After World War II, policymakers around the world believed firmly that free trade was essential for world prosperity. These convictions translated into several successful ‘:’agreements to lower tariffs, as Figure 15-10 shows, The free-trade philosophy of economists and market-oriented policymakers has been severely tested by periods’ of high- unemployment and exchange-rate disturbances. Nevertheless, most countries have continued the trend toward increased openness and outward orientation.
By most accounts, countries have benefited from more open trade in increased trade flow sand higher living standards. But the struggle to preserve” open markets is constantly tested as inter-est groups use new weapons and arguments in their tireless attempt to fell the mighty theory of comparative advantage. The perils of trade policy are ever with us, as economist Gary Clyde Hufbauer writes.
Ten years from now, Seattle could be seen as only one more pause in the long march toward open ” markets On the other hand, ten years from now, Seattle could be seen as the turning point-the event that marked the end of the policy-driven open markets agenda for much of the world. If this is the outcome, many countries could build new barriers, especially in areas not already covered by international rules (such as financial services and e-commerce).