Columbia International Affairs Online: Working Papers

CIAO DATE: 06/2011

Is Protectionism Dying?

Uri Dadush, Shimelse Ali, Rachel Odell

May 2011

Carnegie Endowment for International Peace


Despite a limited increase in the incidence of protectionist measures during the recent financial and economic crisis, the effects on global trade appear small—the world, remarkably, did not resort to protectionism. In addition to the concerted stimulus measures, financial rescues, and the strengthening of lender-of-last-resort facilities that restricted the duration and depth of the economic downturn, the World Trade Organization’s disciplines, enforceable through its dispute settlement mechanism, no doubt played an important role in staving off trade protection. But this is only one part of the story. The increased resistance to protectionism is the result of a complex, mutually reinforcing set of legal and structural changes in the world economy that have made a return to protection more costly and disruptive and have established new vested interests in open markets.