The recession that has plagued the global economy during the past three years has given rise to a worldwide wave of protectionism. Confronted with stagnant economic activity and high and rising unemployment, many countries have turned increasingly to restrictions on imports, or to special subsidies that increase the price competitiveness of their products in international markets. The immediate concerns of policy makers about depressed output and high unemployment have contributed to the diversion of their attention toward trade-distorting policies. These policies are perceived by some as remedies for the economic ills of unemployment and under-utilization of plant and equipment, but at best such policies only mask the symptoms and are likely to be met by offsetting distortions by another country's government.