In late 2008, as the global financial crisis was spreading, so too was protectionism. Despite pledges by G20 and APEC leaders, tariffs were being raised in developing countries and industrialised nations had launched a slew of investigations into What World ‘dumped’ imports as a means of justifying tariff hikes.

The futility of protectionism in a global recession is not a new lesson now and was not a new lesson then – every world leader is and was well aware of the Leaders Should role protectionism played in exacerbating the Great Depression. But even as the global economy is recovering, leaders continue to find themselves torn. Their heart tells them to help industries and workers under stress; their head tells them Do to Halt protectionism will backfire.

This book, first published as an eBook in December 2008, collects essays from world-class economists on what global leaders must do to halt the slide towards the Spread of protectionism. It identifies three areas where world leaders should act:

• World leaders must finalise the WTO’s Doha negotiations. WTO rules remain the world’s best bulwark against 1930s-style trade wars. Protectionism • All nations should commit to a standstill on raising their applied tariffs and other forms of protection.

• Industrialised and developing nations should refrain from initiating new Edited by Richard Baldwin and Simon J Evenett antidumping cases, and postpone imposing antidumping duties wherever possible – economic nationalism should not be allowed to creep in.

With protectionism continuing to threaten global prosperity, many of this book’s recommendations hold true today.

ISBN 978-1-907142-28-4

Centre for Economic Policy Research 77 Bastwick Street, London EC1V 3PZ Tel: +44 (0)20 7183 8801 Fax: +44 (0)20 7183 8820 A VoxEU.org Book 9 781907 142284 Email: [email protected] www.cepr.org

What world leaders must do to halt the spread of protectionism

A VoxEU.org publication Centre for Economic Policy Research (CEPR)

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FP?K7ª645*-*6224--6*3*2 What world leaders must do to halt the spread of protectionism

A VoxEU.org publication

Edited by Richard Baldwin and Simon Evenett

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Introduction 1

The essays: What world leaders must do to halt the spread of protectionism

What should world leaders do to halt protectionism from spreading? 3 Hadi Soesastro

Doha: the last mile in the marathon 7 Jagdish Bhagwati and Arvid Panagariya

What should leaders do to stop the spread of protectionism? 11 Gary Clyde Hufbauer and Jeffrey J. Schott

What should world leaders do to halt a resurgence of protectionism? 15 Ann Capling

Protectionism and the crisis 19 R. V. Kanoria

Protecting open markets 23 Robert Z. Lawrence

Keeping the global economy open 27 Wendy Dobson

The crisis and protectionism: History doesn't repeat itself, but sometimes it rhymes 31 Richard Baldwin

What should world leaders do to halt protectionism from spreading? 35 Patrick A. Messerlin

No turning back: Lock-in 20 years of reforms at the WTO 39 Simon J. Evenett

What should ASEAN+3 do to help avert a collapse of the global economy? 43 Yung Chul Park Trade and the global crisis: What it means for Africa and the response of African leaders 47 Peter Draper

The crisis is an opportunity to push multilateral trade liberalisation 51 Ryuhei Wakasugi

Engage multilateral institutions in solutions to today's problems 55 Kevin H. O'Rourke

Trade policy in 2008: Great Depression redux? 59 Douglas A. Irwin Introduction

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1 VOX Research-based policy analysis and commentary from leading economists

1) Macroeconomic initiatives are the best way to fight this crisis, not pro- tectionism. K^qflk^iªib^abopªpelriaªrqfifpbªj^`olb`lkljf`ª^kaªcfk^k`f^iªmlif`vªfkpqorjbkqpª^p tbiiª^pªpl`f^iªp^cbqvªkbqpªqlª^aaobppªmol_ibjpªifhbªob`bppflk)ªrkbjmilvjbkq)ª^kaª`oba* fqª`ork`ebp+ªLo)ª^pªMolcbpploª>kkª@^mifkdªmrqpªfq7ª]Mo^`qf`bªHbvkbpª^qªeljbª^kaªPjfqe ^_ol^a$ Fkª^aafqflkªqlªobar`fkdªqebªpbsbofqvªlcªqebªob`bppflk)ªabmilvfkdªqebpbªj^`olªmlif`v qllipªtfiiªibppbkªmlifqf`^iªmobpprobªcloªmolqb`qflkfpqªplirqflkp+ªMolcbpploªAlrdi^pªFotfk) mboe^mpªqebªtloia$pªib^afkdªqo^abªefpqlof^k)ªklqbpªqe^qªqebªc^firobªlcªmlifqf`f^kpªfkªqeb .60-pªqlªcfdeqªqebªpirjmªtfqeªj^`olb`lkljf`ª^kaªcfk^k`f^iªjb^probpªfpªlkbªob^plk qebvªobifbaªplªeb^sfivªlkªq^ofccp+ª

2) APEC and G20 leaders’ words should be translated into deeds by agree- ing a framework that will allow completion of the Doha Round. >pªAo+ªE^afªPlbp^pqol)ª^ªqo^abªp`eli^oªtelª^asfpbpªqlªqebªFkalkbpf^ªMobpfabkqªmrqpªfq7 ]>ªpr``bppcriªAle^ªOlrkaªfpªqebª_bpqªfkpro^k`bªmlif`vª^d^fkpqªfk`ob^pbaªmolqb`qflk * fpj+$ª Cricfiifkdªqebªib^abop$ªmibadbªqlª^dobbªjla^ifqfbpªqefpªvb^oªtfiiªklqª_bªb^pv )ª_rqªfqªfp al*^_ib)ª^pªG^dafpeª?e^dt^qfª^kaª>o sfkaªM^k^d^ofv^ª^odrb+ª Jloblsbo)ªqebª`ofpfpªj^vª^`qr^iivªj^hbªfqªb^pfbo +ª?vªcl`rpfkdªk^qflk^i*ibsbiª^qqbk * qflkªlkªqebªmol_ibj)ªqebª`ofpfpªpelriaª^iiltªqo^abªjfkfpqbopªqlªmrqªqebªcfk^iªpqf`hfkd mlfkqpªfkª^ªjr`eª_ol^aboª`lkqbuqªåªlkbªtebobªc^firobªtlriaªrkabojfkbªqebªD/-$ p kbt*clrkaª`obaf_fifqv+ªJloblsbo)ªpfk`bªqebª`ofpfpªj^hbpª_^`hpifafkdª^ªob^iªmlppf_fifqv ) ^ªAle^ªab^iªqe^qªil`hp*fkªk^qflkp$ªrkfi^qbo^iªif_bo^ifp^qflkªillhªifhbª^ªjr`eªjlob tloqetefibª^`efbsbjbkq+ª?bclobªqebª`ofpfpªk^qflkpªqllhªqebªrkfi^qbo^iª`rqpªcloªdo^kq * ba+ª

3) World leaders should establish a surveillance mechanism to track any new protection, whether it is WTO consistent or not. >pªE^os^oaªMolcbpploªOl_boqªI^tobk`bª^odrbp)ª^ªdil_^iªprosbfii^k`bªjb`e^kfpj)ªlmbo* ^qbaª_vªqebªTQLª^kaªfkª`lkgrk`qflkªtfqeªqebªFJC )ªtlriaªpqfccbkªk^qflk^iªib^abop$ obplisbªqlªobgb`qª`^iipªcloªmolqb`qflk+ªHkltfkdªqe^qªqo^afkdªm^oqkbopªtfiiªib^okª^ijlpq fjjbaf^qbivª^_lrqªobpqof`qfsbªjb^probpªj^vª`^rpbªdlsbokjbkqpªqlªqefkhªqtf`b+ª Jloblsbo)ª^ªifpqªlcª`ofpfp*ifkhbaªmolqb`qflkª`lriaª_bªqebª_^pfpªlcªqebª]bufqªpqo^qbdv$ qe^qªqebªtloiaªtfiiªkbbaªqlªrktfkafkdªmolqb`qflkª^cqboªqebª`ofpfpªe^pªm^ppba+ªQefp mlfkqªpelriaªklqª_bªlsboillhba+ª>pªMolcbpploªHbsfkªL$Olrohbªmlfkqpªlrq)ªfkqbot^oªq^o* fccpªpqobkdqebkbaªfjmloq*`ljmbqfkdªfkqbobpqpªqlªqebªbuqbkqªqe^qªqebvªpr``bbabaªfk j^fkq^fkfkdªq^ofccpªab`^abpª^cqboªqebªDob^qªAbmobppflkªt^pªlsbo +ª Qebpbªbpp^vpªtbobªbafqbaªfkqlªqebfoªmobpbkqªclojªtfqeªqebªebimªlcªQ b^jªSlu+ªTb bpmb`f^iivªqe^khª>kfiªPe^ja^p^kf)ªKf`libªErkqªlkªqebªmolar`qflkªpfabª^kaª>drpqfk @lokbglª^kaªMfboob*IlrfpªS¤wfk^ªcloªqebfoªj^o^qelkª`lmvbafqfkdªpbppflkp+ªT bªtlria ^iplªifhbªqlªqe^khªJlkaeboªJfjlrkfª^kaªBilafbªOl_fkªcoljªqebªFQ@ªcloªploqfkd qeolrdeªrkqliaªdfd^_vqbpªlcªa^q^ªfkªob`loaªqfjb

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2 What should world leaders do to halt protectionism from spreading?

Hadi Soesastro Centre for Strategic and International Studies, Jakarta

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1) Make solid progress in the Doha Round >ªpr``bppcriªAle^ªOlrkaªfpªqebª_bpqªfkpro^k`bªmlif`vª^d^fkpqªfk`ob^pbaªmolqb`qflkfpj+ I^pqªGriv)ªqebªjfkf*Jfkfpqbof^iªTQLªjbbqfkdª`lriaªe^sbªpr``bbabaªfkª`lk`irafkdª^ ab^iªlkªqebª`ofqf`^iªcfopqªpq^dbªlcªkbdlqf^qflkpª%hkltkª^pªÖjla^ifqfbpÖ&+ªT fqeª^ªmrpe coljªqebªib^abop)ªjfkfpqbopªqe^qªtfiiª_bªafpm^q`ebaªqlªDbkbs^ªqefpªAb`bj_boª`lria cfk^iivªpb^iªqe^qªab^i+ª K^qflk^iªib^abopªtfiiªe^sbªqlªhbbmª^ª`ilpbªbvbªlkªqebªkbdlqf^qfkdªmol`bppªqlªbkprob qe^qªqebfoªmlifqf`^iª`ljjfqjbkqpª^obªklqªrkabojfkbaª_vªqebªkbdlqf^qlop+ªQebªobj^fk* fkdªeroaibpªfk`irabªqebªpmb`f^iª^dof`riqro^iªp^cbdr^oaªjb`e^kfpjªcloªabsbilmfkd `lrkqofbp)ªqebªqob^qjbkqªlcªpbkpfqfsbªc^ojªmolar`qpªfkªfkarpqof^ifpbaª`lrkqofbp)ªqeb pb`qlo^iªq^ofccªbifjfk^qflkªfkªklk*^dof`riqro^iªj^ohbqª^``bppª^pªtbiiª^pªpljbªrkcfk * fpebaª_rpfkbppªifhbªqebªfpprbªlcª`lqqlkª^kaªpljbªQOFMP*obi^qbaªfpprbp+ª Qebpbªeroaibpª`^kªlkivª_bªlsbo `ljbªtfqeªqebªmboplk^iª^kaª`liib`qfsbª^qqbkqflkªlc D/-ªib^abop+

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3 VOX Research-based policy analysis and commentary from leading economists

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2) Keep the economy growing and strengthen safety nets Molqb`qflkfpqªmobpprobpª^qªeljbªqbkaªqlªfk`ob^pbªtfqeª^ªofpbªfkªqebªcbbifkdªlcªebimibpp * kbppªqe^qªlsbo `ljbpªqebªmlmri^qflkªfkª^kªrkcliafkdªb`lkljf`ª`ofpfp+ªQ lª_bª^_ibªql j^fkq^fkªlmbkªb`lkljfbpªmlif`fbpªdlsbokjbkqpªjrpqªpeltªqe^qªqebvªe^sbªprccf`fbkq fkpqorjbkqpª^kaªobplro`bpªqlªhbbmªqebªb`lkljvªdoltfkdª^qª^ªob^plk^_ibªo^qbª^kaªqe^q) bpmb`f^iivªfkªabsbilmfkdªb`lkljfbp)ªbccb`qfsbªp^cbqvªkbqpª^obªfkªmi^`b+ Pj^iiªlmbkªb`lkljfbpª^obªklqªifhbivªqlªobploqªqlªmolqb`qflkfpqªjb^probpªqe^qªtlria _bªprf`fa^iªdfsbkªqebfoªobif^k`bªlkªqo^ab+ªQebvªe^sbªcbtªlmqflkpªlqeboªqe^kªpqobkdqe * bkfkdªqebfoªp^cbqvªkbqpªqlªjfkfjfpbªqebªprccbofkdªlcªfqpªmlmri^`b+ªFqªfpªqebªi^odbo b`lkljfbpªqe^qª`lriaª_bªqbjmqbaªqlªqrokªfkt^oaª_vªo^fpfkdªqebfoªqo^abª_^oofbop+ª Qlªobar`bªmolqb`qflkfpqªmobpprobpª^qªeljb)ªdlsbokjbkqpªlcªi^odboªb`lkljfbp pelriaªcfkaªt^vpªqlªpqfjri^qbªqebfoªaljbpqf`ªj^ohbqªqeolrdeªjlkbq^o vª^kaªcfp`^i jb^probp+ªPbsbo^iªi^odboªbjbodfkdªb`lkljfbpªfkªB^pqª>pf^ªpelriaª^kaª`lriaªalªpl+ @liib`qfsbivªqebvª`lriaªmi^vª^kªfjmloq^kqªolibª^pª^kªbkdfkbªlcªdoltqeªcloªqebªob`ls * bovªlcªqebªdil_^iªb`lkljv+ª>pªpr`eªqebvª_ofkdª^kª^aabaª_bkbcfqªfkªqebªclojªlcªobar`ba molqb`qflkfpqªmobpprobpªfkªlqeboª`lrkqofbp+ Eltbsbo)ªfqªtfiiªklqª_bªb^pvªqlªpqfjri^qbªqebªaljbpqf`ªj^ohbqª^qª^ªqfjbªlcªcfk^k`f^i `ofpfpª^pªqebªtloiaªfpªc^`fkdªqla^v +ªLkivªbjbodfkdªb`lkljfbpªtfqeªerdbªobpbo sbpª`^k ob^afivªalªpl+ªLqebop)ªifhbªFkalkbpf^)ªtfiiªe^sbªqlªj^hbªpmb`f^iªbccloqpªqlªjl_fifpb ^aafqflk^iªbuqbok^iªcrkafkdªpfk`bªfqª`^kªklªilkdboªobivªlkªfkqbok^qflk^iª_lkaªj^o * hbqp+ª >qªqebªD/-ªPrjjfqªfkªT ^pefkdqlkªA@)ªqebªFkalkbpf^kªMobpfabkqªj^abª^ª`^pbªclo pbqqfkdªrmª^ªpmb`f^iªcrkaªcloªpr`eª^ªmromlpb+ªQefpªt^pªc^slro^_ivªdobbqbaª_vªqebªTloia ?^kh)ª_rqªcroqeboªtlohªtfiiª_bªobnrfobaªqlªj^hbªqebª`lk`bmqªlmbo^qflk^i+ªTe^qbsbo clojªqefpªcrkaªq^hbp)ªfqpªmromlpbªpelriaª_bªqlª^ppfpqªbjbodfkdª^kaªabsbilmfkdª`lrk * qofbpªqlªrkaboq^hbª`lrkqbo*`v`if`^iªcfp`^iªjb^probp+ Fkªj^kvªbjbodfkdª^kaªabsbilmfkdª`lrkqofbpªbufpqfkdªp^cbqv*kbqªmoldo^jpªmolsfab qebªjlpqªfjjbaf^qbª`e^kkbiªcloªafp_ropfkdªqebªobplro `bp+ªEltbsbo)ªp^cbqv*kbqªmol * do^jpªfkªj^kvª`lrkqofbpªkbbaªqlª_bª_b`ljbªjlobªbccb`qfsb+ªQebpbªbccloqpªpelria _b`ljbª^kªfkqbdo^iªm^oqªlcª^ª`ljmobebkpfsbªmlif`vªm^`h^dbªqe^qªjrpqª_bªfkªmi^`bªfk loaboªcloªdlsbokjbkqpªqlª_bª^_ibªqlªbccb`qfsbivªobpfpqªmolqb`qflkfpqªmobpprobpª^qªeljb+ >kªbccb`qfsbªp^cbqvªkbqªmoldo^jªpelriaª_bªpbbkª^pª^ªkb`bpp^o vªcb^qrobªfkªqebª^dbªlc dil_^ifp^qflk+

