chapter  1
19 Pages

Has trade liberalisation in poor countries delivered the promises expected?: Penélope Pacheco- López and A.P. Thirlwall

Trade liberalisation has not lived up to its promises. But the basic logic of trade – its potential to make most, if not all, better off – remains. Trade is not a zero-sum game in which those who win do so at the cost of others; it is, or at least can be, a positive-sum game, in which everybody is a winner. If that potential is to be realised, first we must reject two of the long-standing premises of trade liberalisation: that trade liberalisation automatically leads to more trade and growth, and that growth will automatically ‘trickle down’ to benefit all. Neither is consistent with economic theory or historical experience.