Explaining the resilience of free trade: The Smoot-Hawley myth and the crisis

In: Review of international political economy, Band 21, Heft 3, S. 535-574

Abstract

Despite the onset of the current economic crisis there has been no significant move towards protectionism amongst most of the world's economies. Although rational institutionalist explanations point to the role played by the constraining rules of the World Trade Organisation, countries have largely remained open in areas where they have not legally bound their liberalisation. While accounts emphasising the increasing interdependence of global supply chains have some merit, I show that such explanations do not tell the full story, as integration into the global economy is not always associated with support for free trade during the crisis. In response, I develop a constructivist argument which highlights how particular ideas about the global trading system have become rooted in policy-making discourse, mediating the response of policy elites to protectionist pressures and temptations. Trade policy-makers and a group of leading economists have constructed an ideational imperative for continued openness (and for concluding the Doha Round, albeit less successfully) by drawing on a questionable reading of economic history (the Smoot-Hawley myth); by continually stressing protectionism's role as one of the causes of the Great Depression non-liberal responses to the current crisis have been all but ruled out by all except those willing to question the received wisdom. Adapted from the source document.