Yin and Yang in International Trade: Where Is Pareto When We Need Him?

Several types of international transactions are examined to assess the relative value of exchanges that are not Pareto-optimal. Informational asymmetries are frequently present in international trade, providing sound reasons to doubt that Pareto optimality can always be assumed. The balance posed by yin and yang provides a better approach. “Lemons” outcomes can challenge finances and threaten health. International policies to provide reliable information on price and quality are found to be partly successful. Notably, in many countries the core market institution, competition policy, is defective or non-existent.