Protectionism and World Politics

Much unwarranted gloom and doom has been written of late about the new protectionism. It has been widely held to be a major hindrance to Third World development, an obstacle in the path of world economic recovery, and even a threat to good international relations. The facts about trade in recent years suggest a different story–and the need to look far more critically at some of the myths propounded by liberal economists. For it was not protectionism that was responsible for starting the depression of the 1980s any more than that of the 1930s. Then, as now, it was financial uncertainty and the consequent shrinkage of credit that slowed both growth and trade. Nor is protectionism a serious menace. Not only has it failed to stop the flood of industrial exports from Asian countries, there afe good reasons of state and corporate self-interest why it need not be feared in the future. Far from being a threat to the international economic order, as IMF and GATT ideologues would have us believe, bilateral trading agreements between states and corporations are sustaining continued growth in trade despite financial disorder.