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{{short description|Economic policy of regulating trade between states through government regulations}}{{redirect|Protectionist}}{{use dmy dates|date=August 2020}}File: Free Trade and Protection.jpg|upright=1.35|thumb|Political poster by the British Liberal Party presenting their view of the differences between an economy based on free tradefree trade(File:Anti Free Trade Postcard From 1910. (Corbis via Getty Images ; Getty Images).webp|upright=1.35|thumb|Anti-free trade postcard from 1910){{trading blocs}}{{economic systems sidebar}}Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. Proponents argue that protectionist policies shield the producers, businesses, and workers of the import-competing sector in the country from foreign competitors and raise government revenue. Opponents argue that protectionist policies reduce trade, and adversely affect consumers in general (by raising the cost of imported goods) as well as the producers and workers in export sectors, both in the country implementing protectionist policies and in the countries against which the protections are implemented.BOOK, A Brief History of Equality, Thomas, Piketty, January 5, 2024, April 19, 2022, Belknap Press,weblink Protectionism has been advocated mainly by parties that hold economic nationalist{{efn|Economic nationalism is an ideology that prioritizes state intervention in the economy, including policies like domestic control and the use of tariffs and restrictions on labor, goods, and capital movement.}} positions, while economically liberal{{efn|Economic liberalism is a political and economic ideology that supports a market economy based on individualism and private property in the means of production.}} political parties generally support free trade.BOOK, Murschetz, Paul, State Aid for Newspapers: Theories, Cases, Actions, Springer Science+Business Media, 2013, 978-3-642-35690-2, 64, Parties of the left in government adopt protectionist policies for ideological reasons and because they wish to save worker jobs. Conversely, right-wing parties are predisposed toward free trade policies., BOOK, Peláez, Carlos, Globalization and the State: Volume II: Trade Agreements, Inequality, the Environment, Financial Globalization, International Law and Vulnerabilities, Palgrave MacMillan, 2008, 978-0-230-20531-4, United States, 68, Left-wing parties tend to support more protectionist policies than right-wing parties., BOOK, Mansfield, Edward, Votes, Vetoes, and the Political Economy of International Trade Agreements, Princeton University Press, 2012, 978-0-691-13530-4, 128, Left-wing governments are considered more likely than others to intervene in the economy and to enact protectionist trade policies., BOOK, Warren, Kenneth, Encyclopedia of U.S. Campaigns, Elections, and Electoral Behavior: A–M, Volume 1, Sage, 2008, 978-1-4129-5489-1, 680, Yet, certain national interests, regional trading blocks, and left-wing anti-globalization forces still favor protectionist practices, making protectionism a continuing issue for both American political parties., NEWS,weblink