Alternative Liberalization Strategies

This paper examines various strategies that have been proposed for halting the recent drift toward protectionism and restoring a more liberal trading regime. A number of groups and individuals propose a multilateral approach aimed at immediately reducing all forms of import barriers and export subsidies on a nondiscriminatory basis across all commodities. Others, who doubt that all major countries are prepared at this time to pursue this approach, favor a bilateral and regional strategy in which those countries willing to liberalize conclude agreements that are left open for others to join. They believe that this approach will eventually lead to multilateral liberalization. Some groups believe that neither of these approaches will succeed and that an aggressive strategy of quickly retaliating against the unfair trade practices of other countries is the best way to bring countries to the bargaining table for multilateral negotiations. The merits and problems of these various strategies are considered as well as their prospects for implementation. The importance of other conditions necessary for trade liberalization such as satisfactory domestic and international macroeconomic conditions are also discussed.