“Fair Trade for All: How Trade Can Promote Development” is mistitled. The book says a lot about how the authors think developing countries should approach trade negotiations in the World Trade Organization, but says very little about how trade can promote development. Instead, it offers such a long list of cautions about the costs of reducing trade barriers or participating in the WTO system – with almost no mention of the benefits of trade or trade liberalization – that the reader is left with the impression the authors would prefer the status quo than have countries “give up” current government policies that they believe could promote economic development.

Written by Joseph Stiglitz, a Nobel Prize-winning economist from Columbia University and former chief economist of the World Bank, and co-author Andrew Charlton, “Fair Trade for All” (Oxford University Press, 352 pages, $30) argues that developing countries got the short end of the stick in past multilateral trade talks, particularly the Uruguay round that ended in 1994. Developed countries did not reduce their trade barriers and subsidies in agriculture as promised, and high-import tariffs on labor-intensive manufactured goods remain in place.

These views are not altogether controversial among international economists. The question is how to move forward.To remedy past inequities, the authors argue that the current Doha round of trade talks should be “fair” to developing countries. But developing countries, despite the concerns of the authors, seem well positioned to look after their own interests. They have wisened up; the Uruguay round was the first time they were full participants, and now they are more careful about what they will sign.

The WTO is a consensual body in which all participants must agree on the final outcome. If developing countries do not like the way the negotiations are going, they can stop any WTO agreement. As a former director-general of the WTO, New Zealander Mike Moore, has put it, the WTO is like a car with one accelerator and 145 hand brakes. This is one reason why the conclusion of the Doha round, which was launched in 2001, does not appear to be on the horizon.When it is not moving at a snail’s pace, the Doha round of trade talks has been completely stalled.

What would a “fair” and development-friendly agreement look like? To the authors, apparently, it would mean negotiations should essentially accommodate developing countries by not making demands on them or allowing many exceptions to the rules as applied to them, while developed countries open their markets and abolish their subsidies.Yet the authors conclude that “even a development-oriented round of liberalization may fail to produce the growth benefits promised by advocates.” Given this exceedingly pessimistic assessment, why on earth does “Fair Trade for All” put so much stress on the WTO negotiations?

To live up to the promise of the book’s subtitle, Messrs. Stiglitz and Charlton might have discussed things developing countries could do for themselves with respect to trade that would promote development – things they could do now, unilaterally, rather than wait another five to 10 years for an imperfect WTO agreement. Far more important than the WTO are the policies developing countries choose for themselves regarding their own participation in the world economy.

Simply comparing similar countries – Vietnam versus Burma, Bangladesh versus Pakistan, Costa Rica versus Honduras,Uganda versus Zimbabwe – suggests that poor countries that open up to the world economy on their own terms do better than countries that stifle foreign trade and investment. Many countries that have become more open – China comes to mind – have done well even without any special treatment from developed countries under the highly imperfect current trade regime Messrs. Stiglitz and Charlton complain about.

On the fundamental issue of trade liberalization – the reduction of government barriers to trade – economists have a fairly strong basis for believing that developing countries have ample scope for beneficial, unilateral policy reforms.Though it may not be intentional,”Fair Trade for All” reads like a policy brief for inaction and non-liberalization on the part of developing countries. A chapter supposedly on the benefits of trade, for instance, stresses that in developing countries, where markets are imperfect and information is incomplete, public goods are undersupplied and coordination failures are rife.This casts doubt on precisely what sort of policy reforms in the realm of trade the authors would support. Another chapter describes how trade liberalization is

disproportionately costly and difficult for developing countries because of the loss of preference margins, the loss of revenue from trade taxes, institutional weaknesses including the absence of adequate safety nets, large implementation costs, lack of the finance required to restructure the economy, and the limited ability of poor populations to manage short-term unemployment.

These caveats have some merit, but Messrs. Stiglitz and Charlton miss the big picture. They do not discuss the benefits to a China or a Cambodia or a Vietnam or a Chile from having opened up to world markets. These include higher incomes, lower infant mortality, and less child labor, better caloric intakes and lower poverty rates, and a host of others.

Indeed, the story told about trade and trade policy reform is persistently negative, and hence often incomplete and misleading. For example, it is simply irresponsible for economists to state (as they do on page 197) that “the decade following the signing of NAFTA saw real wages in Mexico fall, even as trade increased” – leaving the impression that NAFTA may have been the cause – without at least mentioning the speculative attack on the peso in late 1994 that resulted in a massive devaluation and severe recession.

“Fair Trade for All”is not a fair or balanced assessment of the opportunities and pitfalls of developing country participation in the world trading system. It leaves a one-sided impression that emphasizes the costs of trade to developing countries, and its authors regrettably have missed an excellent opportunity to provide clear and concrete guidance about which direction they would like to see the policies of developing countries go.

Mr. Irwin is professor of economics at Dartmouth College and author of “Free Trade Under Fire” (Princeton University Press).