4 What world leaders must do to halt the spread of protectionism

3) Make effective use of regional cooperation arrangements Obdflk^iª^oo^kdbjbkqpª`^kªebimªabcrpbªmolqb`qflkfpqªmobpprobp+ª@liib`qfsbª^`qflkpªfk ^ªobdflk^iªpbqqfkdª`^kªlcqbkª_bªrpbcriªfkªprmmloqfkdªfkafsfar^iªdlsbokjbkqpªfkªqebfo bccloqpªqlªfjmibjbkqªmlifqf`^iivªafccf`riqªmlif`vªjb^probp+

Qeb >PB>K Prosbfii^k`b Mol`bpp ^p ^k bu^jmib >qªqebªqfjbªlcªqebª.664,65ª>pf^kªcfk^k`f^iª`ofpfp)ª>PB>Kªb`lkljf`ª^kaªcfk^k`bªjfk * fpqbopªtbobªclo `bcriªfkªlmmlpfkdªfkt^oa*illhfkdªmlif`fbp+ªPbsbo^iª^dobbjbkqpªtbob j^abªqlªpqobkdqebkªobdflk^iªcfk^k`f^iª`llmbo^qflk)ªfk`irafkdªqebªabsbilmjbkqªlcª^k >PB>Kªprosbfii^k`bªmol`bpp+ªFqªt^pªpfdkfcf`^kqªqe^qªqebª`ofpfpªt^pªrpbaª_vªqebªdolrmª^p ^ªob^plkªqlª^``bibo^qbªqebªfjmibjbkq^qflkªlcªqebª>PB>Kªcobbªqo^abª^ob^+ªQebvª^ipl tlohbaªqldbqeboªqlªbkprobªqe^qªqo^abªcfk^k`fkd)ªtef`eª`lii^mpbaªarofkdªqebª>pf^kª`of* pfp)ªt^pªnrf`hivªobpqlobaªtfqeªqebª^ppfpq^k`bªlcªqebªfkqbok^qflk^iª`ljjrkfqv +ª>pª^ dolrm)ªqebª>PB>Kª`lrkqofbpª^iplª^dobbaªqlªillhªfkqlªqebªpqobkdqebkfkdªlcªqebfoªp^cbqv kbqªmoldo^jp+ Qebª>MB@ªib^abopªjbbqfkdªqe^qªqllhªmi^`bªfkªMborªlkbªtbbhª^cqboªqebªD/-ªPrjjfq e^sbªobfkclo`baªmlfkqª.0ªlcªqebªD/-ªT^pefkdqlkªAb`i^o^qflkªlkªobco^fkfkdªcoljªq^h* fkdªmolqb`qflkfpqªjb^probpª^kaªlkªtlohfkdªqlt^oapª^ªpr``bppcriª`lk`irpflkªlcªqeb Ale^ªOlrka+ªQefpªfpª^iplª^ªpfdkfcf`^kqªabsbilmjbkq+ª>m^oqªcoljªqebªbfdeqªlsboi^mmfkd jbj_bop)ª>MB@ªe^pª.0ªlqeboªjbj_bopªcoljªqebª>pf^*M^`fcf`ªobdflk+ªQ ldbqeboªqebv pelriaªcroqeboªpqobkdqebkªqebª>MB@ªpqor`qro^iªobclojªmoldo^jpªcl`rpfkdªlkª]_befka* qeb*_loabo$ª^kaª`^m^`fqv*_rfiafkdªfpprbp+ªQefpªtfiiª_bª^ªj^gloªbccloqªqlªebimªobar`b molqb`qflkfpqªmobpprobpªfkªqebªobdflkªlsboªqebªilkdboªqboj+

About the author

E^af Plbp^pqol fp qeb Bub`rqfsb Afob`qlo ^p tbii ^p ^ pbkflo b`lkljfpq ^q qeb @bkqob clo Pqo^qbdf` ^ka Fkqbok^qflk^i Pqrafbp %@PFP& fk G^h^oq^+ Eb t^p ^ jbj_bo lc qeb K^qflk^i B`lkljf` @lrk`fi) ^k ^asfplov `lrk`fi lc Mobpfabkq >_aroo^ej^k T^efa) colj Ab`bj_bo .666 ql Pbmqbj_bo /---+ Eb fp ^ipl ^ jbj_bo lc qeb fkqbok^qflk^i ^asfplov _l^oap lc s^of* lrp fkqbok^qflk^i fkpqfqrqflkp) fk`irafkd Qeb >pf^ Pl`fbqv+ Eb fp >agrk`q Molcbpplo ^q qebObpb^o`e P`elli lc M^`fcf` >pf^k Pqrafbp %OPM>P& ^q qeb >rpqo^if^k K^qflk^i Rkfsbopfqv ^ka e^p ^ipl q^rdeq ^q @lirj_f^ Rkfsbopfqv+ Croqebojlob) eb fp ^ipl ^`qfsbiv fkslisba fk qeb M^`fcf` B`lkljf` @llmbo^qflk @lrk`fi %MB@@&) @lrk`fi clo Pb`rofqv @llmbo^qflk fk >pf^ M^`fcf` %@P@>M& ^ka qeb @lrk`fi clo >pf^ Brolmb @llmbo^qflk %@>B@&+

5

Doha: The last mile in the marathon

Jagdish Bhagwati and Arvind Panagariya Columbia University

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Tfqeªqebªdil_^iªcfk^k`f^iª`ofpfpªib^afkdªqlªbfqeboªob`bppflkªloªab`bibo^qflkªlcªdoltqe fkªsfoqr^iivªbsbo vªj^gloª`lrkqo vªfkªqebªtloia)ªqebªofphªlcª]_bdd^o*qev*kbfde_lrop$ qo^abª_^oofbopªqlªpb`robªaljbpqf`ªj^ohbqpªcloªaljbpqf`ªcfojpªfpªob^i+ª Tefibªpljbªabsbilmfkdª`lrkqofbpªj^vª_bªrpfkdªqebªcibuf_fifqvªmolsfabaª_vªqebªd^m _bqtbbkª^mmifbaª^kaª_lrkaªq^ofccpªqlªmolqb`qªaljbpqf`ªcfojp)ªqebªRPªfpª`lkqbjmi^qfkd ^`efbsfkdªqebªp^jbªl_gb`qfsbªqeolrdeªj^ppfsbªTQL*fk`lkpfpqbkqª_^filrqªpr_pfafbpªql qebª^rqlªfkarpqov+ª @lkpfabobaªfkªfpli^qflk)ªb^`eªlcªqebpbª^`qflkpªj^vªpbbjª_bkbcf`f^iªcloªqebª`lrkqo v q^hfkdªqebª^`qflkªfkªqebªpeloqªorkª_rqªtebkª`lkpfabobaªfkªqlq^ifqv)ªtfqeªqebªilkdªork fjmif`^qflkpªq^hbkªfkqlª^``lrkq)ªqebvª^obªifhbivªqlª_bªerdbivªabqofjbkq^iªqlª^ii+ª Qebobclob)ª^qªqebªD/-ªjbbqfkdªfkªT ^pefkdqlkª^kaª>MB@ªprjjfqªfkªMbor)ªj^glo mi^vbopªe^sbªofdeqivªbjme^pfpbaªqebªkbbaªqlª_ofkdªqebªpq^iibaªAle^ªkbdlqf^qflkpª_^`h lkªqo^`h+ªTefibª^ªcfk^iª^dobbjbkqªtlriaªpbbjªrkifhbivªqfiiªqebªMobpfabkq*bib`qª?^o^`h L_^j^ªe^pªpbqqibaªfkªefpªkbtªgl_ª^kaª^ªkbtªdlsbokjbkqªfpªfkpq^iibaªfkªFkaf^ªfkªJ^v loªGrkbª/--6)ª^kª^dobbjbkqªlkªqebªjla^ifqfbpªj^vª_bªtbiiªtfqefkªqebªdo^pmªlcªqeb jbj_boª`lrkqofbp+ª

Doha modalities can be achieved Mbppfjfpqpªe^sbªobmb^qbaivªmolklrk`baªqebªAle^ªOlrkaªab^a+ªV bq)ªfqªfpªfjmloq^kqªql objbj_boªqe^qªql*a^qbªklªolrkaªe^pªc^fiba+ªQebvªlcqbkª_ob^hªaltk)ª^obªlcqbkªqelrdeq qlª_bªfkªfkqbkpfsbª`^obªtebobªqebªmbppfjfpqpªmobaf`qªqe^qªqebvªtfiiªbumfob)ª^kaªqebv `ljbª_^`hªifhbªqebªmolsbo_f^iª`^qª^kaª^obª`lk`iraba+ªAle^ªtfiiª_bªklªbu`bmqflk+ TebkªqebªAle^ªq^ihpª_olhbªaltkª^qªqebª@^k`rkªJfkfpqbof^iªjbbqfkdªlcªqebªTQL) qebªmofk`fm^iªmi^vbopªcoljªqebªBRª^kaªRPªmr_if`ivª_olhbªfkqlª^`ofjlkv+ªQebªmlpq*`li* i^mpbª^qjlpmebof`pª^qªqebªi^pqªolrkaªlcªkbdlqf^qflkpªfkªDbkbs^ªfkª>rdrpqª/--5ªtbob ^iqldbqeboªjlobª^jf^_ib+ Qerp)ªqebªTQLªAfob`qloªDbkbo^iªM^p`^iªI^jvªe^pªpq^qbaªqe^qªqebªDbkbs^ªjbbqfkd pr``bppcriivªobplisbaªqebªpmb`fcf`pªlcª.4ªafccf`riqªfpprbp)ªib^sfkdªlkivªqeobbªqlª_b qeo^pebaªlrq)ªlcªtef`eªqebªj^gloªlkbªt^pªqebª`lkcif`qªlkª^dof`riqro^iªmolqb`qflkfpj _bqtbbkªFkaf^ª^kaªqebªRP+ªPfk`bªqebª>rdrpqªjbbqfkd)ªFkaf^ªe^pªbumobppbaªpljbªafp * ^dobbjbkqªtfqeªqefpªsfbtª^odrfkdªqe^qªqebobªobj^fkªrkobplisbaªfpprbpªtfqeªobpmb`qªql qebª.4ªfpprbpª`lkpfabobaªobplisbaª_vªJoªI^jv )ªfqªobj^fkpªqorbªqe^qªqebªqeobbªrkob * plisbaªfpprbpªcoljªqebªDbkbs^ªjbbqfkdªtfiiªobj^fkªqebªjlpqª`ofqf`^iªcloª_ofkdfkdªqeb kbdlqf^qflkpªlkªqebªjla^ifqfbpªqlª^ªe^mmvª`lk`irpflk+ª

7 VOX Research-based policy analysis and commentary from leading economists

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The subsidies-SSM deadlock >qªDbkbs^)ªqebªRPªe^aªlccbobaªqlª`^mªfqpªqo^ab*afpqloqfkdªpr_pfafbpª^qª!.1+2ª_fiiflk+ Qefpªpr_pfavªbu`bbapªfqpª`roobkqªm^vlrq)ªtef`eªfpªmi^`baª^qª!6ª_fiiflkªloªibppª^``loa * fkdªqlªmr_ifpebaªobmloqp+ªQebªRPªe^pª/ªjfiiflkªc^ojbop+ªFkaf^)ªtef`eªe^pªkb^oivªqtl* qefoapªlcªfqpªmlmri^qflkªfkªqebªoro^iªpb`qlo )ªe^pªerkaobapªlcªjfiiflkpªlcªpj^iiªpr_pfp * qbk`bªc^ojbop+ªC^`baªtfqeª`ljmbqfqflkªcoljªpr_pfafpba)ªlcqbkªi^odbªc^ojp)ªFkaf^Öpªob^`* qflkªe^pª_bbkªbu^`qivªifhbªqe^qªfkªqebªRPªtebobªklqefkdªtlohpªrmªmlifqf`f^kpª^kaªil_* _vfpqpªjlobªqe^kªqebªlcqbk*fj^dfkba)ªklqªbsbkªob^i)ª^iibd^qflkªqe^qªclobfdkbopª^obªpr_* pfafpfkdªqebfoªmolar`qpª]rkc^foiv +$ªPl)ªgrpqª^pªqebªRP)ªcb^ocriªlcª`ljmbqfqflkªcolj @efk^)ªfkqolar`baª^kªrkmob`babkqbaªmolar`q*pmb`fcf`ªp^cbdr^oaªfkªfqpª_fi^qbo^iª^dobb * jbkqªlcªKlsbj_boª.666ª^kaª^ªpmb`f^iªqbuqfibªp^cbdr^oaªarofkdªqebªqo^kpfqflkªqlªcobbo qo^abªfkªqbuqfibp)ªFkaf^ªt^kqbaª^ªPmb`f^iªP^cbdr^oaªJb`e^kfpjª%PPJ&+ª QebªPPJªFkaf^ªmolmlpba)ªeltbsbo )ªt^pªbu`bppfsbª^kaªrk^``bmq^_ibªqlªqebªRP) tef`eªe^aªsfoqr^iivªmflkbbobaªqebªmo^`qf`b+

The essential compromise Qebª`bkqo^iªmol_ibjªqebobclobª^olpbªcoljªqebªc^`qªqe^qªqebªRPªlccboªlkªqo^ab*afpqloq * fkdªpr_pfafbpªt^pªqllªilt )ªmoljmqfkdª^kªrk^``bmq^_ibªFkaf^kªabj^kaªcloª^kªlsbo* `^rqflrpªPPJ+ª BsfabkqivªqebªplirqflkªifbpªfkªqebªRPª`^mmfkdªqebªafpqloqfkdªpr_pfafbpª^qª^ªjfkfjrj lcªqebª`roobkqªm^vlrqp+ªKlqefkdªmobsbkqpªfqªcoljªpmbkafkdªjlobªfkpqb^aªlkªklk*afp * qloqfkdªpr_pfafbpªtef`eªalªklqª^ccb`qªlrqmrqª%^kaªebk`bªqo^ab&ª_rqªtef`eª^obªdfsbk) cloªfkpq^k`b)ªcloªbksfolkjbkq^iªfjmolsbjbkqpª^kaªcloªo^fpfkdªmlriqo vª^kaª`^qqibªfk ^kªbqef`^iiv*^``bmq^_ibªc^peflk+ªFkªobqrok)ªFkaf^ª`lriaªprobivª^dobbªqlª^ªpboflrpªaltk* p`^ifkdªlcªqebªPPJ+ Qefpªplirqflkªfpªklqªmlifqf`^iivªfjmlppf_ib+ªFqªobnrfobpªqebªRPªqlªjlsbª^t^vªcroqebo coljªafpqloqfkdªpr_pfafbp)ª^kaªpr_pqfqrqfkdªqebjªtfqeªklk*afpqloqfkdªpr_pfafbp)ª^ jlsbªqe^qªfpªprobivªmlppf_ibªpfk`bªqlq^iªc^ojªprmmloqª`^kª_bªj^fkq^fkbaªtefibªfqpª`lj* mlpfqflkª`e^kdbpªfkª^ªmol*qo^abªafob`qflk+