The End of Reaganism, POLITICO Magazine, 24 March 2017, There is a consensus among economists that protectionism has a negative effect on economic growth and economic welfare,JOURNAL, Fairbrother, Malcolm, 1 March 2014, Economists, Capitalists, and the Making of Globalization: North American Free Trade in Comparative-Historical Perspective, American Journal of Sociology, 119, 5, 1324–1379, 10.1086/675410, 25097930, 38027389, 0002-9602, NEWS,weblink Economic Consensus On Free Trade, 25 May 2017, PIIE, 27 February 2018, en, JOURNAL, Free Trade: Why Are Economists and Noneconomists So Far Apart?, Review, 86, 5, Poole, William, 10.20955/r.86.1-6, 2004, free, while free trade and the reduction of trade barriers have a significantly positive effect on economic growth.Mankiw, N. Gregory (24 April 2015). "Economists Actually Agree on This: The Wisdom of Free Trade" {{Webarchive|url=https://web.archive.org/web/20190514014101weblink |date=14 May 2019 }}. The New York Times. Retrieved 10 August 2021. "Economists are famous for disagreeing with one another.... But economists reach near unanimity on some topics, including international trade."WEB,weblink Free Trade, IGM Forum, 13 March 2012, 24 June 2017, WEB,weblink Import Duties, IGM Forum, 4 October 2016, 24 June 2017, WEB,weblink Trade Within Europe, IGM Forum, 24 June 2017, Poole, William (September/October 2004). "Free Trade: Why Are Economists and Noneconomists So Far Apart" {{Webarchive|url=https://web.archive.org/web/20171107004118weblink |date=7 November 2017 }}. Federal Reserve Bank of St. Louis Review. 86 (5): pp. 1–6. "... most observers agree that '[t]he consensus among mainstream economists on the desirability of free trade remains almost universal.'" Quote at p. 1. Some scholars, such as Douglas Irwin, have implicated protectionism as the cause of some economic crises, most notably the Great Depression.BOOK, Peddling Protectionism: Smoot-Hawley and the Great Depression, Irwin, Douglas, Princeton University Press, 2017,weblink vii–xviii, 978-1-4008-8842-9, Although trade liberalization can sometimes result in large and unequally distributed losses and gains, and can, in the short run, cause significant economic dislocation of workers in import-competing sectors,JOURNAL, Free Trade: Why Are Economists and Noneconomists So Far Apart?, Review, 86, 5, Poole, William, One set of reservations concerns distributional effects of trade. Workers are not seen as benefiting from trade. Strong evidence exists indicating a perception that the benefits of trade flow to businesses and the wealthy, rather than to workers, and to those abroad rather than to those in the United States., 10.20955/r.86.1-6, 2004, free, JOURNAL, Ping, Xiong, Patents in TRIPS-Plus Provisions and the Approaches to Interpretation of Free Trade Agreements and TRIPS: Do They Affect Public Health?, 2012b, 46, 1, Journal of World Trade, 155, 10.54648/TRAD2012006, free trade often lowers the costs of goods and services for both producers and consumers.NEWS, Rosenfeld, Everett, 11 March 2016, Here's why everyone is arguing about free trade,weblink 10 August 2021, CNBC,

