Monday, February 02, 2009

Warning about ‘specter’ of protectionism

Under today’s global financial crisis, developing nations can gain more influence in economic globalization if they handle their present opportunity right. So says Dani Rodrik, professor of international political economy at Harvard, in his lead commentary as moderator of the economic development and the global crisis debate launched last month by

In opening a debate on the interests and priorities of developing nations, Rodrik offers the following advice in the context of the U.S. situation, where trade policy is “under severe pressure to provided some redress” for globalization’s adverse impact on workers.

“It will not do much for good for developing nations to raise the specter of protectionism each time such concerns are voiced. The political and economic reality demands a more nuanced and cooperative approach. They should say no to trade protectionism straight and simple.

“But they should be willing to negotiate with advanced nations on avoiding regulatory races to the bottom in such areas as labor standards or tax competition. This is in their long-term self interest. Without buy-in from the middle classes of advanced nations, it will be very difficult to maintain a global trade regime as open as the one we have had in recent years.”

A sound message, but not only for the developing world. When will pundits in the rich world start getting it?

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