Trade barriers and protectionism among developing countries

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.