Higher food prices help >kª^aafqflk^iªc^`qloªqe^qªj^hbpª^ª`ljmoljfpbªlkªpr_pfafbpªcb^pf_ibªfpªqebªob`bkq fk`ob^pbªfkªcllaªmof`bp+ª Qebªobjls^iªlcªpr_pfafbpªlkª^dof`riqrobªe^pª_bbkªpqobkrlrpivªobpfpqba)ªm^oqf`ri^oiv fkªqebªRP)ª`^rpfkdªFkaf^ªqlª^odrbªqe^qª^kvªlmbkfkdªrmªlcª^dof`riqrobªtlriaª_bªalr_iv afccf`riqªmlifqf`^iivª_b`^rpbªbumlpfkdªlkbÖpªc^ojbopªqlªqebªfjm^`qªlcªefdeivªpr_pfafpba clobfdkªmolar`bopªfpªobd^oabaª^pªvfbiafkdªqlªrkc^foªqo^ab+ªQebªClla)ª@lkpbos^qflkª^ka Bkbodvª>`q)ªm^ppbaªfkªqebªRPªfkªJ^vª/--5)ªe^pª_bbkª^ªqboof_ibªpqbmª_^`ht^oap)ªelia * fkdªrmªqebª^dof`riqro^iªif_bo^ifp^qflkªtfqelrqªtef`eªAle^ªtfiiªc^fi+ª?rqªkltªqe^qªclla mof`bpªe^sbªofpbkªao^j^qf`^iiv )ªqebªm^vlrqpªqlªRPªc^ojbopªtfiiª_bª^ijlpqªkbdifdf_ib pfk`bªqebvªs^ovªfksbopbivªtfqeªj^ohbqªmof`bp+ª Efdeªmof`bpª^obªbumb`qbaªqlª`lkqfkrb)ªplªqebªkbbaªcloªpr_pfavªtfiiª^iplªobj^fkªkbd* ifdf_ib+ªFqªpelriaªqebobclobª_bªmlppf_ibªqlªplcqbkªpfdkfcf`^kqivªRPªlmmlpfqflkªqlªobpqof`q* fkdªmlpq*Ale^ª^dof`riqro^iªpr_pfavªm^vjbkqpªqlªiltboªibsbip)ªj^hfkdªfqªifhbivªqe^q Fkaf^ªtlriaªobpmlkaª^kaªj^hfkdªAle^ªpr``bppªmlppf_ib+

8 What world leaders must do to halt the spread of protectionism

Qebª`ljmoljfpbªlkªqebªm^oqªlcªqebªRPªtfiiªj^hbªfqªb^pfboªcloªFkaf^ªqlª`ljmoljfpb lkªqebªPPJ+ªEbobªqebªmlfkqªj^abª_vªb`lkljfpqªOl_boqª?^iatfkªfpªfjmloq^kqª^ka jrpqª_bª_olrdeqªqlªqebªclobcolkqªlcªqebªkbdlqf^qflkp+ . @roobkqiv)ªqebªkbdlqf^qflkp e^sbªcl`rpbaªlkªabcfkfkdªqebªqofddboªmlfkqpªcloªqebªPPJªfkªqbojpªlcªmbo `bkq^db fk`ob^pbªfkªfjmloqp+ªTebkªfkfqf^iªfjmloqpª^obªqfkv )ªbsbkª^ªpj^iiª^_plirqbªfk`ob^pbªfk fjmloqpªqe^qª`lriaª`^rpbªifqqibªfkgro vªqlªqebªaljbpqf`ªc^ojbopªtlriaªqo^kpi^qbªfkql i^odbªmbo`bkq^dbªfk`ob^pbª^kaªqofddboªqebªp^cbdr^oa+ª>pª?^iatfkªmlfkqpªlrq)ªqebªb`l * kljf`^iivªjb^kfkdcriªabcfkfqflkªlcªqofddboªmlfkqpªfpªfkªqbojpªlcªfjmloqpª^pª^ªmbo `bkq* ^dbªlcªqlq^iª`lkprjmqflk+

About the authors

G^dafpe ?e^dt^qf fp Rkfsbopfqv Molcbpplo ^q @lirj_f^ Rkfsbopfqv ^ka Pbkflo Cbiilt fk Fkqbok^qflk^i B`lkljf`p ^q qeb @lrk`fi lk Clobfdk Obi^qflkp+ Eb e^p _bbk B`lkljf` Mlif`v >asfpbo ql qebk D>QQ Afob`qlo Dbkbo^i >oqero Arkhbi) Pmb`f^i >asfpbo ql qeb RK lk Dil_^ifp^qflk) ^ka Buqbok^i >asfpbo ql qeb TQL+ Eb pbosba lk qeb Bumboq Dolrm ^mmlfkqba _v qeb Afob`qlo Dbkbo^i lc qeb TQL lk qeb Crqrob lc qeb TQL ^ka qeb >asfplov @ljjfqqbb ql Pb`obq^ov Dbkbo^i Hlcf >kk^k lk qeb KBM>A mol`bpp fk >cof`^ ^p tbii ^p jbj_bo lc qeb Bjfkbkq Mboplkp Dolrm lk qeb crqrob lc RK@Q>A+ Cfsb slirjbp lc efp p`fbkqfcf` tofqfkdp ^ka qtl lc efp mr_if` mlif`v bpp^vp e^sb _bbk mr_ifpeba _v JFQ mobpp+ Efp i^qbpq _llh fp7 ]Qbojfqbp fk qeb Qo^afkd Pvpqbj7 Elt Mobcbobkqf^i >dobbjbkqp Rkabojfkb Cobb Qo^ab$ %Lucloa&+

>osfka M^k^d^ofv^ fp qeb G^dafpe ?e^dt^qf Molcbpplo lc Fkaf^k Mlifqf`^i B`lkljv # Molcbpplo lc B`lkljf`p ^q @lirj_f^ Rkfsbopfqv) e^sfkd mobsflrpiv q^rdeq ^q qeb Rkfsbopfqv lc J^ovi^ka ^ka pbosba ^p @efbc B`lkljfpq lc qeb >pf^k Absbilmjbkq ?^kh+ Eb e^p ^ipl tlohba tfqe qeb Tloia ?^kh) FJC) TQL) ^ka RK@Q>A fk s^oflrp `^m^`fqfbp+ Qeb ^rqelo lc j^kv ^oqf`ibp ^ka qbk _llhp) efp jlpq ob`bkq _bfkd7 ]Fkaf^7 Qeb Bjbodfkd Df^kq$ %Lucloa&+ Eb fp ^ipl baf* qlo lc qeb Fkaf^ Mlif`v Clorj ^ka qeb clrkafkd bafqlo lc qeb Glrok^i lc Mlif`v Obcloj+

1 ‘How to resolve the Doha stalemate: A better agricultural safeguard trigger’, 25 September 2008, http://voxeu.org/index.php?q=node/1697.

9

What should leaders do to stop the spread of protectionism?

Gary Clyde Hufbauer and Jeffrey J. Schott Peterson Institute for International Economics

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LkªKlsbj_boª.2qe)ª^qªqebªT ^pefkdqlkªPrjjfq)ªD/-ªib^abopªcoljª^`olppªqebªdil_b ^`hkltibadbaªqebªpbsbobªb`lkljf`ªaltkqrokª^kaªmibadbaªklqªqlªj^hbªqefkdpªtlopb _vªo^fpfkdªqo^abª_^oofbop+ªLkªKlsbj_boª/1qe)ª^qªqebª>MB@ªPrjjfqªfkªMbor)ª>pf^*M^`fcf` ib^abopªmibadbaªjr`eªqebªp^jb+ªJfppflkª^``ljmifpeba<ªMolqb`qflkª^sboqba<ªE^oaiv + Qebªq^phªe^pªgrpqª_bdrk+ªDo^abªfkci^qflkªfpª^ªafpb^pbªlcªlroªbo^)ª^kaªklªtebobªfpªqeb ^ccif`qflkªtlopbªqe^kªfkªqebªjfkapªlcªk^qflk^iªib^abop+ªIbcqªqlªqebfoªltkªp`lob`^oap) b^`eª^kaªbsbo vªib^aboªtfiiªab`i^obªefpªdlsbokjbkqªfkªcriiª`ljmif^k`b)ª^kª>(ªdo^ab+ BsbkªqebªOrppf^kªMobpfabkqªJbasbabs )ªtelªelfpqbaª^rqljl_fibªq^ofccpªtebkªeb obqrokbaªqlªJlp`ltªcoljªqebªD/-ªprjjfq)ª^kaªFkaf^kªMofjbªJfkfpqboªPfkde)ªtel g^`hbaªrmªpqbbiªq^ofccpªpllkª^cqbo)ªpbbªklªfk`lkpfpqbk`vª_bqtbbkªabbapª^kaªtloap+

Letter versus spirit of the commitment Fkªibd^iªqbojp)ªqebªt^vt^oaªprjjfqbbopª^obªtfqefkªqebfoªofdeqp)ªbsbkªfcªqebfoª^`qflkp _i^q^kqivªsfli^qbªqebªpmfofqªlcªqebfoª`ljjfqjbkqp+ªQebªTQLª^iiltpªjbj_bopªql fjmlpbª^ªs^ofbqvªlcªjb^probpªqlªmolqb`qªaljbpqf`ªcfojp7ª^kqfarjmfkd)ª_^i^k`bªlcªm^v* jbkqpª^kaªdbkbo^iªp^cbdr^oap)ª>oqf`ibªUUªbu`bmqflkpªcloªcllaª^kaªmolar`qªp^cbqvª%^ka mlppf_ivª`ifj^qbª`e^kdbªmlif`fbp&)ª^kaª_llpqfkdª^mmifbaªq^ofccpªrmªqlª_lrkaªibsbip+ªRpb lcªqebpbªjb^probpªqbkapªqlªfk`ob^pbª^pªb`lkljf`ª`lkafqflkpªabqboflo^qb)ªplª/--6ª`lria tbiiªpbbª^ª_lljªfkªqebªbob`qflkªlcª]TQL*`lkpfpqbkq$ªqo^abª_^oofbop+ª

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11 VOX Research-based policy analysis and commentary from leading economists mibadbpªfpªqlªpqlmªqebªpifabªfkqlªqebªtloiaªlcªqo^abª`lkqo^`qflk)ªklqªqlªjfk`bªibd^i kf`bqfbp+

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12 What world leaders must do to halt the spread of protectionism

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About the authors

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13

What should world leaders do to halt a resurgence of protectionism?

Ann Capling University of Melbourne

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Practicing Keynes at home might make it harder to practice Smith abroad Fqªfpªklqªe^oaªqlªpbbªeltªqefpª`lriaªib^aªqlª^ªo^q`ebqfkdªrmªlcªmolqb`qflkfpqªabj^kap+ Ab_^qbpªlkªqebªjbofqpªlcªcobbªqo^abªqe^qª^obªkltª`lkpfabobaªpbqqibaªj^vª^pªvbqª_b`ljb rkpbqqibaª_vªqebªmolpmb`qªlcª^ªabbmª^kaªilkdªdil_^iªob`bppflk+ªQ lª_bªprob)ªtbª^obªklq ifhbivªqlªpbbª^ªobmb^qªlcªqebªpmfo^iifkdªmolqb`qflkfpjª^kaªÖqfqªcloªq^qÖªpqo^qbdfbpªlcªqeb .60-p+ªKlkbqebibpp)ªfqªfpªtloqeªobjbj_bofkdªqe^qªqebobªfpªpqfiiªmibkqvªlcªp`lmbªcloªqeb obqrokªlcªlia*c^peflkbaªmolqb`qflkfpj+ª

15 VOX Research-based policy analysis and commentary from leading economists

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Find new ways of doing business in the WTO @lk`irafkdªqebªAle^ªOlrkaªtfiiªe^sbªqebª^aafqflk^iª_bkbcfqªlcªaofsfkdªeljbªqeb fjmloq^k`bªlcªqebªTQLªqlªc^`fifq^qbªfkqbok^qflk^iªqo^abª`llmbo^qflk+ªFkabba)ªfcªmobp * probªcloªkbtªmolqb`qflkªd^qebopªjljbkqrj)ªdlsbokjbkqpªtfiiªd^fkª^ªobkbtbaª^mmob* `f^qflkªlcªqebª_bkbcfqpªlcª`liib`qfsbª^`qflkªqeolrdeªqebªTQL)ª^pªmobcbobkqf^iªqo^ab ^dobbjbkqpª`^kklqªpr_pqfqrqbªcloªjriqfi^qbo^iªoribpªfkªqefpªobd^oa+ª>kaªtfqeªkb^oªrkf * sbop^iªjbj_bopefm)ª`lkpbkprpªab`fpflk*j^hfkd)ª^kaª^ª`ljjfqjbkqªqlªqo^kpm^obk`v ) m^oqf`fm^qflk)ª^kaªfk`irpfsbkbppªfkªfqpªmol`bppbp)ªqebªTQLªe^pª^ªibsbiªlcªmlifqf`^iªibdfq* fj^`vªqe^qªfpª^_pbkqªfkªlod^kfp^qflkpªifhbªqebªFJCª^kaªqebªD4,5ªdolrmfkd+ªQebªTQL fpªifhbivªqlª_b`ljbªjlobªklqªibppªfjmloq^kqªqlªdil_^iªdlsbok^k`bªfkªqebªcrqrob+

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About the author

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17

Protectionism and the crisis

R. V. Kanoria Kanoria Chemicals & Industries Ltd. and ICC

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20 What world leaders must do to halt the spread of protectionism

Conclusion B`lkljf`ªbsbkqpªfkªqebªm^pqªab`^abªe^sbªob^ccfojbaªqebªkbbaªcloªcobboª^kaªjlobªlmbk qo^ab+ªFª_bifbsbªqe^qªqebªm^qeªqlªif_bo^ifp^qflkª`^kklqª_bª^iiltbaªqlª_bªobsbopba _b`^rpbªalfkdªplªtlriaªco^djbkqªqebªdil_^iªb`lkljvªqlªqebªbuqbkqªqe^qªfqªj^v _b`ljbªavpcrk`qflk^i+ªQebª`^iiªlcªqebªa^v)ªqebobclob)ªfpªqlªbkprobªqe^qªqebªTQLªkbdl* qf^qflkpªob^`eª^ªmlpfqfsbª`lk`irpflk+ª>qªqebªp^jbªqfjb)ªqebobªfpªkbbaªqlªbkprobªqe^q dil_^iªcfk^k`f^i)ªcfp`^iª^kaªjlkbq^o vªpvpqbjpª^obª^abnr^qbivªobdri^qbaªfkª^ªqo^kpm^o * bkqª^kaªoribª_^pbaªj^kkbo+

About the author

O+S+ H^klof^ fp @e^foj^k # J^k^dfkd Afob`qlo lc H^klof^ @ebjf`^ip # Fkarpqofbp Ifjfqba ^ka Mobpfabkq lc F@@ Fkaf^+ Eb ^ipl `e^fop lc qeb @ljjfppflk lk Fkqbok^qflk^i Qo^ab ^ka Fksbpqjbkq Mlif`v lc qeb Fkqbok^qflk^i @e^j_bo lc @ljjbo`b) M^ofp+) e^sfkd eb^aba pbsbo^i Glfkq ?rpfkbpp @lrk`fip) fk`irafkd Fkaf^*>rpqo^if^) Fkaf^*Kbt Wb^i^ka) Fkaf^*Kbqeboi^kap ^ka Fkaf^*Q^ft^k+ Eb e^p _bbk ^ m^oq lc qeb lccf`f^i Fkaf^k dlsbokjbkq abibd^qflkp clo qeb TQL Fkqbo Jfkfpqbof^i Jbbqfkdp+ Eb e^p ^k J?> %Elklrop& colj FJA) Ptfqwboi^ka) ^ka >as^k`ba J^k^dbjbkq Moldo^jjb colj Te^oqlk+

21

Protecting open markets

Robert Z. Lawrence Harvard University

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Qebªtloiaªb`lkljvªfpªfkªqebªdob^qbpqªgblm^oavªpfk`bªqebª.60-p+ªQebª`ofpfpªe^pªpmob^a qeolrdeªdil_^iªcfk^k`f^iªj^ohbqpªifhbª^ªsforibkqªm^kabjf`)ªib^sfkdªklª`lrkqo vªrk^c* cb`qba+ªMirjjbqfkdªcobfdeqªo^qbpª^kaªj^ppfsbªfksbkqlovª_rfia*rmpªlkªqebªal`hpª^qqbpq qe^qªqebª`ofpfpªe^pªpmob^aªqlªdil_^iªj^ohbqpªcloªdllapª^kaªpbo sf`bp+ª ?rqªqebªtlopqªfpªvbqªqlª`ljb8ªqebªob^iªb`lkljvªtfiiªfkbsfq^_ivªc^iiªjlobªabbmivªfkql ob`bppflk+

