Via Jonathan Dingel, I see that Ha-Joon Chang is making the case for "forward-looking protectionism in the US." A key sentence:
Mr Obama should use protectionism in a similarly forward-looking way. Industries that can be revived through re-tooling of its factories and re-training of its workers should be given protection, but only if they fulfill certain conditions regarding investment and training.
Jonathan offers some good criticisms, but I'll add one more point. The U.S. is not the only country in the world. If the U.S. protects industries so they can re-tool, presumably the rest of the world will do the same in response. If that happens, and we see the rise of competitive protectionist measures, will the world as a whole really be better off? Maybe a few will come out ahead, but overall that sounds like a downward spiral to me.
Chang also says:
Mr Obama should take a lead in creating a world trading system that allows asymmetric protectionism between the rich countries and the poor countries, with the latter protecting their markets more and gradually opening up in line with their economic development.
On this issue, I would say that I'm not sure Obama needs to create such a system. That's what we already have.
