The name is absent

17

evidence that the highly protectionist, import-substituting policies pursued by a number of countries in
earlier postwar decades were often detrimental to sustained development. The policies encouraged the
emergence of inherently high cost industries, contributed to biases in domestic cost structures that
impeded export growth, and sheltered domestic enterprises from competition and the need to innovate.
Greater openness has tended to be associated with higher economic growth. However, this criticism of
inward-looking policies does not demonstrate that protectionist measures, as part of an array of domestic
policies, are ineffective in contributing to the development of emerging countries. The recognition of the
value of protection in fostering the establishment of new industries has a long tradition. In providing
protection from foreign competition, protection may allow time for new firms to learn and to overcome
scale disadvantages.

These differences in causal beliefs are not likely to be resolved any time soon. Practically, the
persuasiveness of the one view or the other depends a great deal on the specific circumstances of the
individual country under consideration. Countries vary so enormously in their economic size and stage of
economic development that any sweeping generalization may justifiably be suspect. This being so, any
agreement on how the global trading system can fairly address the issue, is only possible if the differences
in causal beliefs are accommodated. This means that the multilateral trade rules should make adequate
allowance for the use by countries of protectionist measures that are defensible as developmental policies.

5. Equality of Opportunity in Supporting Rules

5.1 Developed countries

Reciprocally negotiated reductions in the principal trade barriers are supported by other rules like those
relating to customs procedures, the application of sanitary or phytosanitary standards, technical barriers to
trade, the use of quantitative restrictions, and subsidies. Some of these rules partly serve to enhance
market access in that they facilitate trade and reduce transactions costs. But they also meet the need of
trading partners to reassure themselves that the value of the negotiated concessions on direct trade barriers

higher utilization rates. Preferential margins were, of course, higher and perhaps rules of origin were less onerous.

<<   16   17   18   19   20   21   22   >>

More intriguing information