Countries hang together or they are hanged separately Fcªqebobªt^pªpqfiiªkbbaªcloªbsfabk`bªlcªdil_^iªb`lkljf`ªfkqboabmbkabk`b)ªfqªt^pªprobiv molsfabaª_vªqebªt^vªklª`lrkqovªe^pª_bbkªpm^oba+ªQebªfab^ªqe^qªdoltqeªfkªabsbilmfkd `lrkqofbpª`lriaª_bªprpq^fkbaªabpmfqbªqebªpirjmªfkª^as^k`baª`lrkqofbpªåªab`lrmifkdªå e^pªmolsbkªjfpdrfaba+ªQla^vªqebª`elf`bªfpª`ib^o8ª`lrkqofbpªe^kdªqldbqeboªloªqebvª^ob e^kdbaªpbm^o^qbiv+ª

Will we repeat the Great Depression? Efpqlof^kpªab_^qbªtebqeboªqebªPjllq*E^tibvªq^ofccpªfkªqebªRPª^kaªqebªmolqb`qflkfpq obpmlkpbpªqebvªbkdbkabobaªfkªlqeboª`lrkqofbpª^`qr^iivª`^rpbaªqebªDob^qªAbmobppflk+ ?rqªcbtªafpmrqbªqe^qªqebªmob`fmfqlrpªab`ifkbªfkªdil_^iª`ljjbo `bª_bqtbbkª.60-ª^ka .600ªj^abªqebªabmobppflkªtlopb+ªBccloqpª_vªqebªRPª^kaªfqpªqo^afkdªm^oqkbopªqlª_lqqib rmªabj^kaª^qªeljbªtfqeªq^ofccpªmolsbaª`lrkqbomolar`qfsbª_b`^rpbªfqªibaªqlª^ªsf`flrp `fo`ibªlcªobq^if^qflkªqe^qªfkªqebªbkaªj^abªbsbo vlkbªtlopbªlcc+ Rkifhbªqebª.60-p)ªmlif`vj^hbopªqla^vª^obªjlsfkdªpmbbafivª^kaªab`fpfsbivªqlªork i^odboª_radbqªabcf`fqpª^kaªbum^kpflk^o vªjlkbq^ovªmlif`v+ªCfk^k`f^iªmlif`vj^hbopª^ob ^iplªqovfkdªtfqeªfjmobppfsbªfkdbkrfqvªqlª^slfaªqebªjfpq^hbpªlcªqebfoªefpqlof`^iª`lrk * qbom^oqpªtelªpqllaª_vª^kaª^iiltbaªj^ppfsbª_^khªc^firobp+ª Fqªobj^fkpªqlª_bªpbbk)ªeltbsbo )ªtebqeboªqo^abªmlif`vj^hbopª`^kªalªifhbtfpb+ªQerp c^oªqebfoªbccloqpªe^sbª_bbkªafp^mmlfkqfkd+ªTbªkbbaªab`fpfsbª^`qflkªåªjlobªjb^kfkdcri `ljjfqjbkqpªqlª^slfaªkbtªafp`ofjfk^qlo vªjb^probpª^d^fkpqªclobfdkªmolar`qpª^ka cfojp)ª^kaª^ªpmbbavªbkaªqlªqebªAle^ªOlrka+

23 VOX Research-based policy analysis and commentary from leading economists

Can Obama keep those new jobs at home? J^kvª`lrkqofbpª^obªkltªpfjriq^kblrpivª^almqfkdªmoldo^jpªlcªcfp`^iªpqfjrirpªqlªlcc * pbqªqebªobqobk`ejbkqpªfkªmofs^qbª`lkprjmqflkª^kaªfksbpqjbkq+ªPfk`bªb`lkljfbpªe^sb _b`ljbªjlobªlmbk)ªpljbªlcªqebªpqfjrirpªtfiiªfkbsfq^_ivªib^hª^_ol^a+ªQebªAb`bj_bo 5qeª`lsboªlcª?rpfkbppªT bbhªJ^d^wfkbªo^fpbpªnrbpqflkpª^_lrqª_vª^phfkd7ª]@^kªL_^j^ hbbmªqelpbªkbtªgl_pª^qªEljb<$ª?rqªfqªfpªc^oª_bqqboªqlª`ob^qbª^ªsfoqrlrpª`v`ibªfkªtef`e `lrkqofbpªmolmªb^`eªlqeboªrm)ªqe^kªqlªobmb^qªqebªbumbofbk`bªfkªtef`eªqebvªao^ddba b^`eªlqeboªaltk+

The WTO bulwark Qebªtloiaªb`lkljvªfpª_bqqboªlccªqla^vª_b`^rpbªfqªe^pªbpq^_ifpebaª^ªjriqfi^qbo^iªpvpqbj _^pbaªlkªqebªoribªlcªi^tªqe^qªe^pª_lrkaªq^ofccpªcloªqebªjlpqªm^oqª^qªc^foivªiltªo^qbpªfk absbilmbaªb`lkljfbp+ªFqªfpªrkifhbivªqebobclob)ªqe^qªmolqb`qflkªtfiiªq^hbªqebªlsboqªcloj lcªo^fpfkdª^sbo^dbªq^ofccpªqlª3-"ªibsbip+ªKlkbqebibpp)ª^pªdlsbokjbkqpªj^ppfsbiv fk`ob^pbªfkslisbjbkqªfkªqebfoªaljbpqf`ªb`lkljfbp)ªqebfoªmolqb`qflkfpjª`lriaªq^hb jlobªpr_qibªclojpªqe^qª`lriaªmolsbªsbo vªa^j^dfkd+ª

Beware financial sector nationalisations Fkªj^kvª`lrkqofbp)ªi^odbªm^oqpªlcªqebªcfk^k`f^iªpvpqbjª^obªbccb`qfsbivª_bfkdªk^qflk * ^ifpba+ªCfojpªfkªlqeboªpb`qlopª^obªob`bfsfkdªdlsbokjbkqªcfk^k`f^iªprmmloq+ªQebªqbjm * q^qflkªqlª^almqªjb^probpªqe^qªafp`ofjfk^qbª^d^fkpqªclobfdkªcfojpª^kaªmolar`qpªfkªqefp `lkqbuqªfpªsbovªpqolkd+ª >pªk^qflk^iªmlif`vj^hbopªq^hbª^`qflkpªqlª_lipqboªqebfoªaljbpqf`ªb`lkljfbpªqebv kbbaªqlª_bª`lkqfkrlrpivªobjfkabaªlcªqebªa^kdbopªlcª_bdd^o*qev*kbfde_lroªmlif`fbp+ TQLªoribpªmolef_fqªpr_pfafbpªc^slrofkdªaljbpqf`ªlsboªfjmloqbaªlrqmrq)ª_rqªfqªtfiiª_b buqobjbivªqbjmqfkdªcloª`lrkqofbpªqlª`lkcfkbªqebfoªmoldo^jpªqlªaljbpqf`^iivªltkba cfojp+ª QebªRPª@lkdobpp)ªcloªbu^jmib)ªfpª`roobkqivªab_^qfkdª^ªmi^kªqlª_^fiªlrqªqebª?fd*Qeobb RPª^rqlj^hbop+ªTe^qªfjm^`qªtfiiªpr`eª^ªmi^kªe^sbªlkªclobfdk*ltkbaª^rqlª`ljm^kfbp fkªqebªRPª^kaªqelpbªqe^qªbumloqª^rqlpªqlªqebªRP<ªPfjfi^oiv )ªqebobªfpªrk`boq^fkqv tebqeboªqebªq^uª_ob^hpªdo^kqbaªRP*ltkbaª_^khpªfkªqebªob`bkqª!4--ª_fiiflkª_^filrq ^mmivªqlªclobfdkªltkbaª_^khpªqe^qªlmbo^qbªfkªqebªRP+ª

New pledges on subsidies and a WTO surveillance mechanism are needed Fqªfpªtloovfkdªqe^qªtefibªqebªob`bkqªpq^qbjbkqªlcªD/-ªib^abopªrkabop`lobaªqebª`ofqf`^i fjmloq^k`bªlcª]obgb`qfkdªmolqb`qflkfpj)ª^kaª^slfafkdªTQL*fk`lkpfpqbkqªjb^probpªql pqfjri^qbªbumloqp)$ªqebobªt^pªklªjbkqflkªlcª^slfafkdªafp`ofjfk^qlo vªaljbpqf`ªpr_pf* afbp+ QebªD/-ªpelriaªkltªbumif`fqivªbuqbkaªqebfoª^kqf*molqb`qflkªmibadbªqlªfk`irabªkbt pr_pfafbpª^kaªafp`ofjfk^qlovªmol`robjbkqªpmbkafkd+ª>kaªqebvªpelriaª_^`hªrmªqebpb mibadbpª_vªbpq^_ifpefkdª^ªTQLªprosbfii^k`bªjb`e^kfpjªqlªtef`eª^iiªjbj_bopªtlria obmloqªte^qªjb^probpªqebvª^obªq^hfkd+ Tefibªmlif`vj^hbopªtfiiª_bªmobl``rmfbaªtfqeªobpqlofkdªcfk^k`f^iªpq^_fifqvª^ka obkbtfkdªb`lkljf`ªdoltqe)ªqebvª^obª^iplªifhbivªqlªrkaboq^hbªlqeboªmlif`fbp)ª_lqe aljbpqf`^iivª^kaªqeolrdeªfkqbok^qflk^iª^dobbjbkqp)ªqlªab^iªtfqeª`ifj^qbª`e^kdb)ªqbo* olofpj)ªcllaªp^cbqvª^kaªcllaªpb`rofqv +ª>iiªlcªqebpbª^obªibdfqfj^qbªpl`f^iª`lk`bokpª^ka fkªpljbª`^pbp)ªfqªjfdeqª_bªkb`bpp^ovªqlª^almqªjb^probpªqe^qªfjm^`qªqo^ab+ª?rqª^pªtfqe aljbpqf`ªpr_pfafbp)ªqebªmofk`fmibªqe^qªfkqbo sbkqflkªpelriaª^aebobªqlªqebªib^pqªqo^ab*

24 What world leaders must do to halt the spread of protectionism afpqloqfkdª^mmol^`eªpelriaª_bª^almqba+ª?loaboªq^ubpªlkª`^o_lkª`lkqbkqª^kaª`ljmif * `^qbaª`boqfcf`^qflkªp`ebjbpªcloªfjmloqbaª_fl*crbipª^obªc^oªibppªabpfo^_ib)ªcloªbu^jmib) qe^kªe^sfkdª^iiª`lrkqofbpª^almqª_fkafkdª`ljjfqjbkqpªlkª`ifj^qbª`e^kdbª^kaªprp * q^fk^_ibªmo^`qf`bp+ªPfjfi^oiv )ªbkprofkdªcllaªpb`rofqvªqeolrdeªfksbkqlo vªmlif`fbpª^ka ilkdªqbojªprmmivª`ljjfqjbkqpªcoljªbumloqbopª^obªc^oªmobcbo^_ibªqlªbccloqpªqlª^`efbsb pbic*prccf`fbk`v+

Save the Doha Round Qebªlqeboªfqbjªcloª^`qflkªfpª`lk`irafkdªqebªAle^ªOlrka+ªQebª`roobkqªpbkpbªlc rodbk`vªkbbapªqlª_bªjl_fifpba+ªKlqefkdªtlriaª_bªjlobªbccb`qfsbªfkªrkabop`lofkd dil_^iª`ljjfqjbkqªqlª^kªlmbkªjriqfi^qbo^iªqo^afkdªpvpqbjªqe^kª^ªpmbbavª^dobbjbkq qe^qª`^mqrobpªte^qªfpªkltªlkªqebªq^_ib+ª Lkbªtlriaªe^sbªelmbaªlroªib^abopªtlriaªe^sbªob^ifpbaª^iiªqefp+ª?rqªqebª_bpqªqeb D/-ªib^abopª`lriaªalªob`bkqivªt^pªqlªobqob^qªfkqlª_rob^r`o^qf`ªg^odlkª^kaªfkpqor`q qebfoªqo^abªjfkfpqbopªqlª]pqofsb$ªqlªob^`eª^dobbjbkqªlkªqebªAle^ªOlrkaªjla^ifqfbpª_v vb^oªbka$+ªPqofsb<ª]Grpqªjla^ifqfbp$ªQe^qÖpªm^qebqf`+ªTevªklqªfkpqor`qflkpªpfjmivªql ob^`eª^dobbjbkq<

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About the author

Ol_boq W+ I^tobk`b fp qeb >i_boq I+ Tfiif^jp Molcbpplo lc Qo^ab ^ka Fksbpqjbkq ^q qeb GlekC+ Hbkkbav P`elli lc Dlsbokjbkq ^q E^os^oa Rkfsbopfqv) ^ka Pbkflo Cbiilt ^q qeb Mbqboplk Fkpqfqrqb clo Fkqbok^qflk^i B`lkljf`p fk T^pefkdqlk) e^sfkd mobsflrpiv pbosb ^p ^ jbj_bo lc Mobpfabkq @ifkqlk$p @lrk`fi lc B`lkljf` >asfpbop+ Eb ^ipl ebia qeb Kbt @bkqrov @e^fo ^p ^ klk*obpfabkq Pbkflo Cbiilt ^q qeb ?ollhfkdp Fkpqfqrqflk ^ka clrkaba ^ka bafqba qeb glrok^i ?ollhfkdp Qo^ab Clorj+ ?bclob `ljfkd ql E^os^oa) eb q^rdeq ^q Glekp Elmhfkp P`elli lc >as^k`ba Fkqbok^qflk^i Pqrafbp ^ka V^ib+ Eb e^p pbosba ^p ^ `lkpriq^kq ql qeb Cbabo^i Obpbosb ?^kh lc Kbt Vloh) qeb Tloia ?^kh) qeb LB@A) ^ka RK@Q>A+ Qeb ^rqelo lc krjbo* lrp p`fbkqfcf` ^oqf`ibp ^ka _llhp) efp jlpq ob`bkq fp7 @^pb Pqrafbp fk RP Qo^ab Kbdlqf^qflk %/--3&+

25

Keeping the global economy open

Wendy Dobson University of Toronto

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Qebªlmbkªqo^afkdªpvpqbjªfpª^ªclojªlcªdil_^iªmr_if`ªdlla+ªBsbo vlkbª_bkbcfqpªcoljªfqp bufpqbk`b)ªtebqeboªqebvªmolqb`qªfqªloªklq)ªvbqª`ellpfkdªqebfoªk^ooltªk^qflk^iªfkqbobpqp lsboªqebª`liib`qfsbªfkqbobpqª`^kª_ofkdª^_lrqªfqpªabjfpb+ª >pªqebªdil_^iªcfk^k`f^iª`ofpfpªbkqbopªqebªkbuqªme^pbªfkªtef`eªdoltqeªfpªpiltfkdª^ka j^gloªfkarpqof^ifpbaª`lrkqofbpªbkqboªob`bppflk)ªmlifqf`f^kpªtfiiª_bªmobpprobaª_vªfkqbo * bpqªdolrmp+ªD/-ªib^abopª^qªqebfoªjbbqfkdªlkªKlsbj_boª.2qeªob`ldkfpbaªqebª`liib`qfsb fkqbobpqªfkªhbbmfkdªqebªdil_^iªb`lkljvªlmbk+ªKltªqebvªkbbaªqlªcliiltªqebªbu^jmib lcªB^pqª>pf^kªdlsbokjbkqpªfkªqebªt^hbªlcªqebª.664*65ªcfk^k`f^iª`ofpfpªtelªmrqªjlob) klqªibpp)ªbjme^pfpªlkªqo^abªlmbkkbpp+ªPqolkdªdoltqeªfkªqo^abªqeolrdeª`olpp*_loabo molar`qflkª`e^fkpªcliiltbaª^kaªobdflk^iªqo^abª^dobbjbkqpª%OQ>p&ªmolifcbo^qbaªfkªm^oq _b`^rpbªlcªrk`boq^fkqfbpª^_lrqªqebªcrqrobªlcªqebªjriqfi^qbo^iªqo^abªkbdlqf^qflkp+ AbpmfqbªqebªD/-ªmibadb)ªqebªob`bkqªofpbªfkªfjmloqª_^oofbopª_vªpljbª`lrkqofbpªfpªafp * nrfbqfkdª^kaª`ljjfqjbkqpªqlª`ljmibqbªqebªAle^ªOlrkaª^obªs^drb+ Qebobª^obªpbsbo^iªolrqbpªqlªeb^aªlccªmolqb`qflkfpj7ª_vª`ljmibqfkdªqebªAle^ªOlrka plªqe^qªqebªTQLª`^kªjlsbªlkªqlªab^iªtfqeªlqeboªbjbodfkdªfpprbp)ª_vª^aaobppfkdªdil_* ^iªfj_^i^k`bpªqeolrdeªfkqbo*dlsbokjbkqª`llmbo^qflkªfkªqebªD/-)ª^kaª_vªaljbpqf` mlif`fbpªqe^qªebimªmblmibª^agrpqªqlªb`lkljf`ª`e^kdb+ª

