Trade policy and the crisis: “The fateful allure of protectionism”

The CEPR & World Bank have a new book on trade policy and the crisis edited by Simon Evenett, Bernard Hoekman, and Olivier Cattaneo.

They are mostly warning that countries should guard against protectionism, though we haven’t seen any serious outbreak yet:

Some countries have utilized the ‘policy space’ they have to raise tariffs, but projections – based on past behaviour – are that any such increases are likely to remain limited: In a sector that in the 1970s and 1980s became a bastion of protectionism, textiles and apparel, policy remains very open. Another illustration of the relevance of WTO rules is that countries that are not members are among those that have made the most intensive use of measures to restrict trade and/or investment – e.g., Algeria, Russia.

Whether more positive actions – complete the Doha round, look at climate change initiatives, fund trade policy monitoring efforts, etc – are politically feasible remains to be seen.