The Political Economy of Trade Reform in Emerging Markets

The Political Economy of Trade Reform in Emerging Markets

Crisis or Opportunity?

Edited by Peter Draper, Philip Alves and Razeen Sally

This timely book brings fresh analysis to the important issue of trade policy reform in emerging markets.

Chapter 1: Introduction: Trade Liberalization in the Twenty-first Century

Razeen Sally

Subjects: economics and finance, international economics, political economy, politics and public policy, political economy

Extract

Razeen Sally What are the prospects for further economic liberalization in the twentyfirst century? The ‘Washington Consensus’ attracts greater scepticism now than it did in the 1980s and 1990s, and the momentum of liberalization, globally, has slowed down. An ever greater number of countries seem increasingly reliant on trade negotiations to deliver change, but none seem to want that change to apply to themselves. Besides, historically trade negotiations have delivered little real liberalization; the vast bulk has been driven unilaterally, and the benefits have flowed to the reformers. How necessary is further liberalization of trade and foreign direct investment? What obstacles lie in its path? What are its political requisites? What are the links with domestic economic reforms? What is the balance between unilateral liberalization and reciprocity (liberalization through trade negotiations and agreements with donors)? How have countries managed these kinds of reforms in the past, and what are the challenges to that process today? These questions inform the chapters in this excellent collection of country case studies. The seven countries studied – Australia, Brazil, Chile, India, Malaysia, New Zealand and South Africa – present an eclectic mix of histories and circumstances, but are unified by the thrust, if not the finer details, of their trade and broader economic policy choices. Australia, Chile and New Zealand are the ‘strong’ reformers in the group. They have more or less eliminated all border barriers to trade and investment, and are well into the much more difficult domestic regulatory reforms that trade opening induces. Malaysia...