Find the political will to complete the Doha Round QebªAle^ªOlrkaªe^pªs^oflrpivª_bbkªabp`of_baª^pªab^a)ªab^ail`hba)ªjlof_rkaª^ka c^fiba)ª_rqªqebobª^obªfjmloq^kqªob^plkpªqlªobproob`qª^kaª`ljmibqbªfq+ªQebªTQL)ªte^q * bsboªfqpªc^fifkdp)ªfpªqebª`bkqo^iªpvj_liªlcªdlsbokjbkqpÖª`ljjfqjbkqªqlª^kªlmbkªjri * qfi^qbo^iªqo^afkdªpvpqbj+ªTebkªqebªq^ihpª_olhbªaltkªfkªGrivª/--5ªsf`qlo vªt^pªtfqefk ob^`e8ªqebª^qjlpmebobª^jlkdªkbdlqf^qlopªt^pªlkbªlcªobdobqªo^qeboªqe^kªob`ofjfk^ * qflk+ªQebobªt^pªsbovªifqqibªibcqªqlª^dobb+ªTe^qªt^pªjfppfkdªt^pªmlifqf`^iªtfiiªfkªj^glo `lrkqofbp+ªLkivª^ªcbtªjlkqepªi^qbo )ªtbªc^`bªbuqo^loafk^o vªqfjbpªtebkªbuqo^loafk^o v ib^abopefmª^kaªmlifqf`^iªtfiimltboª^obªobnrfoba+ª]Te^qbsboªfqªq^hbp$ªp^vªqelpbª^qªqeb `bkqobªlcªqebªcfk^k`f^iª`ofpfp+ªPfjfi^oªobplisbªpelriaª^mmivªqlªqebªdil_^iªqo^afkdªpvpqbj ^qª^ªqfjbªtebkªcobbªqo^abªfpª_bfkdªjfubaªrmªtfqeª`ofqfnrbpªlcªcobbªj^ohbqp+ª>k^ivpbp lcªqebªc^ojªqo^abªpq^kalccªfkªGrivªpeltªqe^qª^ª`ljmoljfpbªfpªmlppf_ib+ªPlª^obªfjmolsba lccbopªfkªpbosf`bpª^kaª^dobbjbkqªlkªoribp+ªFkªmobsflrpªolrkapªdlsbokjbkqpªe^sbª_bbk mrpebaª_vªqebfoª_rpfkbppª`ljjrkfqfbpªqlª`ljmibqbª^kª^dobbjbkqª_rqªqefpªolrka)ªrm qlªklt)ªe^pª_bbkªqllªk^ooltªfkªp`lmbªqlª^qqo^`qªpr`eªprmmloq+ª Mofs^qbªpb`qloªmobpprobªfpªkltªkbbabaªkltªqlªcfkfpeªqefpªolrkaª^kaªobpqlobªTQL

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28 What world leaders must do to halt the spread of protectionism

About the author

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29

The crisis and protectionism: History doesn't repeat itself, but sometimes it rhymes

Richard Baldwin Graduate Institute, Geneva and CEPR

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31 VOX Research-based policy analysis and commentary from leading economists

Tariffs on high-, middle- and low-income nations: status quo vs. bound rates

Protection faced by exporters from: High-income Middle-income Low-income Status Quo 4.6% 4.6% 4.0% Tariffs raised to bound rates 9.0% 8.9% 11.7%

Source: ‘The cost of a non-Doha’, Bouet and Laborde, IFPRI Briefing Note, November 2008. http://www.ifpri.org

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About the author

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33

What should world leaders do to halt protectionism from spreading?

Patrick A. Messerlin Institut d'Etudes Politiques de Paris

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What would happen if unbound tariffs rose? Qtlªob`bkqªpqrafbpªpebaªpljbªifdeqªlkªqebªjlrkqfkdªa^kdbop+ªCfopq)ªqebªqlm*0-ªmola * r`qpªtfqeªefdeªofphpªlcªpe^omªq^ofccªfk`ob^pbpª^obª`lk`bkqo^qbaªfkªqebª^rqljl_fibª^ka bib`qolkf`pªpb`qlop+ªQebpbª^obªqtlªhbvªfkarpqofbpªåªlkbªlcªtef`eªfpª^iob^avªfkªqolr_ib+ Efdeboªq^ofccpªlkªpr`eªmolar`qpªtlriaªfk`ob^pbªqebª`lpqpªlcª`roobkqªtloiaªfjmloqpª_v olrdeivª!0-*!2-ª_fiiflk+ªPb`lka)ªqebªcfopqª^s^fi^_ibªbpqfj^qbpªlcªqebªtbic^obª`lpqpªdbk* bo^qbaª_vªpr`eªq^ofccªfk`ob^pbpªo^kdbªcoljª!.02ªqlª!02-ª_fiiflk)ªj^hfkdªqebªdil_^i mof`bªq^dªlcªc^fifkdªqlªhbbmªqebªAle^ªOlrkaªlkªqo^`hªfkªqebªo^kdbªlcª!/-2ªqlª!1/-ª_fi* iflkp+ Lk`bªtloiaªib^abopªob^ifpbªqe^qªqebªj^dkfqrabªlcªqebªfjmbkafkdªqo^abª`ofpfpªtlria ofs^iªqe^qªlcªqebªcfk^k`f^iª`ofpfp)ªqebªtloiaªib^abopªpelriaª^mmivªqebªcobpeªibpplkpªib^okq coljªqebªcfk^k`f^iª`ofpfp+ªMob*bjmqfsbª^`qflkpª^obªjlobªbccf`fbkqªqe^kªob^`qflkp)ª^ka qebªtfaboª^kaªc^pqboªqebª_bqqbo +ªFkªqebªqo^abª`lkqbuq)ª]tfabo$ªjb^kpªqe^qªqebªAle^ kbdlqf^qflkpªe^sbª^kª^_plirqbªmoflofqvªlsboªmobcbobkqf^iªqo^abªkbdlqf^qflkp)ª^ka ]c^pqbo$ªqe^qªqebªAle^ªkbdlqf^qlopªpelriaªabifsboªhbvªq^kdf_ibªobpriqpª_bclobªqebªbkaªlc qebªvb^o+ Qlªob^`eªpr`eª^ªdl^i)ªtloiaªib^abopªpelriaªfkpqor`qªqebfoªqo^abªjfkfpqbopªqlª_bªjlob ob^ifpqf`)ªqo^kpm^obkq)ª`lkpfpqbkq)ª_lia)ª^kaªobpmlkpf_ibªarofkdªqebª`ljfkdªtbbhpªlc

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36 What world leaders must do to halt the spread of protectionism

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Leadership to avoid failure >iiªqefpªtfiiª_bªmlppf_ibªlkivªfcªqebªtloiaªib^abopªj^hbª`ib^oªqe^qªqebvªtfiiªmrqª^pfab qebªsbpqbaªfkqbobpqpªlmmlpbaªqlª^ªAle^ª^dobbjbkqªtfqeªqebªp^jbªbkbodvªqe^qªqebvªafa tebkª^aaobppfkdªqebfoª_^khpÖªafccf`riqfbp+ª>kaªtloiaªib^abopªe^sbª^ªpqolkdªfk`bkqfsb qlªalªpl+ª Qebªb`lkljf`ªbccb`qpªlcª^ªqo^abª`ofpfpªtlriaªifhbivªpt^jmª^iiªqebfoªm^pqª^kaªmobpbkq bccloqpªqlªplisbªqebªcfk^k`f^iª`ofpfp+ª>ªc^firobªfkªqebªAle^ªOlrkaªj^vªtbiiª_bªqebªc^fi * robªlcªqebfoªtelibªpbqªlcªb`lkljf`ªmlif`fbp+

About the author

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37

No turning back: Lock-in 20 years of reforms at the WTO

Simon J. Evenett University of St. Gallen and CEPR

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39 VOX Research-based policy analysis and commentary from leading economists

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No time for complacency Tfqeª^iiªqefpªfkªjfka)ªprobivªmlif`vj^hbopª`^kªpbbªeltªco^dfibª^obª`roobkqªdil_^iª`lj* jbo`f^iªlmmloqrkfqfbpªqe^qªj^kvªe^sbª_bbkªq^hfkdªcloªdo^kqba+ªFcªqfjbpªdbqªsbo vªrdiv qebkªtbÖiiªpllkªpbbªqebªifjfqbaª_fqbªqe^qªTQLªafp`fmifkbpªe^sb+ªª Qebªobpmlkpbªfpªklqªqlªqrokªlroª_^`hpªlkªqebªTQLª_rqªqlªj^hbªrpbªlcªqefpªj^`efk* bovªqlªil`h*fkª`roobkqª`ljjbo`f^iªmlif`fbp)ª^kaªqebob_vªj^ufjfpbªqo^abÖpª`lkqof_rqflk qlªb`lkljf`ªob`lsbov+

Doha isn't the only WTO option, but it would be a great place to start @ljmibqfkdªqebªAle^ªOlrkaªtlriaª_bª^ªmltbocriªabjlkpqo^qflkªlcªqebªtloiaÖpª`lj* jfqjbkqªqlªlmbkªj^ohbqpª^qª^ªqfjbªlcªb`lkljf`ªafpqobpp+ªMboe^mpªqebªob^ifp^qflkªlc qebªmlqbkqf^iªcloª^ªmolqb`qflkfpqª_^`hi^pe)ª^kaªqebªcbtªibd^iªifjfqpªlkªpr`eª^ª_^`hi^pe mobpbkqbaª_vª`roobkqªTQLªoribp)ªtfiiª`lksfk`bªmofjbªjfkfpqbopª^kaªmobpfabkqpªql lsbo`ljbªqebªeroaibpªqe^qªpqlmmbaª^ªab^iª_bfkdª`lk`irabaªlsboªqebªprjjbo +ª Qo^abªkbdlqf^qlopªpelriaªpbbªqebªmobsflrpªao^cqªjla^ifqfbpª^pªil`hfkd*fkªjr`eªmoflo qo^abªobcloj)ª_bª`lkqbkqªtfqeªqe^q)ª^kaªklqª^kq^dlkfpbªqo^afkdªm^oqkbopª^kaªgblm^o * afpbªqebª`lk`irpflkª_vªpnrbbwfkdªlrqªqebªi^pqªaolmªlcªbuqo^*j^ohbqª^``bpp+ J^kvªTbpqbokªj^krc^`qrobopªtlkÖqªifhbªqefp)ª^pªfqªjb^kpªclodlfkdª`boq^fkªpb`qlo^i ab^ipªqe^qªqebvªabpfob+ªProbivªqebpbªabj^kapªjfppªqebªclobpqªcloªqebªqobbp8ªifjfqfkdªqeb mlqbkqf^iªlcªqrokfkdªqebª`il`hª_^`hª/-ªvb^opªfkªbjbodfkdªj^ohbqpªpelriaªkltªq^hbªmof* lofqv+ªIfhbtfpb)ªabsbilmfkdª`lrkqofbpªpelriaªklqªpbbhª^ª`lrmibª_fiiflkªjlobªebobªlo qebobªfkª`rqpªfkª^dof`riqro^iªpr_pfafbpªcoljªT bpqbokª`lrkqofbp+ªO^qebo)ªq^hbªte^qÖpªlk qebªq^_ibª_bclobªTbpqbokªc^ojbopªdbqª^pªlod^kfpbaª^pªqebfoª`lrkqbom^oqpªfkªqebª`^oªj^k* rc^`qrofkdª^kaª_^khfkdªpb`qlop+ª

Other options for world trade ministers Bsbkªfcª^ªAle^ªOlrkaªco^jbtlohªab^iªfpkÖqªmlppf_ib)ªqeobbªlqeboªlmqflkpª`lriaª_bªmro* prbaªåªfkafsfar^iivªloªqldbqeboªåª^qªqebªifhbivªAb`bj_boªTQLªJfkfpqbof^iªJbbqfkdªlo ^cqbot^oap+

40 What world leaders must do to halt the spread of protectionism

ë >pª^ªabjlkpqo^qflkªlcªtloiaªqo^afkdªmltbopÖª`ljjfqjbkqªqlªqo^abª^pª^ªsbef`ib lcªb`lkljf`ªob`lsbov)ªqebªTQLÖpª`roobkqªqo^abªc^`fifq^qflkªkbdlqf^qflkpª`lriaª_b to^mmbaªrmª^kaªfjmibjbkqbaªlkª^ªmolsfpflk^iª_^pfp+ª Qebpbªkbdlqf^qflkp)ªqe^qª`lk`bokªmofk`fm^iivª`rqqfkdªobaªq^mbª^kaªabi^vpª^qª_loabo `olppfkdp)ªe^sbª_bbkªsbo vª`lkpqor`qfsb+ªCfk^ifpfkdªqebjªtlriaªobnrfobª^kªbuqo^ªmrpe _rqªpelriaª_bªal*^_ib+ªFjmibjbkq^qflkªlcªqefpª^dobbjbkqª`lriaªpq^oqªlkª.ªG^kr^o v /--6ªtfqeªfkarpqof^ifpbaª`lrkqofbpª`ljjfqqfkdªqlª`ob^qbª^ªcrkaªcloªqebªmllobpqªabsbi * lmfkdª`lrkqofbpªqlªfjmibjbkqªoba*q^mbª`rqqfkdªjb^probp+ª ë Jlobª^j_fqflrpªtlriaª_bª^ªqbjmlo^o vª_fkafkdª`ljjfqjbkqª_vªqebªD/-ª^ka >MB@ªk^qflkpªklqªqlªo^fpbªqebfoª^mmifbaªjlpq*c^slroba*k^qflkªq^ofccp)ª^dof`riqro^i pr_pfafbp)ª^kaªbumloqªq^ubpª^kaªobpqof`qflkpª^_lsbªqebªibsbipªqe^qªmobs^fiba arofkdªKlsbj_boª/--5)ªtebkªqebfoªib^abopªpmlhbªlrqªplª_liaivªlkªqefpªj^qqbo +ª Qefpª_fkafkdª`ljjfqjbkqªtlriaªi^pqªplªilkdª^pªqebªtloiaªb`lkljvÖpªdoltqeªo^qb cbiiª_biltª^ª`boq^fkªibsbiª%p^vª1"*2"&ª^kaª`lriaª_bªobsfbtbaªbsbo vª/ªvb^opª%^qªpr_pb * nrbkqªTQLªjfkfpqbof^iªjbbqfkdp+&ªPfk`bªqebªD/-ª^kaª>MB@ªk^qflkpªfk`irabª^ijlpqª^ii qebªj^gloªqo^afkdªk^qflkp)ªqefpª`ljjfqjbkqªtlriaªmolsfabª^ªq^kdf_ibªibd^iiv*_fka * fkdªt^vªlcªfjmibjbkqfkdª`^iipªcloª^ªpq^kapqfiiªlkªq^ofccªefhbp+ªT fqelrqªqefpªpqbm)ªqeb cfkbªtloapªeb^oaªfkªT^pefkdqlkª^kaªIfj^ªj^vªbkaªrmªofkdfkdªeliilt + ë >qª^kvªAb`bj_boªTQLªjbbqfkdªpbkfloªlccf`f^ipª`lriaª^dobbªqlªifjfqªåªcloªqebªqeb aro^qflkªlcªqebªdil_^iªob`bppflkªåª^kqfarjmfkdªfksbpqfd^qflkpªqlª^``rp^qflkp qe^qªp^ibpª^_ol^aª^obªq^hfkdªmi^`bª^qªmof`bpªiltboªqe^kªfkªeljbªj^ohbqp+ªQefp tlriaªprpmbkaªfksbpqfd^qflkpªfkqlªilpp*j^hfkdªbumloqp+ Pljbªlcªqebªtlopqª_rob^r`o^qf`ªd^jbpªdbqªmi^vbaªfkª^kqf*arjmfkdªfksbpqfd^qflkp fkqlªilpp*j^hfkdªbumloqªp^ibp)ªtef`eª^obªlcqbkªqob^qbaª^pª]klqªfkªqebªloafk^o vª`lropb lcªqo^ab+$ªQebpbª^_rpbpªobpriqªfkªfjmi^rpf_ivªefdeªarqfbpª^kaªlcqbkªafpqloqªlqebo ^pmb`qpªlcªqebªarjmfkdªfksbpqfd^qflk+ªJ^kvªk^qflkp$ª^kqfarjmfkdªi^tpªqob^qªilpp* j^hfkdªbumloqªp^ibpª^pªarjmfkd)ª^odrfkdªqe^qªj^hfkdªilppbpªfpªklqªkloj^iª`lomlo^qb _be^sflro+ªQebª_bpqªqe^qª`lriaª_bªp^faªcloªqefpª^odrjbkqªfpªqe^qªfqª^mmifbp)ª^qªjlpq) arofkdª_lljpªtebkªcfojpª`^kªj^hbª_rjmboªmolcfqp+ªEltbsbo)ªarofkdªabbmªob`bppflkp j^kvªcfojpªj^hbªilppbpªlkªp^ibpªqlªaljbpqf`ª^kaªclobfdkªj^ohbqpªtfqelrqªqebfoª_bfkd ^kvªbsfiªfkqbkqªqlªjlklmlifpbªj^ohbqp+ª

