Developed Countries on Developing Countries’ Exports of Manufactures

The twenty-five years after 1945 witnessed the most rapid rate of sus-tained economic growth the world economy has ever experienced. An even more rapid expansion of international trade and capital flows accompanied and stimulated that growth. Whereas world real GNP grew at an average rate of about 5.2 percent over the period 1950-70, world exports in constant prices grew even faster-at 7.3 percent annually. The expansion era was marked by a systematic and considerable reduc-tion in barriers to trade and capital movements: declining barriers stimu-lated international economic relations and hence national productivity and income growth, and prosperity eased the further dismantling of barriers. The successive GATT rounds of negotiations were the principal instrument of freeing up trade, resulting in average tariffs on industrial products of less than 5 percent in the European Community (EC), the United States, and Japan at the end of the Tokyo Round. The rate of growth of both real GNP and of trade, however, declined after 1973, and a widespread discussion of protectionist pressures fol-lowed. In part because of the continuing multilateral trade negotiations and the fact that they prevented the unilateral raising of tariffs, these pressures were generally for the erection of nontariff barriers (NTBs) and for nonborder protection. For a variety of reasons to be discussed below, some of the most visible pressures and public discussion were aimed a