A few years on now, he now thinks they were more or less right to say that unmanaged trade liberalization works against the interests of the poor. In support of which, he argues:
- The evidence shows that the benefits that would flow from increased international trade will not materialise if markets are simply left alone. When this happens, liberalisation is used by the rich and powerful international players to make quick gains from short-term investments.
He also cites a few other inconvenient facts which free trade advocates tend to overlook -- most notably, that supposed "free trade success stories" like Taiwan, South Korea, and more recently China, Vietnam and others actually managed their trade quite carefully, and full-scale trade liberalization without long preparatory work has often been disastrous, as in Zambia and Ghana. And he has a few words to say about Western governments that refuse to abandon subsidies that have ruinous effects on third world farmers.
But there's one bit of true weirdness toward the end of his piece, in policy recommendations:
- The role of the IMF and World Bank is also of concern. The
conditions placed on their loans often force countries into rapid
liberalisation, with scant regard to the impact on the poor.
The way forward is through a regime of managed trade in which markets are slowly opened up and trade policy levers like subsidies and tariffs are used to help achieve development goals.
The IMF and World Bank should recognise that questions of trade liberalisation are the responsibility of the WTO where they can be considered in the overall context of achieving poverty reduction and that it is therefore inappropriate to include trade liberalisation as part of a loan agreement.
The World Bank and IMF were set up with the explicit mandate to foster development, while the major declared purpose of the WTO is purely to increase trade. So, this boils down to the complaint that the World Bank and IMF are just doing their jobs so badly that they should just let someone else take the lead.
(And even if you buy that, should it really be the WTO? Their processes -- as seen in, say, the intellectual property arena, favoring strong protection for genetically engineered crops and the like, also quite arguably favor the interests of the rich...)