Conclusion Qebª_liaªab`i^o^qflkpª^qªqebªD/-ª^kaª>MB@ªprjjfqpªkbbaªqlª_bªcliiltbaªrmªtfqeªpfj* fi^oivª_liaª^`qflkp+ªKlqªlkivªpelriaªTQLªjbj_bopªobpfpqªqebªqbjmq^qflkªlcªmolqb` * qflkfpjªarofkdªqebª`roobkqªdil_^iªb`lkljf`ªpiltaltk)ª_rqªpqbmpªpelriaª_bªq^hbkªql il`h*fkªqebªj^kvª`ljjbo`f^iªmlif`vªobclojpªfjmibjbkqbaªpfk`bªqebªRordr^vªOlrka+ Cfk^ifpfkdªqebªAle^ªOlrkaªtlriaª_bª^ªdob^qªmi^`bªqlªpq^oq)ª_rqªfqÖpªklqªqebªlkivªlmqflk qe^qªjfkfpqbopªpelriaª`lkpfaboªbfqeboªfkªqebªork*rmªqlªAb`bj_boÖpªmlppf_ibªTQL jbbqfkdªloª^cqbot^oap+

About the author

Pfjlk G+ Bsbkbqq fp Molcbpplo lc Fkqbok^qflk^i Qo^ab ^ka B`lkljf` Absbilmjbkq ^q qeb Rkfsbopfqv lc Pq+ D^iibk) Ptfqwboi^ka) ^ka @l*Afob`qlo lc qeb @BMO Moldo^jjb fk Fkqbok^qflk^i Qo^ab ^ka Obdflk^i B`lkljf`p+ Eb q^rdeq mobsflrpiv ^q Lucloa ^ka Orqdbop Rkfsbopfqfbp) ^ka fp `roobkqiv Sfpfqfkd Molcbpplo lc @lomlo^qb Pqo^qbdv ^q qeb Olpp P`elli lc

41 VOX Research-based policy analysis and commentary from leading economists

?rpfkbpp) Rkfsbopfqv lc Jf`efd^k+ Eb e^p pbosba qtf`b ^p ^ Tloia ?^kh lccf`f^i ^ka t^p ^ klk*obpfabkq Pbkflo Cbiilt lc qeb ?ollhfkdp Fkpqfqrqflk fk T^pefkdqlk+ Eb t^p Jbj_bo lc qeb Efde Ibsbi Dolrm lk Dil_^ifp^qflk bpq^_ifpeba _v qeb Cobk`e Qo^ab Jfkfpqbo @eofpqfkb I^d^oab) Jbj_bo lc qeb T^otf`h @ljjfppflk lk qeb Crqrob lc qeb Jriqfi^qbo^i Qo^afkd Pvpqbj >cqbo Ale^) ^ka Jbj_bo lc qeb Wbafiil @ljjfqqbb lk qeb Dil_^i Qo^ab ^ka Cfk^k`f^i >o`efqb`qrob+ Eb fp ^ @BMO Obpb^o`e Cbiilt+

42 What should ASEAN+3 do to help avert a collapse of the global economy?

Yung Chul Park Seoul National University

Qeb Ale^ q^ihp ^ob qeb D/-Öp cfopq `lk`obqb qbpq8 fqp `obaf_fifqv ^p qeb tloiaÖp kbt dlsbokfkd _lav tlria _b rkabojfkba fc moldobpp fp klq j^ab qefp vb^o+ Fk ^aafqflk ql mrpefkd clo ^ Ale^ ab^i) >PB>K(0 `^k ebim _v _llpqfkd qebfo fjmloqp sf^ aljbpqf` abj^ka pqfjrirp ^ka _v rqfifpfkd ^ii `e^kkbip lc jrqr^i ^ppfpq^k`b ql jbj_bop tfqe peloq*ork _^i^k`b*lc*m^v* jbkqp afccf`riqfbp+

?bclobªqebªD/-ªib^abopÖªjbbqfkdªfkªT^pefkdqlkªlkªKlsbj_boª.2qe)ªcbtª_bifbsbaªqeb Ale^ªOlrkaªe^aªjr`eªlcª^ª`e^k`bª^cqboªe^sfkdªao^ddbaªlkªcloªjlobªqe^kª4ªvb^op+ Qefpªmbppfjfpqf`ªlrqillhªe^pª`e^kdba+ªQebobªfpªkbtªelmb+ª

The spectre of a protectionist vicious cycle Qebªdil_^iª`ofpfpªåªtef`eª`lriaªmob`fmfq^qbªqebªabbmbpqªob`bppflkªpfk`bª.6/6ªåªe^p ^t^hbkbaªqebªdil_^iª`ljjrkfqvªqlªqebªpmb`qobªlcª^ªsf`flrpª`fo `ibªfkªtef`eªqebªob`bp* pflkªmrqpªmobpprobªlkª_lqeªabsbilmbaª^kaªabsbilmfkdª`lrkqofbpªqlªobkbtªqo^abªmol * qb`qflkfpj)ªtef`eªfkªqrokªbu^`bo_^qbpªcroqeboªdil_^iªb`lkljf`ªaltkc^ii+ªFkªob^ifwfkd qefpªofph)ªD*/-ªib^abopªe^sbªofpbkªqlªqebª`e^iibkdbªlcªobpfpqfkdªqebªqeob^qªlcª^ªobqrokªql molqb`qflkfpqªmlif`fbp+ª Tfqeªqefpªfkªjfka)ªD/-ªib^abopªj^abªqtlªmibadbpªlkªqo^ab+ªQebvª^dobbaªlkª^ªpq^ka* pqfiiªlkªqo^abªobpqof`qflkpªtfqefkªqebªkbuqª./ªjlkqep)ª^kaªqebvªfkpqor`qbaªqebfoªqo^ab jfkfpqbopª]qlªob^`eª^dobbjbkqªqefpªvb^oªlkªjla^ifqfbpªqe^qªib^apªqlª^ªpr``bppcriª`lj * mibqflkªlcªqebªAle^ª>dbka^+$ª>ªtbbhªi^qbo)ªqebªD/-ªab`i^o^qflkªt^pªcliiltbaª_vª^ªpfj* fi^oª>MB@ªib^abopÖªpq^qbjbkqª^qªqebfoªjbbqfkdªfkªIfj^+ª Abpmfqbªqebªrodbk`vª^kaªqebªpqolkdivªtloabaªpq^qbjbkqp)ªqebobªfpªpqfiiªifkdbofkd alr_qª^pªqlªtebqeboªqebªobj^fkfkdªfpprbpªlkª^dof`riqro^iªqo^abª`lriaª_bªobplisbaªtfqe* fkª^ªjlkqe+ªOb`bkqªabsbilmjbkqpªeliaªlrqªelmbªcloª^kªb^oivª`lk`irpflk+ªQebªkbdl * qf^qflkpªlkªqebªAle^ªjla^ifqfbpªlkª^dof`riqrobª^kaªfkarpqof^iªdllapª^obª`ilpbªqlª`lj* mibqflkª^pª^ªobpriqªlcªqebªD/-ªprjjfqª^kaªpfdk^ipª`ljfkdªcoljªqebªRKÖpªob`bkqªabsbi* lmjbkqª`lkcbobk`bªfkªAle^+ªJlobªfjmloq^kqiv)ª@efk^)ªFkaf^ª^kaªqebªRP)ªtef`eªe^sb _bbkªjfobaªfkªafpmrqbªlsboª^dof`riqro^iªqo^abªfpprbp)ªe^sbª^iiªpfdkbaªlkªcloª^kªb^oiv `lk`irpflkªlcªqebªAle^ªOlrka+

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43 VOX Research-based policy analysis and commentary from leading economists qebªD/-ªib^abop+ªFcªlk`bª^d^fkªqebªmi^kkbaªTQLªjfkfpqbof^iªjbbqfkdªc^fipªqlªob^`eª^k ^dobbjbkq)ªqebªD/-ªtfiiªilpbªfqpªibdfqfj^`vª^pª^kªfkqbok^qflk^iª_lavªqlª`lloafk^qb b`lkljf`ªmlif`fbpª^jlkdªfqpªjbj_bop+ª QebªAle^ª^``loaªj^vª^iplªebimªpqbjªqebªofpfkdªqfabªlcªqo^abªmolqb`qflkfpjªfkªqeb RP+ª

Stemming the rising tide of protection Qebobªfpª^ªtfabpmob^aªmbo`bmqflkªqe^qªqebªkbtªL_^j^ª^ajfkfpqo^qflkªtfqeªfqpªbjme^* pfpªlkªc^foªqo^abªj^vªklqª_bª^pªafpmlpbaª^pªqebª?rpeª^ajfkfpqo^qflkªe^pª_bbkªqlt^oap jriqfi^qbo^iªqo^abªif_bo^ifw^qflk+ªPbkpfkdªqebªmolqb`qflkfpqªjllaªlcªqebªkbtªRP @lkdobpp)ªL_^j^ªj^vªab`fabªklqªqlªmrpeªcloªo^qfcf`^qflkªlcªqebªCQ >pªpfdkbaª_vªqeb ?rpeª^ajfkfpqo^qflk+ªFcªqebªmi^kkbaªTQLªjfkfpqbof^iªjbbqfkdª`lriaªob^`eª^kª^dobb * jbkqªlkªjla^ifqfbp)ªqebªAle^ªOlrkaªj^vªebimªqebªkbtª^ajfkfpqo^qflkª`^oovªlkªtfqe qebªcobbªqo^abªpq^k`bªlcªqebª?rpeª^ajfkfpqo^qflk+

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44 What world leaders must do to halt the spread of protectionism lrqªqebªcb^oªlcªorkkfkdªfkqlª^ªifnrfafqvª`ofpfp+ª Qebªbfdeqª@ef^kdªJ^fªFkfqf^qfsbªm^oqf`fm^kqpª^obªpfqqfkdªlkª^ªqlq^iªlcª!1ªqofiiflkªfk clobfdkªbu`e^kdbªobpbosbp+ª>ªi^`hªlcªRPªalii^oªifnrfafqvªfpªqerpªlkbªqefkdªqebvª`^kªb^p* fivªlsbo`ljb)ªfcªqebvªbki^odbªqebªpfwbª^kaªpqob^jifkbªqebª^`qfs^qflkªmol`barobªlcªqeb @ef^kdªJ^fª_fi^qbo^iªpt^mª^oo^kdbjbkqp+ª

About the author

Vrkd @eri M^oh fp Obpb^o`e Molcbpplo ^q Pblri K^qflk^i Rkfsbopfqv tebob eb fp ^ipl Afob`qlo lc qeb @bkqbo lc Fkqbok^qflk^i @ljjbo`b ^ka Cfk^k`b %Do^ar^qb P`elli lc Fkqbok^qflk^i Pqrafbp&+ Eb mobsflrpiv q^rdeq ^q E^os^oa) ?lpqlk Rkfsbopfqv ^ka JFQ) ^cqbo cfkfpefkd efp MeA ^q Jfkkbplq^+ Eb e^p _bbk ^ jbj_bo lc qeb K^qflk^i B`lkljf` >asfplov @lrk`fi) Lccf`b lc qeb Mobpfabkq %Hlob^&8 >j_^pp^alo clo Fkqbok^qflk^i B`lkljv ^ka Qo^ab %Hlob^k Jfkfpqov lc Clobfdk >cc^fop ^ka Qo^ab&8 @e^foj^k lc qeb ?l^oa lc Afob`qlop %Hlob^ Bu`e^kdb ?^kh&8 Jbj_bo lc qeb Mobpfabkqf^i @ljjfppflk lk Cfk^k`f^i Obcloj8 Mobpfabkq lc qeb Hlob^ Absbilmjbkq Fkpqfqrqb8 Jbj_bo lc qeb Jlkbq^ov ?l^oa %?^kh lc Hlob^&8 Pbkflo Pb`obq^ov ql qeb Mobpfabkq clo B`lkljf` >cc^fop %Lccf`b lc qeb Mobpfabkq) Hlob^&8 Mobpfabkq lc qeb Hlob^ Fkpqfqrqb lc Cfk^k`b8 ^ka B`lkljfpqp ^q qeb FJC %.635*.64/&+ Eb e^p mr_ifpeba tfabiv fk p`eli^oiv glrok^ip ^ka fp qeb ^rqelo lc pbsbo^i _llhp) jlpq ob`bkqiv B`lkljf` If_bo^ifw^qflk ^ka Fkqbdo^qflk fk B^pq >pf^7 > Mlpq*@ofpfp M^o^afdj %/--3&+

45

Trade and the global crisis: What it means for Africa and the response of African leaders

