The New Protectionism and the Nature of World Trade * (THE Quaid-I-Azam Lecture) (Essay‪)‬

1. INTRODUCTION Despite multilateral efforts since World War II to lower barriers to trade among countries, there is ample evidence that protectionism is still a powerful force serving to inhibit the exchange of goods and services. It is the case that tariff levels have been drastically reduced-for industrial countries from an average of 40 percent in 1947 to less than 5 percent today. (1) However, in recent decades a variety of non-tariff barriers to trade has mushroomed in popularity and the tendency to favour regional trading areas implies discrimination among countries in trading relationships, counter to the basic multilateral approach and most-favoured-nation treatment sponsored by the various GATT negotiating sessions. The increased pressures for protectionism have in recent years been fueled by the world recession, on occasion utilising the rhetoric of the "new trade theory", with its emphasis on the existence of imperfectly competitive markets.