Capitalism’s efficient allocation of resources
Imagine a world where food routinely gets shipped thousands of miles away to be processed, then shipped back to be sold right where it started. Imagine cows from Mexico being fed corn imported from the United States, then being exported to the United States for butchering, and the resulting meat being shipped back to Mexico, one last time, to be sold. Imagine a world in which, in most years since 2005, China has somehow managed to import more goods from itself than from the USA, one of its largest trading partners.
This may sound like the premise of some darkly comic, faintly dystopian film – albeit one geared towards policy wonks. But it’s no joke – in fact, it is the daily reality of the global economy.
The above examples are all instances of ‘re-importation’ – that is, countries shipping their own goods overseas only to ship them back again at a later stage in the production chain
Compounding the insanity of re-importation is the equally baffling phenomenon of redundant trade. This is a common practice whereby countries both import and export huge quantities of identical products in a given year. To take a particularly striking example, in 2007, Britain imported 15,000 tons of chocolate-covered waffles, while exporting 14,000 tons. In 2017, the US both imported and exported nearly 1.5 million tons of beef, and nearly half a million tons of potatoes. In 2016, 213,000 tons of liquid milk arrived in the UK – a windfall, had not 545,000 tons of milk also left the UK over the course of that same year.