Peter Draper South African Institute of International Affairs

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Qebobªfpª^ªp^vfkdªfkª>cof`^7ª]tebkªbibme^kqpªcfdeq)ªqebªdo^ppªdbqpªqo^jmiba$+ªQefpª^``r * o^qbivªabmf`qpªqebªc^iilrqªcoljªqla^vÖpªdil_^iª`ofpfp+ª>cof`^kpªe^aªifqqibªqlªalªtfqeªqeb j^hfkdpªlcªqebª`ofpfp)ª_rqªtbªtfiiªprccboªcoljªfq+ª Qefpªprccbofkdªtfiiªj^kfcbpqªfkªqtlªt^vp7ªqebªafob`qªb`lkljf`ªfjm^`qp)ª^kaªdolt * fkdªobdri^qlovªmolqb`qflkfpj+ªQebªafob`qªbccb`qpªtfiiª`ljbªsf^ªqeobbª`e^kkbip+ ë Afob`qªcfk^k`f^iª`lkq^dflk+ª @^mfq^iªcifdeqªcoljªbjbodfkdªj^ohbqpªtfiiª`ob^qbªqebªrpr^iªj^`olb`lkljf`ªafpil * `^qflkp7ªtb^hboªbu`e^kdbªo^qbp)ªefdeboªaljbpqf`ªfkqbobpqªo^qbp)ª^kaªefdeboªab_qªpbo s* f`fkdª_roabkp+ªLccf`f^iªabsbilmjbkqª^ppfpq^k`bªfpªrkifhbivªqlªlccpbqªqefpªcfk^k`f^i pnrbbwb8ªqebªalkloªk^qflkpª^obªp`o^mfkdªmbkkfbpªqldbqeboªqlªob`^mfq^ifpbªqebfoª_^khfkd pvpqbjpª^kaªm^vªcloªcfp`^iªpel`hªqebo^mvªqlªobsfsbªqebfoªltkªb`lkljfbp+ª ë Obar`baªobjfqq^k`bpªcoljª>cof`^kpª^_ol^a+ª Cfk^k`f^iªfkciltpªcoljª>cof`^kªaf^pmlo^pªfkªqebªabsbilmbaªtloiaªe^sbª_bbkªfjmlo* q^kqªfkªob`bkqªab`^abp)ª`rpeflkfkdªqebªfii*bccb`qpªlcªj^`olb`lkljf`ªjfpj^k^dbjbkq ^kaªrkabomfkkbaªmlpfqfsbªpqor`qro^iªqo^kpcloj^qflkªpqlofbp+ªObar`baªobjfqq^k`bpªtfii bu^`bo_^qbªclobfdkªbu`e^kdbªpeloq^dbp)ªa^jmbkªaljbpqf`ªdoltqeªmolpmb`qpªqeolrde obar`baª`lkprjmqflk)ª^kaªebfdeqbkªmobpprobpªlkªdlsbokjbkqªobsbkrb+ ë Obar`baªmof`bpª^kaªslirjbpªlcªj^gloª`ljjlafqvªbumloqp+ª Ob`bppflkpªfkªqebªabsbilmbaªtloia)ªkltªpmob^afkdªqlª@efk^ª^kaªFkaf^)ªe^sb ^iob^avªpi^pebaª`ljjlafqvªmof`bp+ªQefpªtfiiªobar`bªb`lkljf`ªdoltqeª^`olppªqeb >cof`^kª`lkqfkbkqªbsbkªqelrdeqªpljbª`lrkqofbpªtfiiª_bkbcfqªcoljªqebªiltboª`lj * jlafqvªmof`bp+

Protection would make things worse Qefkdpª^obªifhbivªqlªdbqª`lkpfabo^_ivªtlopbªcloªqebªtloiaÖpªjlpqªsrikbo^_ibª`lkqfkbkq fcª`boq^fkªabsbilmba*tloiaªil__fbpªdbqªqebfoªt^v +ªQebªqeob^qªtfiiª`ljbªfkªqebªclojªlc efdeboª^kqfarjmfkdª^kaª`lrkqbo s^fifkdªarqfbpª^kaªobdri^qlo vªmolqb`qflkfpj)ªbpmb * `f^iivªfkªBrolmb+ª @roobkqivªobdri^qlovªmolqb`qflkfpjªq^hbpªqebªclojªlcªpq^ka^oapªmolqb`qflk)ª`lsbo * fkdªfkarpqof^i)ª`lkprjbo)ªeb^iqe)ª^kaªfk`ob^pfkdivªbksfolkjbkq^iªobdri^qflkp+ª>iiªlc qebpbª^obªifhbivªqlªfkqbkpfcvªfkªobpmlkpbªqlªob`bppflk^o vª`lkafqflkp)ªtefipqª`ljmbkp^* qlovªcfk^k`fkdªciltpªqlª^ppfpqª>cof`^kªbumloqbopªfkªlsbo `ljfkdªobdri^qlovªeroaibpª^ob

47 VOX Research-based policy analysis and commentary from leading economists ifhbivªqlªab`ob^pb+ªJb^ktefibª^qqbjmqpªqlªpefbiaª]k^qflk^iª`e^jmflkp$ªcoljªob`bp * pflk^ovªfjm^`qpª^kaª]rkc^foª`ljmbqfqflk$)ªrpfkdªp^cbdr^oap)ª^kqfarjmfkdªarqfbpª^ka qebªifhbªtfiiªdolt+

Use macroeconomic tools to fight a macroeconomic problem Dil_^iªib^abopªkbbaªqlªobfkclo`bªbccloqpªqlªpelobªrmªaljbpqf`ªabj^ka+ªQefpªtlriaªmrq ^ªcilloªrkaboªqebfoªltkªdoltqeªmolpmb`qp)ª_rqª^iplªqelpbªlcªmlloªabsbilmfkdª`lrkqofbp fkª>cof`^ª^kaªbipbtebob+ª@efk^ªe^pª^iob^avªpeltkªqebªt^v +ªQebªabsbilmbaªtloia pelriaªcliiltªfkªb^okbpqªtfqeªcfp`^iªpqfjrirpª`lj_fkfkdªq^uªobifbcªtfqeªfkco^pqor`qrob pmbkafkd+ªQebvªpelriaª^slfaªpmb`f^iªab^ipªcloªafpqobppbaªpb`qlopªfkªloaboªqlªjfkfjfpb molqb`qflkfpqªfjmripbp+ª Tloiaªib^abopªpelriaª^iplª`ljjfqªqlªpbbfkdªqebªAle^ªOlrkaªqeolrde)ªtefipqªlccbo* fkdªj^ufjrjªcibuf_fifqvªfkªqebfoª]obaªifkb$ª^ob^p+ªQebªqorqeªlcªqebªj^qqboªfpªqe^qªqeb Ale^ªOlrkaªab^iªfpªqebobªcloªqebªq^hfkdªåªmolsfabaªbkqobk`ebaªaljbpqf`ªil__fbpªm^o * qf`ri^oivªfkªqebªabsbilmbaªtloiaª`^kª_bªpq^oba*altk+ªQefpªfpªqebªjljbkqªtebkªab`f * pfsbªfkqbosbkqflkpªcoljªqebªefdebpqªibsbipªlcªdlsbokjbkqª`^kªj^hbª^ªab`fpfsbªafccbo * bk`b+

What Africans can do for themselves >ªAle^ªOlrkaªjfkfpqbof^iªe^pª_bbkªjllqbaªcloªAb`bj_bo +ªEltªtfiiª]qeb$ª>cof`^k ^mmol^`eªpq^`hªrmª^d^fkpqªqebªd^qebofkdªmolqb`qflkfpqªtfkap<ªRmªqlªqefpªmlfkqªqeb >cof`^ªdolrmÖpªmlpfqflkpªlkªqebª`lobªj^ohbqª^``bppªm^`h^dbªe^sbª_bbkªlsbo tebijfkd* ivªabcbkpfsb)ªfk`irafkdªfkqboª^if^7ª ë Obq^fkfkdªmobcbobkqf^iª^``bppªfkqlªabsbilmbaª`lrkqo vªj^ohbqpª_vªjfkfjfpfkd q^ofccªobar`qflkpªqebob8ª ë Obpfpqfkdªtelibp^ibªobclojªlcªBRª^dof`riqro^iªobdfjbpªcloªqebªp^jbªmromlpb8ª ë QbjmbofkdªBRªabj^kapªcloª^kªlsboe^riªlcªRPªcllaª^faªmo^`qf`bpªfkªloaboªql ^slfaªafpormqflkpªfkªmolsfpflkªlcªcllaª^faª%qebª`lkqfkbkqª_bfkdª`eolkf`^iiv abmbkabkqªlkªpr`eªfjmloqp&8 ë >slfafkdªif_bo^ifp^qflkªlcªaljbpqf`ªpbo sf`bpªj^ohbqpªlpqbkpf_ivª_b`^rpbªtbªal klqªe^sbªpbosf`bpªqlªbumloq8ª ë >asl`^qfkdªabsbilmbaª`lrkqovªif_bo^ifp^qflkªlcªqbjmlo^ovªjlsbjbkqªlcªk^qro^i mboplkpªfkªloaboªqlªbk`lro^dbªdoltqeªlcªobjfqq^k`bp8ª^ka ë Pbbhfkdªtelibp^ibª`^osb*lrqpªcoljªfkarpqof^iªq^ofccªobar`qflkpªfkªloaboªqlªmolqb`q pl*`^iibaªmlif`vªpm^`b+

A defensive strategy is not the answer Qefpªabcbkpfsbª^dbka^ªfpªklqªpromofpfkdªdfsbkªqebª`lkqfkbkqÖpªj^gloªb`lkljf`ª^ka dlsbok^k`bª`e^iibkdbp+ªEltbsbo)ªfkªqebª`roobkqª^kaªrkcliafkdªdil_^iªbksfolkjbkqªfq albpªklqªpbosbª>cof`^ªtbii+ Abcbkafkdªabsbilmba*`lrkqo vª^dof`riqro^iªmolqb`qflkª_irkqpªqebªmof`bªpfdk^ip >cof`^kªc^ojbopªkbbaªqlª_rfiaªqebfoªmolar`qfsfqv +ªFqª^iplªil`hpªb`lkljfbpªfkqlª`^pe `olmªmolar`qflkªcloªbumloqª^qªqebªbumbkpbªlcªcllaªpb`rofqv +ªVbqªqebªdil_^iªbksfolk * jbkqªfpªifhbivªqlªbkqobk`eªbufpqfkdªabsbilmbaª`lrkqovªmlif`fbpªmlqbkqf^iivªcloªab`^abp qlª`ljb+

48 What world leaders must do to halt the spread of protectionism

Obq^fkfkdªmlif`vªpm^`bªcloªq^ofccªmolqb`qflkªlkivªj^hbpªpbkpbªcloªqelpbªfjmloqpªqe^q dbkbo^qbªpr_pq^kqf^iªobsbkrbp+ªLsbo^iiª>cof`^ªalbpªklqªe^sbª^ª`ljm^o^qfsbª^as^kq^db fkªfkarpqof^iªmolar`qflk+ªFqª`lriaª_bkbcfqª_vªfjmloqfkdªcoljªjlobªbccf`fbkqª>pf^kªmol* ar`bop+ªQebªdil_^iª`ljmbqfqfsbªbksfolkjbkqªtfiiª_b`ljbªjr`eªjlobª`lkqbpqbaªfk qebª`ljfkdªvb^opª^pªmolar`qflkªfpªob^iil`^qbaª%^kaªqebªmol`bppªobpfpqba&ªcoljªabsbi * lmbaª`lrkqofbpªqlªo^mfaivªdoltfkdªbjbodfkdª>pf^+ªFkªqebªfkqbofj)ªpromirpª`^m^`fqvªtfii bkprobªmof`bpªobj^fkªabmobppba)ªcroqeboªafp`lro^dfkdª>cof`^kªmolar`qflk+ Qlª_rfiaª`ljmbqfqfsbªb`lkljfbp)ªklqªib^pqªfkªj^krc^`qrofkd)ª>cof`^kªmolar`bop ^kaª`lkprjbopªkbbaª^``bppªqlªilt*`lpq)ªbccf`fbkqªkbqtlohªpbo sf`bp+ªT fqeªsbo vªcbt bu`bmqflkpª>cof`^kªmolar`bopª^obªklqªfkª^ªmlpfqflkªqlªmolsfabªqebpb)ªtebob^pªclobfdk molar`bopªobnrfobª^qqo^`qfsbªobdri^qlovªpbqqfkdpªqlªalªpl+ª>cof`^kª`lrkqofbpªpelriaªqerp pbfwbªqebªpbosf`bpªif_bo^ifw^qflkªkbqqibªåªobq^fkfkdªarbªobd^oaªcloªrkfsbop^iª^``bppªmlif * `fbpªåª^kaªbj_o^`bªqefpªbibjbkqªlcªqebªAle^ªOlrka+ ?bkbcfqpªlcª^ªclot^oa*ib^kfkdªpqo^qbdv >almqfkdªqefpª^mmol^`eªtlriaªj^hbª^ªpr_pq^kqf^iª`lkqof_rqflkªqlªrkil`hfkdªqeb ob`fmol`^iª`lk`bppflkpªobnrfobaªcoljªabsbilmbaª`lrkqofbpªfkªloaboªqlª_baªaltkªqeb Ale^ªOlrka+ª>iqldbqeboª>cof`^kªib^abopªkbbaªqlªlsbo `ljbªqebfoªltkªmolqb`qflkfpq fkpqfk`qpªfkªloaboªqlª`lkqof_rqbªqlªrkil`hfkdªabsbilmbaªtloiaªil__fbpªfkªlroªltk) >cof`^kª^kaªdil_^iªfkqbobpqp+ªQ fjbpªlcª`ofpfpªmobpbkqªfab^iªlmmloqrkfqfbpªcloªobclojbop tfqeªprccf`fbkqªibsbo^dbª^kaªsfpflkªqlªq^hbª^as^kq^dbªlcªqebj+ªMboplk^iivªFªprpmb`q pr`eªmblmibª^obªfkªabpmbo^qbivªpeloqªprmmiv+

About the author

Mbqbo Ao^mbo fp Eb^a lc qeb Qo^ab Molgb`q ^q qeb Plrqe >cof`^k Fkpqfqrqb lc Fkqbok^qflk^i >cc^fop) ^ jbj_bo lc ?rpfkbpp Rkfqv) Plrqe >cof`^Öp qo^ab `ljjfqqbb) ^ Obpb^o`e >ppl`f^qb lc qeb Abm^oqjbkq lc Mlifqf`^i P`fbk`b ^q qeb Rkfsbopfqv lc Mobqlof^) ^ka Pbkflo Obpb^o`e Cbiilt ^q qeb Brolmb^k @bkqob clo Fkqbok^qflk^i Mlifqf`^i B`lkljv+ Mobsflrpiv eb eb^aba Qeb Abm^oqjbkq lc B`lkljf`p ^q qeb Rkfsbopfqv lc Aro_^k*Tbpqsfiib) qeb >pf^ ^ka Jbo`lpro abphp ^q qeb Abm^oqjbkq lc Qo^ab ^ka Fkarpqov) ^ka B`lkljf` >k^ivpfp ^ka Obpb^o`e fk qeb AQFÖp Fkqbok^qflk^i Qo^ab ^ka B`lkljf` Absbilmjbkq Afsfpflk+

49

The crisis is an opportunity to push multilateral trade liberalisation

Ryuhei Wakasugi Kyoto University

Qeb dil_^i `ofpfp j^v klq pbb qeb ob*bk^`qjbkq lc qeb Dob^q AbmobppflkÖp o^`b ql molqb`qflk* fpj+ Qeb `ofpfp) eltbsbo) fp ^ dob^q lmmloqrkfqv clo pqobkdqebkfkd qeb TQL qeolrde croqebo jriqfi^qbo^i if_bo^ifp^qflk+ Dil_^i ib^abop pelria ^ipl `lkpfabo cfdeqfkd ob`bppflk^ov mobpprobp sf^ bumloq fkpro^k`b ^ka lqebo jb^probp ql lccpbq qeb `lii^mpb lc qo^ab `obafq+

Qebªcfk^k`f^iª`ofpfpªfpªpmob^afkdªtloiatfab+ªTe^qª_bd^kª^pªqebªÖpr_mofjbª`ofpfpÖªfkªqeb RPªe^pªfkar`baªob`bppflkpªfkªBrolmb)ªqebªRPª^kaªG^m^kª^kaªdoltqeªpiltaltkpªfk bjbodfkdª`lrkqofbpªpr`eª^pª@efk^)ª?o^wfi)ªFkaf^)ª^kaªOrppf^+ªQebªp`lmbªlcª`e^iibkdbp c^`fkdªqebpbªb`lkljfbpªe^pªtfabkbaªcoljªjlkbq^ovª^kaªcfk^k`f^iªfpprbpªqlªmol_ibjp fkªqebªob^iªb`lkljvªåªklq^_ivªobar`baª`lkprjboªpmbkafkdª^kaªmofs^qbªfksbpqjbkq lrqi^vp+ªG^m^kÖpªmol_ibjpª^iplªbuqbkaªqlªpq^dk^qfkdªbumloqp+ª>iiªqefpªfpªpmfiifkdªlsbo fkqlªqebªi^_lroªj^ohbq+ª >ªtb^hªbjmilvjbkqªj^ohbqªqbkapªqlªfkar`bªmolqb`qflkfpqª^`qflkpª^pªdlsbokjbkq pbbhªqlªpefbiaªqebªaljbpqf`ªj^ohbqªcoljªclobfdkª`ljmbqfqflk+ªQebªjlpqªc^jlrpªbu^j* mibª`^jbªfkª.60-)ªtebkªqebªRPª@lkdobppªm^ppbaªqebªPjllq*E^tibvªQ ^ofccª>`q+ªQefp `roq^fibaªRPªfjmloqp)ªfkcrof^qbaªqo^abªm^oqkbop)ª^kaªbsbkqr^iivª^ddo^s^qbaªqebªDob^q Abmobppflk+ªCroqebojlob)ªqebªobar`qflkªfkªRPªfjmloqpªpbkqªpel`h*t^sbpªqeolrdelrq qebªdil_^iªb`lkljvª^kaªqofddbobaªobq^if^qlo vªq^ofccªfk`ob^pbpª_vª^ijlpqª^iiªqo^afkd m^oqkbop+ªTloiaªqo^abªprccbobaª^ªj^gloª`lkqo^`qflkª^kaªBrolmb^kª`lrkqofbp)ªtef`e e^aªq^hbkªlkªi^odbª^jlrkqpªlcªab_q)ªtbobªbpmb`f^iivªe^oaªefq+

