RABAT, Morocco — The global economic landscape is changing rapidly, and developing countries are now facing three major constraints: the resurgence of protectionism, shrinking macroeconomic policy space and profound technological disruption. With the neoliberal Washington Consensus — the dominant economic policy framework for a half-century — no longer fit for purpose, a new paradigm is urgently needed to guide development in the years ahead.
In recent years, free trade, once a cornerstone of international cooperation, has given way to rising tariffs, large-scale industrial subsidies and economic "decoupling." The United States-China trade war exemplifies this trend, with average tariff rates up sharply since 2018. Now that Donald Trump, the self-proclaimed "Tariff Man," is back in the White House, a reversal is unlikely. And it is not just the US: the European Union has also embraced tariffs, including on Chinese electric vehicles, citing unfair subsidies.
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