Our bottom line is that the nature of the relationship between trade policy and economic growth remains very much an open question. The issue is far from having been settled on empirical grounds. We are in fact sceptical that there is a general, unambiguous relationship between trade openness and growth waiting to be discovered. Rodriguez and Rodrik do not say protectionism is good for growth but their findings are important in the light of the pressure for countries to liberalise, especially since many western nations industrialised behind high tariff walls. There is a world of difference between the US in the 1920s, when a high tariff was combined with ferocious internal competition, and North Korea, where protectionism is combined with an absence of internal competition.
Protectionism can be bad for growth but only if accompanied by other harmful economic policies.
Again, the reality falls short of the rhetoric. A report by Consumers International, an umbrella body for consumer organisations around the globe, concludes that the last package of liberalisation measures reaped results only for a handful of multinational companies and has not improved consumer rights. Throughout the world, consumers are finding that the threat of trade sanctions is being used to dismantle consumer protection in favour of corporate rights. Despite evidence from the World Health Organisation that, once the market was opened, the US multinational tobacco companies would do their utmost to force governments to accept terms that undermined public health, a WTO disputes panel ruled against the Thai ban. This is the Landes argument turned on its head, with the impact of trade being bad rather than good for health.