the countries which are geographically or linguistically proximate to their home country because channels that are applied in case of home countries can cross the borders. In the age of the interconnected world, this argument seems feasible and viable because it takes care of the overall impact of trade-immigration link. 

In totality, the book has been able to achieve its stated goal of showing the underlying factors in the trade-immigration link. It helps in understanding the interdisciplinary nature of the phenomenon of migration. He borrowed from the discipline of sociology, International Political Economy, and political science. White has been able to maintain a delicate balance between subjective aspects and their objective explanations. Not only he describes what has happened, but he also provides some prescriptions on what could be done for better policy decisions and better-informed public. This book is useful for anyone interested in understanding the essential link between Immigration and Trade, precisely how U.S. immigration policies impact its trade outcomes.

References

Firsin, Oleg. 2015. 'Do Immigrants Promote Exports to Countries Other than Their Country of Origin? On the Role of Geographic and Linguistic Proximity', 30.

Rampell, Catherine. 2011. 'U.S. Economy Grew at 3.2% Rate in Late 2010 - The New York Times'. 28 January 2011. https://www.nytimes.com/2011/01/29/business/economy/29econ.html.

Balaam, David N., and Bradford Dillman. 2015. Introduction to International Political Economy. Boston: Routledge.

Hurtienne, Thomas, and Götz Kaufmann. 2012. "Methodological biases: Inglehart's world value survey and Q methodology." 

Pulkit Buttan is an M.Phil. researcher at the Central University of Gujarat, Gandhinagar, Gujarat, India. E-mail: [email protected]