Protectionist policies

(File:Emblem of the Ligue Nationale pour la Défense du Franc.svg|thumb|Logo of Belgium's National League for the Franc's Defense, 1924)A variety of policies have been used to achieve protectionist goals. These include:

• Tariffs and import quotas are the most common types of protectionist policies.Paul Krugman, Robin Wells & Martha L. Olney, Essentials of Economics (Worth Publishers, 2007), pp. 342–345. A tariff is an excise tax levied on imported goods. Originally imposed to raise government revenue, modern tariffs are now used primarily to protect domestic producers and wage rates from lower-priced importers. An import quota is a limit on the volume of a good that may be legally imported, usually established through an import licensing regime.
• Protection of technologies, patents, technical and scientific knowledge WEB,weblink China Seen in Push to Gain Technology Insights, Edward, Wong, Didi Kirsten, Tatlow, 5 June 2013, 16 October 2017, The New York Times, WEB,weblink China's Intelligent Weaponry Gets Smarter, John, Markoff, Matthew, Rosenberg, 3 February 2017, The New York Times, 16 October 2017, WEB,weblink The Unpleasant Truth About Chinese Espionage, 22 April 2016, Observer.com, 16 October 2017,
• Restrictions on foreign direct investment,Ippei Yamazawa, "Restructuring the Japanese Economy: Policies and Performance" in Global Protectionism (eds. Robert C. Hine, Anthony P. O'Brien, David Greenaway & Robert J. Thornton: St. Martin's Press, 1991), pp. 55–56. such as restrictions on the acquisition of domestic firms by foreign investors.Crispin Weymouth, "Is 'Protectionism' a Useful Concept for Company Law and Foreign Investment Policy? An EU Perspective" in Company Law and Economic Protectionism: New Challenges to European Integration (eds. Ulf Bernitz & Wolf-Georg Ringe: Oxford University Press, 2010), pp. 44–76.
• Administrative barriers: Countries are sometimes accused of using their various administrative rules (e.g., regarding food safety, environmental standards, electrical safety, etc.) as a way to introduce barriers to imports.
• Anti-dumping legislation: "Dumping" is the practice of firms selling to export markets at lower prices than are charged in domestic markets. Supporters of anti-dumping laws argue that they prevent the import of cheaper foreign goods that would cause local firms to close down. However, in practice, anti-dumping laws are usually used to impose trade tariffs on foreign exporters.
• Direct subsidies: Government subsidies (in the form of lump-sum payments or cheap loans) are sometimes given to local firms that cannot compete well against imports. These subsidies are purported to "protect" local jobs and to help local firms adjust to the world markets.
• Export subsidies: Export subsidies are often used by governments to increase exports. Export subsidies have the opposite effect of export tariffs because exporters get payment, which is a percentage or proportion of the value of exported. Export subsidies increase the amount of trade, and in a country with floating exchange rates, have effects similar to import subsidies.
• Exchange rate control: A government may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, leading to an improvement in its trade balance. However, such a policy is only effective in the short run, as it will lead to higher inflation in the country in the long run, which will, in turn, raise the real cost of exports, and reduce the relative price of imports.
• International patent systems: There is an argument for viewing national patent systems as a cloak for protectionist trade policies at a national level. Two strands of this argument exist: one when patents held by one country form part of a system of exploitable relative advantage in trade negotiations against another, and a second where adhering to a worldwide system of patents confers "good citizenship" status despite 'de facto protectionism'. Peter Drahos explains that "States realized that patent systems could be used to cloak protectionist strategies. There were also reputational advantages for states to be seen to be sticking to intellectual property systems. One could attend the various revisions of the Paris and Berne conventions, participate in the cosmopolitan moral dialogue about the need to protect the fruits of authorial labor and inventive genius...knowing all the while that one's domestic intellectual property system was a handy protectionist weapon."BOOK, Information Feudalism: Who Owns the Knowledge Economy?, 2002, Earthscan, London, 978-1-85383-917-7, 36,weblink Peter Drahos, John Braithwaite,
• Political campaigns advocating domestic consumption (e.g. the "Buy American" campaign in the United States, which could be seen as an extra-legal promotion of protectionism.)
• Preferential governmental spending, such as the Buy American Act, federal legislation which called upon the United States government to prefer US-made products in its purchases.

In the modern trade arena, many other initiatives besides tariffs have been called protectionist. For example, some commentators, such as Jagdish Bhagwati, see developed countries' efforts in imposing their own labor or environmental standards as protectionism. Also, the imposition of restrictive certification procedures on imports is seen in this light.Further, others point out that free trade agreements often have protectionist provisions such as intellectual property, copyright, and patent restrictions that benefit large corporations. These provisions restrict trade in music, movies, pharmaceuticals, software, and other manufactured items to high-cost producers with quotas from low-cost producers set to zero.weblink {{webarchive|url=https://web.archive.org/web/20061017061845weblink|date=17 October 2006}}

