The developing countries suffer greatly from the practice of protectionism by their trading partners and shortfalls from the multilateral, non-discriminatory, and transparent trade regime to which the GATT ostensibly aspires. Trade barriers in the industrialized countries impose costs upon the developing world which substantially exceed, in the aggregate, the total flow of official development assistance. These costs seem certain to remain largely in place, regardless of new arrangements in the GATT or elsewhere, throughout the 1990s. Section 1 of this chapter addresses the issue of the developing countries' interest in reducing protectionism in the industrialized world.

Protectionism is also found in the developing countries. Its logic, in the context of overall development efforts, and provided it is not taken to extremes, has traditionally received some professional backing. In the 1970s and 1980s, however, there have been significant trade policy changes in much of the developing world – typically in the direction of liberalization and reduced industrial protectionism. Section 2 addresses the continuing debate over the appropriate role of trade policy in the industrialization of low-income countries in the context of current liberalization initiatives.

The new protectionism, the GATT and the developing countries

The post-war international economic order was on the whole created by and for the victorious powers. Memories of the protectionist and discriminatory practices of the 1930s were fresh. It was a time of unusual and worldwide commitment to the building of a more stable, efficient, and equitable international order.