In this earlier post, I looked at three of the ‘old standbys’ that are likely to provide governments with all the ‘wiggle-room’ they need to increase protection while remaining nominally compliant with their WTO obligations.
This time, two more oldies but goodies that are still more likely, in my view, to figure in the coming round of trade protection. These two threaten high levels of ‘tailor-made’ protection for firms that are struggling through the recession, but they do so at the cost of lower levels of demand at home (so much for ‘stimulus’!), increased pressure on competitors in other countries and a further cut in world trade volumes. Bad for almost everyone.
At the end of this post I start to look at some defenses against the coming round of protection.