What is New in Protectionism? Consumers, Cranks, and Captives

The most contentious international trade issues currently arise not from traditional producer requests for protection, but as a result of consumers and other economic agents asking governments to erect trade barriers. The economic model that underpins multilateral trade policy-as manifest in World Trade Organization (WTO) agreements-only predicts that firms will lobby for protection, with no provisions for how governments faced with requests for protection from other groups can respond. Consequently, governments have been forced to defend the imposition of trade barriers using spurious justifications; the WTO dispute mechanism has largely dismissed these justifications, and consumers (and others) feel disenfranchised. The result has been a loss of credibility for the WTO and sometimes its demonization. The WTO needs to change but a new economic model must also be developed to deal with a broader spectrum of protectionist interests.