Nicolás Albertoni, Trade Protectionism in an Uncertain and Interconnected Global Economy Routledge, London and New York, 2024.

What the paper says

Protectionism is back with a vengeance.The tariff escalations between Washington and Beijing, the reshoring imperatives unleashed by COVID-19, and the weaponization of economic interdependence following Russia's invasion of Ukraine have made trade restrictions a central instrument of statecraft once again.In this context, Nicols Albertoni's Trade Protectionism in an Uncertain and Interconnected Global Economy arrives at a propitious moment, though its origins predate these recent convulsions.Based on research conducted between 2015 and 2022, the book anticipated much of what has since become conventional wisdom: that the architecture of global trade liberalization built over seven decades contains within it the seeds of its own subversion.What makes this work particularly valuable is not its prescience alone, but its systematic documentation of how protectionism has evolved in form even as it has intensified in substance.The central puzzle Albertoni addresses is counterintuitive: how is it that protectionist measures have multiplied even as countries have become increasingly interconnected through preferential trade agreements (PTAs) and global value chains (GVCs)?His answer challenges the conventional wisdom in the trade interdependence literature.While previous scholarship maintained that deeper economic linkages between countries reduce the likelihood of trade tensions, Albertoni demonstrates that the relationship is more nuanced.His core hypothesis suggests that PTAs and GVCs, under conditions of heightened economic uncertainty, can become conduits for protectionism rather than simply deterring it.Countries facing domestic pressures to shield their economies from external shocks increasingly resort to non-tariff measures (NTMs), such as subsidies, licensing requirements, and technical barriers, that circumvent the transparency requirements of traditional tariff-based protection.Albertoni, following the work of Baldwin and Evenett (2009), calls this 'murky' protectionism, and his book offers both a theoretical framework and substantial empirical evidence to explain its rise.Methodologically, the book employs a sophisticated mixed-methods approach.The quantitative component draws on an original dataset compiled from the Global Trade Alert (GTA) database, covering over 170 countries and representing approximately 98% of global trade flows from 2009 to 2019.Albertoni tests five main hypotheses using directed dyad-year data at the state level, examining both the likelihood of protectionist responses and the conditioning effects of PTAs and GVCs on the type of measures deployed.The econometric analysis yields compelling results: while PTAs do appear to reduce overall protectionist retaliation, they are positively correlated with non-tariff responses specifically.This counterintuitive finding resembles evidence on the use of non-tariff responses among democracies (Kono, 2006).Countries embedded in trade agreements respond to partners' protectionism with less visible instruments, precisely to avoid escalating tensions while still satisfying domestic constituencies.