Economic Development in a Protectionist World
Regardless of whether US President-elect Donald Trump launches a new trade war, climbing the global value chain and reaching middle-income status through manufacturing exports has already become difficult for poorer countries. If the threat of increased protectionism now leads them to focus more on services, so much the better.
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CHICAGO – As apprehension grows in China, Europe, and Japan about a possible trade war triggered by the incoming Trump administration, one should also spare a thought for developing countries. Their tried-and-tested method of expanding beyond agriculture to achieve middle-income status has been to embrace low-skilled export-oriented manufacturing. How will these countries fare now?