Pledges to avoid a 1930s style protectionist reactions Qebª`roobkqªb`lkljf`ªob`bppflkªobjfkapªrpªlcªqebªkfdeqj^obªob`bppflkª^kaªmolqb` * qflkfpjªlcªqebª.60-pªåª^kªbmfplabªlcªefpqlovªqe^qªjrpqªe^sbª_bbkªfkªqebªjfkapªlcªib^a* bopª^qªqebª.2ªKlsbj_boªD/-ªPrjjfqªtebkªqebvªmibadbaªql7 ë Obco^fkªcoljªo^fpfkdªkbtª_^oofbopªqlªqo^abª^kaªfksbpqjbkq8ªfjmlpfkdªkbtªbumloq obpqof`qflkp)ªloªfjmibjbkqfkdªTQL*fk`lkpfpqbkqªjb^probpªqlªpqfjri^qbªbumloqp8 ^kaª ë Ob^`eª^kª^dobbjbkqªlkªjla^ifqfbpªcloªAle^ªkbdlqf^qflkp+ Qebpbª^obªpqbmpªlkªqebªofdeqªafob`qflk+ Fkªob`bkqªvb^op)ªqebªpiltªmoldobppªfkªjriqfi^qbo^iªkbdlqf^qflkpªibaª`lrkqofbpªqlªdo^kq j^ohbqª^``bppªfjmolsbjbkqpªqeolrdeªobdflk^iªloªcobbªqo^abª^dobbjbkqpª%OQ >pª^ka CQ>p&+ªCQ>pª^kaªOQ>pªj^vª_bªbccb`qfsbªfkªobjlsfkdªqo^abª_^oofbopª^jlkdªqo^afkdªm^oq* kbop)ª_rqª^obªqebvªol_rpqªbklrdeªqlªmolsfabª^ª_^oofboª^d^fkpqªmolqb`qflkfpqª_^`hpifafkd tebkªqebª`ofpfp*aofsbkªrkbjmilvjbkqªo^qbpªpq^oqªqlªofpb<ª BsbkªfcªCQ>pª^kaªOQ>pª`^kªmobsbkqªqebfoªjbj_bopªcoljªi^mpfkdªfkqlªmolqb`qflkfpj) qebvªalªklqefkdªqlªmobsbkqªmolqb`qflkfpjª_vªklk*jbj_boª`lrkqofbpªåªlkivªqebªTQL

51 VOX Research-based policy analysis and commentary from leading economists

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East Asia's role in supporting multilateralism B^pqª>pf^ªjrpqªmi^vª^ª`ofqf`^iªolibªfkªbkprofkdªqebªmobpbo s^qflkªlcªqebªlmbkªqo^abªpvp * qbjªqe^qªe^pªpbo sbaªeboªplªtbii+ªQ la^v)ªqebªobdflkª^``lrkqpªcloªjlobªqe^kª.,2qeªlc tloiaªqo^abªfkªdllapª^kaªpbo sf`bp)ª^kaªfqpªolibªfkªdil_^iªmolar`qflkª^kaªafpqof_rqflk kbqtlohª`lkqfkrbpªqlªabbmbk+ª@lrkqofbpªifhbª@efk^)ªG^m^k)ª^kaªPlrqeªHlob^ªe^sb bsbovªfkqbobpqªfkªifsfkdªrmªqlªqebªbumb`q^qflkpªqe^qª`ljbªtfqeªB^pqª>pf^Öpªdil_^iªfjmlo* q^k`bªfkªtloiaªqo^ab+ªFkªqefpªpbkpb)ªtbªe^sbªl_pbo sbaªqfjbivªpfdk^ipªcoljªqebª>MB@ .6*//ªKlsbj_boª/--5ªjfkfpqbof^iªprjjfqªtebobª>MB@ªjbj_bopªob^ccfojbaªqebªD/- mibadbpª`lk`bokfkdªqebªAle^ªOlrkaªkbdlqf^qflkp+ª

The crisis as an opportunity to shift back to multilateralism Qebªmobpbkqª`ofpfpªfkªqebªtloiaªb`lkljvª`^kª_bªrpbaª^pª^ªaofsfkdªclo `bªqlªob^`eª^k ^dobbjbkqªfkªqebªjriqfi^qbo^iªkbdlqf^qflkpªlcªqebªTQL+ªFqªfpªqfjbªcloªqebªbjme^pfpªql ptfq`eªcoljªobdflk^iªqlªjriqfi^qbo^iªqo^abªif_bo^ifp^qflk+ªQebªrm`ljfkdªTQLªjfkfp * qbof^iªjbbqfkdªfkªDbkbs^ªjrpqªpr``bppcriivª`ljmibqbªqebªjla^ifqfbpªlcªqebªAle^ >dbka^ªåª^ªpqbmªqe^qªpelriaªmrqªqebªtebbipªfkªjlqflkªcloªcfk^ifpfkdªqebªAle^ªOlrka fkª/--6+ª

Take steps to fix trade credit problems ?bvlkaªqo^abªif_bo^ifp^qflk)ªdlsbokjbkqpªpelriaª^aaobppªqebªfpprbªlcªc^fifkdªqo^ab `obafqªåª^ªc^firobªqe^qªfpªkltªjr`eªjlobªe^ojcriªqlªqo^abªciltpªqebªmolqb`qflkfpq jb^probpªtbÖsbªpbbkªqlªa^qb+ªJlobªqe^kª6-"ªlcªqo^abªqo^kp^`qflkpªfkslisbªpljbªcloj lcª`obafq)ªfkpro^k`bªloªdr^o^kqbb+ª>pª`obafqª^kaªfkpro^k`bªj^ohbqpª^obªcrk`qflkfkd mlloivªfkªqefpª`ofpfp)ªqo^abªe^pª_bbkªe^ojba+ªGrpqª^pªdlsbokjbkqpªe^sbªqofbaªqlªhf`h pq^oqªibkafkdªaljbpqf`^iiv)ªqebvªpelriaªpqbmªfkªqlªdbqªqo^abªcfk^k`fkdª_^`hªlkªqo^`h+ Bum^kpflkªlcªbumloqªfkpro^k`b)ªcloªbu^jmib)ªtlriaª_bª^ªab`fpfsbªpqbmªfkªqebªofdeq afob`qflk+ª Qebªcfk^k`f^iª`ofpfpªe^pª^iob^avª`roq^fibaªqebª`^m^`fqvªcloªfpprfkdªbumloqªfkpro^k`b fkªB^pqª>pf^kª`lrkqofbp+ªQefpªpelriaªklqª_bªpbbkª^pª^ªobdflk^iªloªabsbilmfkdª`lrkqo v pmb`fcf`ªmol_ibj)ª_rqªo^qeboª^pª^ªtloofpljbªqobkaªqe^qªtfiiª^ccb`qªtloiaªqo^ab+ªQeb `lkqo^`qflkªlcªqo^abªfkpro^k`bª`^m^`fqvª`lriaªmlqbkqf^iivª_b`ljbª^kªfjmloq^kqª`e^k* kbiªlcªqo^kpjfppflkªlcªqebªcfk^k`f^iª`ofpfpªfkqlªqebªob^iªb`lkljvª^kaªfqªjrpqª_bª^slfa* ba+ªFkªqefpªpbkpb)ªlkbªpelriaª`ljjbkaª^kaªmboe^mpª_rfiaªlkªqebªG^m^kbpbªfkfqf^qfsb qlªbum^kaªobfkpro^k`bª`llmbo^qflkª^jlkdª>pf^k*M^`fcf`ªbumloqª`obafqª^dbk`fbp+ª Eltbsbo)ªqebobªfpª^ªcfkbªifkbª_bqtbbkªbumloqªpr_pfafbpª^kaªdlsbokjbkqª^ppfpq^k`b tfqeªqo^abªcfk^k`fkd+ªQefpªfpªtevªtloiaªib^abopªkbbaªqlªab^iªtfqeªqefpªmol_ibjªlkª^ dil_^iªo^qeboªqe^kªobdflk^iªp`^ib+ª>slfafkdªqebªa^kdbopªlcª^ªÖpr_pfafbpªt^oÖªtfiiªobnrfob ib^abopefmªlcªtloiaªib^abop+

About the author

Ovrebf T^h^prdf fp Molcbpplo ^q Hvlql ^ka Hbfl Rkfsbopfqfbp ^ka Bjbofqrp ^q Vlhle^j^

52 What world leaders must do to halt the spread of protectionism

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53

Engage multilateral institutions in solutions to today’s problems

Kevin H. O'Rourke Trinity College Dublin and CEPR

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55 VOX Research-based policy analysis and commentary from leading economists

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56 What world leaders must do to halt the spread of protectionism m^oqª^ªobcib`qflkªlcªqebªt^vªfkªtef`eªdil_^ifp^qflkªfpªmbo `bfsbaªqlªe^sbªafccbobkqf^iiv fjm^`qbaªs^oflrpªdolrmpªfkªpl`fbqv+ªQebvªpelriaªpbosbª^pª^ªt^hb*rmª`^iiªqlªmlifqf`f^kp+ª Qebªmlifqf`^iªprpq^fk^_fifqvªlcªlmbkªfkqbok^qflk^iªj^ohbqpª`^kªklªilkdboª_bªq^hbk cloªdo^kqba+ªTfqeª^ªDob^qª@o^peªkltªprmbofjmlpbaªrmlkª^ªi^qqbo*a^vªDo^fkªFks^pflk) tbªkbbaªafccbobkqªmlif`fbpª^kaªtbªkbbaªqebjªklt +

New policies to convince voters that openness works Qebpbªmlif`fbpªkbbaªqlª`lksfk`bªloafk^o vªslqbopªqe^qªfkqbok^qflk^iª`llmbo^qflkª^ka lmbkªj^ohbqpª^obªebimfkdªqebj)ªo^qeboªqe^kªeroqfkdªqebj+ª Qebª`roobkqªmoflofqvªfpªqlª_llpqªabj^kaª^kaªj^fkq^fkªbjmilvjbkq)ª_rqª_bvlka qe^qªdlsbokjbkqpªkbbaªqlªob*bpq^_ifpeªqebªmlpq*t^oª`lkqo^`qª_bqtbbkªi^_lroª^kaª`^m* fq^i)ªmolsfafkdªp^cbqvªkbqpªcloªtlohbopªtef`eª^obªm^faªcloª_vªq^ubpªjlobªmoldobppfsb qe^kªqelpbªqlª_bªclrkaªfkªj^kvª`lrkqofbpª^qªmobpbkq+ªFkªjvªsfbtªqebªP`^kafk^sf^k bu^jmibªrkabojfkbpªqebª^odrjbkqªqe^qª`^mfq^iª%^kaªerj^kª`^mfq^i&ªjl_fifqvªj^hbp pr`eªmlif`fbpªfjmlppf_ib+ªDloalkª?oltkÖpªo^fpfkdªqebªj^odfk^iª?ofqfpeªq^uªo^qbªfpª^_lrq qlªmolsfabªrpªtfqeª^ªkf`bªk^qro^iªbumbofjbkq)ª^kaªFªprpmb`qªqe^qªqebª?ofqfpeªb`lkljv tfiiªklqª`lii^mpbª^pª^ªobpriq+ª?rqª`ib^oivªfkqbok^qflk^iª`llmbo^qflkª`lriaª^iplªmi^vª^ olibªebob)ªjlpqªl_sflrpivªfkªlpqbkq^qflrpivª`o^`hfkdªaltkªlkªq^uªe^sbkp+

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About the author

Hbsfk LÖOlrohb fp Molcbpplo lc B`lkljf`p ^q Qofkfqv @liibdb Ar_ifk) ^ka ^ `l*lod^kfpbo lc qeb @BMOÖp B`lkljf` Efpqlov Fkfqf^qfsb) tef`e ^fjp ql moljlqb ^ jlob ÖmobpbkqfpqÖ) nr^kqfq^qfsb ^ka `ljm^o^qfsb ^mmol^`e ql Brolmb^k b`lkljf` efpqlov+ Eb ob`bfsba efp MeA colj E^os^oa fk .656) ^ka e^p q^rdeq ^q @lirj_f^) E^os^oa) Rkfsbopfqv @liibdb Ar_ifk ^ka P`fbk`bp Ml M^ofp+ Eb e^p pbosba ^p ^k bafqlo lc qeb Brolmb^k Obsfbt lc B`lkljf` Efpqlov) ^ka ^p ^k baf* qlof^i _l^oa jbj_bo lc qeb Glrok^i lc B`lkljf` Efpqlov ^ka Tloia Mlifqf`p+ Eb fp Mobpfabkq* bib`q lc qeb Brolmb^k Efpqlof`^i B`lkljf`p Pl`fbqv+ Eb e^p tofqqbk buqbkpfsbiv lk qeb efpqlov lc dil_^ifw^qflk) ^ka efp Dil_^ifw^qflk ^ka Efpqlov %`l*^rqeloba tfqe Gbccobv D+ Tfiif^jplk& tlk qeb .666 >jbof`^k >ppl`f^qflk lc Mr_ifpebop,MPM >t^oa clo qeb _bpq p`eli^oiv _llh fk b`lkljf`p++ Efp i^qbpq _llh fp Mltbo ^ka Mibkqv7 Qo^ab) T^o ^ka qeb Tloia B`lkljv fk qeb Pb`lka Jfiibkkfrj) `l*^rqeloba tfqe Olk^ia Cfkai^v+ Eb fp ^ipl ^ jrkf`fm^i `lrkpbiilo fk qeb Cobk`e jlrkq^fk sfii^db lc Pq Mfboob aÖBkqobjlkq+

57

Trade policy in 2008: Great Depression redux?

Douglas A. Irwin Dartmouth College

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60 What world leaders must do to halt the spread of protectionism

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61 VOX Research-based policy analysis and commentary from leading economists

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About the author

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62 In late 2008, as the global financial crisis was spreading, so too was protectionism. Despite pledges by G20 and APEC leaders, tariffs were being raised in developing countries and industrialised nations had launched a slew of investigations into What World ‘dumped’ imports as a means of justifying tariff hikes.

The futility of protectionism in a global recession is not a new lesson now and was not a new lesson then – every world leader is and was well aware of the Leaders Should role protectionism played in exacerbating the Great Depression. But even as the global economy is recovering, leaders continue to find themselves torn. Their heart tells them to help industries and workers under stress; their head tells them Do to Halt protectionism will backfire.

This book, first published as an eBook in December 2008, collects essays from world-class economists on what global leaders must do to halt the slide towards the Spread of protectionism. It identifies three areas where world leaders should act:

• World leaders must finalise the WTO’s Doha negotiations. WTO rules remain the world’s best bulwark against 1930s-style trade wars. Protectionism • All nations should commit to a standstill on raising their applied tariffs and other forms of protection.

• Industrialised and developing nations should refrain from initiating new Edited by Richard Baldwin and Simon J Evenett antidumping cases, and postpone imposing antidumping duties wherever possible – economic nationalism should not be allowed to creep in.

With protectionism continuing to threaten global prosperity, many of this book’s recommendations hold true today.

ISBN 978-1-907142-28-4

Centre for Economic Policy Research 77 Bastwick Street, London EC1V 3PZ Tel: +44 (0)20 7183 8801 Fax: +44 (0)20 7183 8820 A VoxEU.org Book 9 781907 142284 Email: [email protected] www.cepr.org