Courtesy Reuters

Economic success in today’s world requires countries to liberalize to attract mobile international investment, which goes far to determine the distribution of global production, jobs, profits, and technology. Success also requires countries to compete effectively in international markets rather than simply at home. A process of competitive liberalization, therefore, has driven the trend toward free trade among a myriad of countries in all parts of the world with very different economic systems, at very different stages of development, and with very different prior philosophies.

Interstate arrangements are usually necessary to implement such liberalization, however, because domestic political opposition frequently blocks countries from abolishing their traditional barriers unilaterally. Entrenched interests fight hard, and often with prolonged success, to maintain their protected positions. Trade reform thus requires mobilizing enough pro-trade interests, especially exporters and others who would gain directly from the opening of markets abroad, to overcome those who resist further

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  • C. Fred Bergsten is Director of the Institute for International Economics. Since 1991 he has chaired the Competitiveness Policy Council created by Congress and, from 1993 to 1995, the Eminent Persons Group that advised the Asia-Pacific Economic Cooperation forum.
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