Who Gains From Free Trade?
In Foreign Policy, economist Arvind Panagariya debunks many myths about free trade and globalization.
A snippet:
In low-income countries, openness to international trade is indispensable for rapid economic growth. Indeed, few developing nations have grown rapidly over time without simultaneous increases in both exports and imports, and virtually all developing countries that have grown rapidly have done so under open trade policies or declining trade protection. India and China are the best recent examples of countries that started with relatively closed trade policy regimes in the 1980s but subsequently achieved accelerating growth while opening up their economies. From the mid-1950s through the mid-1970s, industrial countries also enjoyed rapid growth while dismantling their high post-World War II trade barriers and embracing new technologies. Japan offers the most dramatic example, but countries such as Denmark, France, Greece, Italy, the Netherlands, Norway, and Portugal exhibited similar patterns.
He tackles other issues, too, including whether rich countries are more protectionist than poor, whether free trade hurts the environment, etc.
Whole thing here.
One counter: He's right to say that, on balance, poor countries tend to be more protectionist than rich ones. But it's worth noting, as Johan Norberg, the author of In Defense of Global Capitalism and the subject of a great interview in the December issue of Reason, points out, "Western duties on export commodities from the developing world are 30 percent above the global average."
Indeed, the West (read: rich countries) have remained protectionist in agriculture and textiles, two areas in which developing countries can actually compete. Norberg rightly calls this hypocrisy "the white man's shame."
[Link via Arts & Letters Daily]