History

(File:Tariff Rates in Japan (1870-1960).gif|thumb|Tariff Rates in Japan (1870–1960))(File:Tariff Rates in Spain and Italy (1860-1910).gif|thumb|Tariff Rates in Spain and Italy (1860–1910))In the 18th century, Adam Smith famously warned against the "interested sophistry" of industry, seeking to gain an advantage at the cost of the consumers.Free to Choose, Milton Friedman Friedrich List saw Adam Smith's views on free trade as disingenuous, believing that Smith advocated for free trade so that British industry could lock out underdeveloped foreign competition.The National System of Political Economy, by Friedrich List, 1841, translated by Sampson S. Lloyd M.P., 1885 edition, Fourth Book, "The Politics", Chapter 33.Some have argued that no major country has ever successfully industrialized without some form of economic protection.JOURNAL, Shafaeddin, Mehdi, 1998, How did Developed Countries Industrialize? The History of Trade and Industrial Policy: the Cases of Great Britain and the USA, United Nations Conference on Trade and Development, BOOK, How Rich Countries got Rich and Why Poor Countries Stay Poor, Reinert, Eric, Carroll & Graf, 2007, New York, Economic historian Paul Bairoch wrote that "historically, free trade is the exception and protectionism the rule".BOOK, Trade Policy and Economic Development, 978-0-7748-0894-1, A Trading Nation: Canadian Trade Policy from Colonialism to Globalization, According to economic historians Douglas Irwin and Kevin O'Rourke, "shocks that emanate from brief financial crises tend to be transitory and have a little long-run effect on trade policy, whereas those that play out over longer periods (the early 1890s, early 1930s) may give rise to protectionism that is difficult to reverse. Regional wars also produce transitory shocks that have little impact on long-run trade policy, while global wars give rise to extensive government trade restrictions that can be difficult to reverse."JOURNAL, C, Feenstra, Robert, M, Taylor, Alan, 23 December 2013, Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century,weblink NBER, 10.7208/chicago/9780226030890.001.0001, 978-0-226-03075-3, One study shows that sudden shifts in comparative advantage for specific countries have led some countries to become protectionist: "The shift in comparative advantage associated with the opening up of New World frontiers, and the subsequent "grain invasion" of Europe, led to higher agricultural tariffs from the late 1870s onwards, which as we have seen reversed the move toward freer trade that had characterized mid-nineteenth-century Europe. In the decades after World War II, Japan's rapid rise led to trade friction with other countries. Japan's recovery was accompanied by a sharp increase in its exports of certain product categories: cotton textiles in the 1950s, steel in the 1960s, automobiles in the 1970s, and electronics in the 1980s. In each case, the rapid expansion in Japan's exports created difficulties for its trading partners and the use of protectionism as a shock absorber."

