The Death of the Washington Consensus?

US officials over the past two decades insisted that free trade without limits tend to provide more benefits than costs for American and other consumers. Princeton economist Paul Krugman won the Nobel prize for economics, not for his columns for the New York Times, but for his study of international trade and his stance against trade without limits. Krugman has long insisted that government should “play a role in connecting beneficiaries of strategic trade policy to the overall economy,” explains Kevin Gallagher for the Guardian, who adds, “Today's trading system is out of whack with these frontier issues in economic thought.” Trade rules that prohibit nations from giving special treatment to domestic industries do not work for poor nations, Gallagher notes, while protections like those on intellectual property reinforce the inequality of nations. Gallagher describes US-style trade agreements as “the most severe in constraining the ability of developing countries” to deploy strategic trade policies that maximize benefits of globalization. In a crowded world, it’s no longer every nation for itself. – YaleGlobal