The miseries inflicted by colonial powers on Africa, Asia, and Latin America are undeniable to economic historians. Borders were drawn that made no economic or ethnic sense; little was invested in the human capital or the institutional structure needed for growth and stability. And while the sun set on the western colonial empires more than a half century ago, the leaders of what are today called developing countries all have reason to appreciate William Faulkner's line: "The past is never dead. It's not even past."
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One living legacy is a crazy quilt of trade preferences and protection buttressed by a mix of geopolitics, nostalgia, and rich-country interest group protectionism -- distortions that undermine growth in export-oriented agriculture and make it tough for women in some of the poorest countries in the world to sew their way out of poverty. Indeed, most developing country leaders view rich-country protectionism as the cause of the deadlock in the World Trade Organization's so-called Doha Round of negotiations aimed at sweeping trade liberalization.
The advanced economies do indeed deserve a disproportionate share of the blame. But as economist Simon Evenett of Switzerland's University of St. Gallen has observed, "the beggar thy neighbor game is not confined to North-South trade." The African Development Bank recently reported that only about one-tenth of the continent's total trade is neighbor-to-neighbor. The numbers for Latin America and Asia are higher (22 percent and 50 percent respectively). Poor countries complaining about commerce-impeding barriers would be well advised to check the mirror to see where their troubles lay.
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Most levies imposed by America and Europe have fallen to just 2 to3 percent, while a handful of newly rich countries led by Hong Kong and Singapore have dispensed with tariffs on virtually everything.
Now consider West Africa's Benin, one of the poorest countries in the world (GDP per person in terms of purchasing power: $1,700). Benin's meager trade and living standards are held back by agricultural and industrial tariffs averaging 14 and 12 percent respectively. And it's pretty much the same throughout the poorer corners of the world. In Cameroon (GDP per capita: $2,300), farmers hide behind agriculture tariffs averaging 22 percent, while manufactured goods are hit with 12 percent import levies. The parallel figures for Burundi (GDP per capita: $600) are 20 percent and 11 percent; for Gambia (GDP per capita: $1,900) 17 percent and 16 percent.
India's economic reforms, which included sharp reductions in industrial tariffs (to 10 percent) are widely credited for the quadrupling of average living standards over the last two decades. But India still protects food imports with 31 percent average tariffs, with peaks up to 56 percent (for coffee and tea).
In the Doha negotiations, the rich countries have agreed to allow Benin, Burundi, and the rest of the world's poorest countries to maintain their tariffs. (Perhaps not surprisingly: They collectively represent a very modest market for western exports.) But more muscular emerging market economies -- notably India and South Africa -- have threatened to make further tariff reform a deal-breaker. In fact, they are demanding the right to raise tariffs sharply under some circumstances.
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