Trade and Transitions (PDF)

The last twenty years have seen a transformation in the level and nature of international trade. Oil price shocks, world-wide recessions and the globalisation of capital markets have made the conditions of international trading increasingly volatile. Some of the most pressing problems for the developed economies of the West have been caused by the impact of imports from the emergent Newly Industrializing Countries (NICs), particularly where these have been concentrated in established and important sectors of the economy.
The strain upon the global trading system which has been apparent in recent years is evidenced in the growth of the `new protectionism' - the adaptation of trade restrictions by some of the world's leading trading nations. This book argues that these are mistaken. Based on a comparative study of eight leading industrial powers, including Japan, the US, West Germany and Britain, it concludes that the policies adopted are economically inefficient and do not fulfil the ends for which they were designed. Instead the authors argue that countries need to try and develop the policies which are least injurious to their trading partners. Retaliatory protectionism is mutually damaging and the world economy would be better with institutional frameworks which encourage mutually self-interested bargaining, rather than simply attempting to constrain or transcend domestic self-interest.