People who are more prosperous and contented are also less likely to fight. But that is not all. The trade wars in the 1930s are proof of how protectionism can easily plunge countries into a situation where no one wins and everyone loses. The short-sighted protectionist view is that defending particular sectors against imports is beneficial. But that view ignores how other countries are going to respond.
Confidence is the key to avoiding that kind of no-win scenario.
When governments are confident that others will not raise their trade barriers, they will not be tempted to do the same. They will also be in a much better frame of mind to cooperate with each other. The WTO trading system plays a vital role in creating and reinforcing that confidence. Particularly important are negotiations that lead to agreement by consensus, and a focus on abiding by the rules. World Trade Organization, rue de Lausanne 154, CH-1211 Geneva 21, Switzerland World Trade Organization 1999.