Retooling global trade

Export-led growth emerged as a pillar of development strategies in the last three decades. The progressive reduction of tariff and non-tariff barriers to trade between countries has been instrumental in generating a fivefold expansion of the volume of world exports since 1980. Paradoxically, economic growth in most developing countries has not matched the rates of economic progress achieved in the first decades after the Second World War when many followed import-substitution strategies. Exceptions to this pattern—notably China and the newly industrializing countries in East Asia—have systematically followed a pragmatic approach that combines a gradual exposure to external markets with an effective collaboration between the private and the public sector towards building dynamic long-term competitiveness. Their experiences suggest that neither protectionism nor abrupt liberalization is the best strategy for achieving high and sustained rates of economic growth.

Related Subject(s): Economic and Social Development