WELFARE AND TRADE WITH LESS DEVELOPED COUNTRIES
| Published date | 01 June 1979 |
| DOI | http://doi.org/10.1111/j.1467-9485.1979.tb00545.x |
| Author | Stuart W. Sinclair |
| Date | 01 June 1979 |
Scottish Journal
of
Political Economy,
Vol.
26, No.
2,
June 1979
Review Section
WELFARE AND TRADE
WITH
LESS
DEVELOPED
COUNTRIES
STUART
W.
SINCLAIR
London
W.
R. CLINE, N.
KAWANABE,
T.
0.
M.
KRONSJO and
T.
WILLIAMS,
Trade Negotia-
tions In The Tokyo Round: A Quantitative
Assessment.
Washington,
D.C.
:
Brookings
Institution, 1978, pp. 314Sxiv. $8.50.
C.
R.
FRANK,
JR.,
Foreign Trade and
Domestic Aid.
Washington, D.C.
:
Brookings
Institution, 1977, pp. 18OSxi. E7.80.
M. SZENBERG,
J.
W.
LOMBARDI
and
E.
Y.
LEE,
Welfare Efects
of
Trade Restrictions:
A Case Study
of
the
U.S.
Footwear Industry.
New York: Academic Press, 1977, pp.
161+xviii. f11.70.
These three important books from the
United States deal with various aspects of
“the new protectionism”. They try to show
the size, nature and distribution of the costs
involved in developed countries’ (dcs’)
efforts to restrict access for less developed
countries’ (Idcs’) exports. They
also
try
to
formulate policy alternatives to such
pro-
tectionism and examine the barriers-both
political and economic-which sometimes
prevent such alternatives being used. Before
discussing these books, however, the back-
ground which is common to all three will be
quickly reviewed.
The growth of manufactured exports
from ldcs has been spectacular: between
1970 and 1976 they increased from $69
billion to $27.9 billion (UNCTAD, 1978).
The significant point about these exports is
their concentration in a number of product
lines, and their concentration by exporter.
Fifty products contributed 79 per cent of
the increase in Idcs’ manufactures export
earnings over 1970/76; the four fastest-
growing were textiles andclothing, transistor
radios and footwear. And by country of
origin. the small middle-income ldcs-
14*
207
South Korea, Singapore, Hong Kong and
Taiwandominated the growth of trade,
with Brazil, India and Mexico growing in
significance. In
a
small number of product
groups, then, certain ldcs have carved a
substantial niche in dc markets. Although,
overall, ldcs still only account for 7-5 per
cent of dcs’ imports of the top
50
manu-
factured items, the growth of these imports
has produced considerable alarm in certain
quarters in dcs. As the 1978 World Bank
Annual Report
put it, “developing countries
are becoming increasingly concerned about
the ability of policymakers in the in-
dustrialised world to withstand pressure for
the imposition of new quantitative re-
strictions” (IBRD, 1978, p. 16).
Against this background of rapidly rising
Idc involvement in trade in manufactures,
dcs have been struggling to bring to a close
the seventh or “Tokyo” round of GATT
negotiations. These meetings in Geneva
began in 1973 with the intention of further
reducing the level of tariffs which, after the
Kennedy Round, averaged 8-9 per cent for
manufactures. It was also hoped that non-
tariff barriers could be regularised through
multilateral agreement. But
as
the growth
of sectional interests in protectionism grew,
“Voluntary Export Restraints”
(VERs)
on
a
variety of Idc exports were negotiated
during the lifetime of the Tokyo Round:
shoes, cutlery and televisions are among the
goods affected. The Multi Fibre Arrange-
ment
was
also renegotiated, to restrict still
further the growth of many textiles and
clothing exports from ldcs, and many other
industries have appealed for similar pro-
tective measures.
Business Week
on 26
December 1977 summarised the American
position thus: “The new reality is that the
public no longer perceive protectionism as
a
bad thing.”
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