Targeting Rich-Country Protectionism: Jubilee 2010 et al.

• Author: Jagdish Bhagwati
• Position: University Professor at Columbia University

Even as the rich countries have lowered their trade barriers over the past five decades, they have continued to maintain a strongly protectionist stance against the labor-intensive products made in poor countries. This is a deplorable fact that trade economists and international institutions entrusted with trade policy-especially the General Agreement on Tariffs and Trade (GATT), which evolved into the World Trade Organization (WTO), and the United Nations Conference on Trade and Development (UNCTAD)-have long noted and protested. The recent focus by the world's leaders on this question therefore revives a long-standing complaint.

The renewal of interest in this question is certainly welcome. The abandonment of protectionist policies would clearly improve market access for the exports of the poor countries and add significantly to these countries' economic prosperity, without which no sustainable amelioration of poverty is possible. But the really important questions are, how do you manage to get this protection down and in what form?

The current popular answer to the first question: talk and condemn; to the second: go for preferences for the poorest countries-the so-called least developed countries. A recent European Union (EU) initiative is to offer the group of 49 least developed countries free access to EU markets for "everything but arms." I am afraid that the first answer is both dangerous and inadequate, and the second answer is exactly the wrong way to go about eliminating or reducing protectionism. We can do a lot better.

The talk-and-condemn routine

Judging by the reactions of the antitrade nongovernmental organizations (NGOs) and even the pronouncements of the poor countries' leaders at the World Economic Forum in Davos, Switzerland, this year, the tendency of the leadership of some international agencies (the World Bank, for example) to focus publicly on rich-country protectionism while failing to mention poor-country protectionism has led to a proliferation of fallacies that pose a danger to good trade policy in the poor countries. At the same time, exhortations go only so far, as we know from the long history of exhortations, lulling us into confusing sentiments with effective policies. Instead of talking and condemning, we need to think of concrete ways in which we can produce results.

Fallacies. Among the many dangerous fallacies spawned by...