In the United States

(File:Droits de douane (France, UK, US).png|thumb|Tariff rates (France, UK, and US))(File:Average Tariff Rates in USA (1821-2016).png|thumb|Average tariff rates in US (1821–2016))(File:U.S Trade Balance (1895-2015).png|thumb|US trade balance (1895–2015))According to economic historian Douglas Irwin, a common myth about US trade policy is that low tariffs harmed American manufacturers in the early 19th century and then that high tariffs made the United States into a great industrial power in the late 19th century.NEWS,weblink A historian on the myths of American trade, The Economist, 26 November 2017, en, A review by The Economist of Irwin's 2017 book Clashing over Commerce: A History of US Trade Policy states:Political dynamics would lead people to see a link between tariffs and the economic cycle that was not there. A boom would generate enough revenue for tariffs to fall, and when the bust came pressure would build to raise them again. By the time that happened, the economy would be recovering, giving the impression that tariff cuts caused the crash and the reverse generated the recovery. 'Mr. Irwin' also attempts to debunk the idea that protectionism made America a great industrial power, a notion believed by some to offer lessons for developing countries today. As its share of global manufacturing powered from 23% in 1870 to 36% in 1913, the admittedly high tariffs of the time came with a cost, estimated at around 0.5% of GDP in the mid-1870s. In some industries, they might have sped up development by a few years. But American growth during its protectionist period was more to do with its abundant resources and openness to people and ideas.According to Irwin, tariffs have served three primary purposes in the United States: "to raise revenue for the government, to restrict imports and protect domestic producers from foreign competition, and to reach reciprocity agreements that reduce trade barriers."JOURNAL, Irwin, Douglas A., 2 August 2020, Trade Policy in American Economic History,weblink Annual Review of Economics, en, 12, 1, 23–44, 10.1146/annurev-economics-070119-024409, 241740782, 1941-1383, From 1790 to 1860, average tariffs increased from 20 percent to 60 percent before declining again to 20 percent. From 1861 to 1933, which Irwin characterizes as the "restriction period", the average tariffs increased to 50 percent and remained at that level for several decades. From 1934 onwards, which Irwin characterizes as the "reciprocity period", the average tariff declined substantially until it leveled off at 5 percent.Economist Paul Bairoch documented that the United States imposed among the highest rates in the world from around the founding of the country until the World War II period, describing the United States as "the mother country and bastion of modern protectionism" since the end of the 18th century and until the post-World War II period.BOOK, Economics and World History: Myths and Paradoxes, Paul Bairoch, University of Chicago Press, 1995,weblink 31–32, Paul Bairoch, 16 August 2017, 12 October 2017,weblink dead, Alexander Hamilton, the first United States Secretary of the Treasury, was of the view, as articulated most famously in his "Report on Manufactures", that developing an industrialized economy was impossible without protectionism because import duties are necessary to shelter domestic "infant industries" until they could achieve economies of scale.BOOK, Economics and World History: Myths and Paradoxes, Paul Bairoch, University of Chicago Press, 1995, 33, The industrial takeoff of the United States occurred under protectionist policies 1816–1848 and under moderate protectionism 1846–1861, and continued under strict protectionist policies 1861–1945.BOOK, Economics and World History: Myths and Paradoxes, Paul Bairoch, University of Chicago Press, 1995, 34, In the late 19th century, higher tariffs were introduced on the grounds that they were needed to protect American wages and to protect American farmers.BOOK, Economics and World History: Myths and Paradoxes, Paul Bairoch, University of Chicago Press, 1995, 36, Between 1824 and the 1940s, the U.S. imposed much higher average tariff rates on manufactured products than did Britain or any other European country, with the exception for a period of time of Spain and Russia.BOOK, Economics and World History: Myths and Paradoxes, Paul Bairoch, University of Chicago Press, 1995, 34, 40, Up until the end of World War II, the United States had the most protectionist economy on Earth.BOOK, Santosh Mehrotra, Sylvie Guichard, Planning in the 20th Century and Beyond: India's Planning Commission and the NITI Aayog,weblink 2020, Cambridge University Press, 978-1-108-49462-5, 285, Most importantly, the United States was the birthplace of the idea of infant industry protection, and indeed was the most heavily protected economy in the world for about a century, until the Second World War, The Bush administration implemented tariffs on Chinese steel in 2002; according to a 2005 review of existing research on the tariff, all studies found that the tariffs caused more harm than gains to the US economy and employment.JOURNAL, Read, Robert, 1 August 2005, The Political Economy of Trade Protection: The Determinants and Welfare Impact of the 2002 US Emergency Steel Safeguard Measures, World Economy, en, 28, 8, 1119–1137, 10.1111/j.1467-9701.2005.00722.x, 154520390, 1467-9701,weblink The Obama administration implemented tariffs on Chinese tires between 2009 and 2012 as an anti-dumping measure; a 2016 study found that these tariffs had no impact on employment and wages in the US tire industry.JOURNAL, 1 June 2016, Did China tire safeguard save U.S. workers?, European Economic Review, en, 85, 22–38, 10.1016/j.euroecorev.2015.12.009, 0014-2921, Chung, Sunghoon, Lee, Joonhyung, Osang, Thomas,weblink In 2018, EU Trade Commissioner Cecilia Malmström stated that the US was "playing a dangerous game" in applying tariffs on steel and aluminum imports from most countries and stated that she saw the Trump administration's decision to do so as both "pure protectionist" and "illegal".WEB,weblink Why American allies are angry, Gulfnews.com, 4 June 2018, The tariffs imposed by the Trump administration during the China–United States trade war led to a reduction in the United States trade deficit with China.WEB,weblink Foreign Trade – U.S. Trade with China, United States Census Bureau,

