Financial Times ⁽²⁰⁾

William R. Cline's reaction (Letters, August 9) to my exposure of the fallacy that the removal of the rich country subsidies and protection in agriculture is desirable because it will do most good to the least developed countries (LDCs) is to deny the fallacy by assertion. (Letter, FT August 12, 2004) Read full article Sir, William R. Cline's reaction (Letters, August 9) to my exposure of the fallacy that the removal of the rich country subsidies and protection in agriculture is desirable because it will do most good to the least developed countries (LDCs) is to deny the fallacy by assertion. Mr Cline concedes that two-thirds of the LDC poor reside in the countries that are net food importers. The majority of these countries will surely be hurt by higher food prices. I see nothing in his "model" that shows anything otherwise except by untested assumptions. A bigger, and largely unnoticed, problem he does not address is that even the LDC exporters stand to lose from the liberalisation. They currently enjoy duty- and quota-free access to the European Union internal…

Read full article (pdf) (Op-ed, August 3, 2004) Thanks to the advocacy of a few pressure groups and many international institutions, there is now a near-universal agreement that developed country subsidies and protection in agriculture hurt the poorest, least developed countries. This is a telling example of how political correctness can lead to the acceptance of an economically incorrect proposition.

Martin Wolf ("How managing growth can consign poverty to history", May 5) is right on the mark when he points out that trade openness is a necessary, even if not sufficient, condition for sustained, rapid growth. Ironically, some globalisation advocates have ended up hurting their cause by suggesting indirectly that trade openness by itself is sufficient to raise the growth rate (Letter, FT, May 10, 2004). Sir, Martin Wolf ("How managing growth can consign poverty to history", May 5) is right on the mark when he points out that trade openness is a necessary, even if not sufficient, condition for sustained, rapid growth. Ironically, some globalisation advocates have ended up hurting their cause by suggesting indirectly that trade openness by itself is sufficient to raise the growth rate. Such a suggestion is implicit, for example, in the claims, made on the basis of cross-country econometric studies, that an X per cent reduction in trade barriers will lead to a Y per cent increase in the growth rate. Critics are then readily able to counter such claims by citing numerous examples…

Sir, The article by Horst Kohler of the International Monetary Fund and James Wolfensohn of the World Bank in support of the multilateral trading system and the Doha round is welcome, especially as it belatedly repairs important sins of commission and of omission by these Bretton Woods institutions ("We can trade up to a better world", December 12). (Letter with Jagdish Bhagwati) (FT December 24, 2003) Sir, The article by Horst Kohler of the International Monetary Fund and James Wolfensohn of the World Bank in support of the multilateral trading system and the Doha round is welcome, especially as it belatedly repairs important sins of commission and of omission by these Bretton Woods institutions ("We can trade up to a better world", December 12). The sins of commission were different for the two institutions. The IMF's was indirect. Having encouraged the hasty adoption of capital account convertibility in the developing countries, the IMF played a role in the creation of the Asian financial crisis, while compounding it through mistaken conditionality in the year thereafter. The enthusiasm for trade liberalisation was…

Read full article (Op-ed with Jagdish Bhagwati, FT July 13, 2003) Bilateral deals fragment the coalitions of developing countries, as each abandons its legitimate objections to the inclusion of extraneous issues in trade treaties. Having abandoned these objections in a bilateral deal with the US, how can those countries pursue them in WTO negotiations? (FT, 13 July 2003) (Jagdish Bhagwati and Arvind Panagariya) Pascal Lamy, the European commissioner for trade, recently wrote that "half the world's economists" were opposed to the epidemic of bilateral free trade agreements (FTAs). That was a splendid example of British understatement from a Frenchman. The fact of the matter is that nearly all scholars of international economics today are fiercely sceptical, even hostile to such agreements. By contrast, politicians everywhere have succumbed to a mania that originated in Europe but is now eagerly promoted by Robert Zoellick, the US trade representative, with Asia - the last holdout - now joining in. We are witnessing possibly the biggest divide between economists and politicians in the postwar period. Unfortunately, the economists are right. The politicians' lemming-like rush…