Trade barriers and protectionism among developing countries

Nature

Special preferential arrangements between some developed and developing countries result in imports from other developing countries being faced with more restrictive tariff or non-tariff barriers than competing imports from these developed countries. Lowering of trade barriers among developing countries is more difficult than among developed countries because of the threat to their sensitive balance of payments situation; loss of customs revenue which is a principal form of taxation; and the loss of employment opportunities in activities which have to be abandoned as a result of trade liberalization. That such losses would presumably be compensated by increased output and employment in other sectors is not likely to carry much weight with governments in the conditions of under-employment and under-utilization of capacity which prevail in most developing countries.

Background

The significance of trade barriers and protectionism among developing countries emerged in the 1970s, as nations in the Global South sought to shield nascent industries from external competition. Over subsequent decades, researchers and policymakers observed that such measures, while intended to foster self-reliance, often hindered regional integration and economic growth. The issue gained global prominence during the 1990s, as multilateral trade negotiations highlighted persistent intra-developing country restrictions and their complex developmental implications.

Incidence

Trade barriers and protectionist measures among developing countries have become increasingly prevalent, affecting regional integration and economic growth. According to the World Trade Organization, between 2018 and 2022, developing economies introduced hundreds of new tariffs, import quotas, and non-tariff barriers, particularly in sectors such as agriculture, textiles, and manufactured goods. These actions have disrupted supply chains, limited market access, and hindered the potential benefits of South-South trade, with significant implications for poverty reduction and sustainable development.
In 2021, Nigeria closed its land borders with neighboring Benin and Niger to curb smuggling and protect domestic industries. This move severely impacted cross-border trade, leading to shortages and price increases for staple goods in both Nigeria and its neighbors.

Claim

Trade barriers and protectionism among developing countries are a critical and urgent problem. These policies stifle economic growth, limit access to essential goods, and hinder regional cooperation. Instead of fostering prosperity, protectionism traps nations in cycles of poverty and inefficiency. Breaking down these barriers is essential for unlocking innovation, creating jobs, and improving living standards. Ignoring this issue perpetuates inequality and undermines the potential of billions striving for a better future.

Counter-claim

Trade barriers and protectionism among developing countries are vastly overstated as problems. These nations have far greater challenges—poverty, infrastructure, and education—that deserve real attention. Minor tariffs or quotas between developing economies barely register in the global trade landscape. Focusing on these so-called “barriers” distracts from urgent priorities. Frankly, the obsession with protectionism among developing countries is a red herring, diverting resources from issues that actually matter for their growth and well-being.