Europe

In the United Kingdom

{{See also|British Empire}}Great Britain, and England in particular, became one of the most prosperous economic regions in the world between the late 1600s and early 1800s as a result of being the birthplace of the industrial revolution that began in the mid-eighteenth century.BOOK, Baten, Jörg, A History of the Global Economy. From 1500 to the Present., 2016, Cambridge University Press, 13, 978-1-107-50718-0, The government protected its merchants—and kept others out—by trade barriers, regulations, and subsidies to domestic industries in order to maximize exports from and minimize imports to the realm. The Navigation Acts of the late 17th century required all trade to be carried in English ships, manned by English crews (this later encompassed all Britons after the Acts of Union 1707 united Scotland with England).Darwin, 2012 pp. 21–22 Colonists were required to send their produce and raw materials first of all to Britain, where the surplus was then sold-on by British merchants to other colonies in the British empire or bullion-earning external markets. The colonies were forbidden to trade directly with other nations or rival empires. The goal was to maintain the North American and Caribbean colonies as dependent agricultural economies geared towards producing raw materials for export to Britain. The growth of native industry was discouraged, in order to keep the colonies dependent on the United Kingdom for their finished goods.Darwin, 2012 p. 166BOOK, Max Savelle, Seeds of Liberty: The Genesis of the American Mind,weblink 1948, 204ff, Kessinger, 978-1-4191-0707-8, From 1815 to 1870, the United Kingdom reaped the benefits of being the world's first modern, industrialised nation. It described itself as "the workshop of the world", meaning that its finished goods were produced so efficiently and cheaply that they could often undersell comparable, locally manufactured goods in almost any other market.Harold Cox, ed., British industries under free trade (1903) pp, 17–18. By the 1840s, the United Kingdom had adopted a free-trade policy, meaning open markets and no tariffs throughout the empire.JOURNAL, Lynn, Martin, 1999, British Policy, Trade, and Informal Empire in the Mid-19th Century, Andrew, Porter, The Oxford History of the British Empire: Volume III: The Nineteenth Century, 3, 101–121, 10.1093/acprof:oso/9780198205654.003.0006, The Corn Laws were tariffs and other trade restrictions on imported food and corn enforced in the United Kingdom between 1815 and 1846, and enhanced the profits and political power associated with land ownership. The laws raised food prices and the costs of living for the British public, and hampered the growth of other British economic sectors, such as manufacturing, by reducing the disposable income of the British public.JOURNAL, Williamson, Jeffrey G, 1990-04-01, The impact of the Corn Laws just prior to repeal, Explorations in Economic History, 27, 2, 123–156, 10.1016/0014-4983(90)90007-L, The Prime Minister, Sir Robert Peel, a Conservative, achieved repeal in 1846 with the support of the Whigs in Parliament, overcoming the opposition of most of his own party.The possessions of the East India Company in India, known as British India, was the centrepiece of the British Empire, and because of an efficient taxation system it paid its own administrative expenses as well as the cost of the large British Indian Army. In terms of trade, India turned only a small profit for British business.P. J. Cain and A. G. Hopkins, British Imperialism: 1688–2000 (2nd ed. 2002) ch. 10 However, transfers to the British government was massive: in 1801 unrequited (unpaid, or paid from Indian-collected revenue) was about 30% of British domestic savings available for capital formation in the United Kingdon.JOURNAL, Mukherjee, Aditya, Empire: How Colonial India Made Modern Britain, Economic and Political Weekly, 2010, 45, 50, 73–82, 25764217, BOOK, Habib, Irfan, Essays in Indian History, 1995, Tulika Press, New Delhi, 304–46, Colonisation of the Indian Economy, By the late nineteenth century, the United Kingdom was the quintessential free-trade country. However, that did not mean that it was unaffected by foreign tariffs, especially those of the United States under the McKinley Tariff and Dingley Tariff.JOURNAL, Varian, Brian D., 2018, Anglo-American trade costs during the first era of globalization: the contribution of a bilateral tariff series†,weblink The Economic History Review, en, 71, 1, 190–212, 10.1111/ehr.12486, 157711310, 0013-0117, Economic historian Brian Varian estimated that, but for the protectionism in british overseas markets, the United Kingdom exports would have been 57% higher in 1902.JOURNAL, Varian, Brian D., 2023, British exports and foreign tariffs: Insights from the Board of Trade's foreign tariff compilation for 1902,weblink The Economic History Review, en, 76, 3, 827–843, 10.1111/ehr.13214, 253165902, 0013-0117, By the interwar era, the United Kingdom began to drift away from free trade. There was a piecemeal erosion of free trade in the 1920s, including under the system of so-called safeguarding duties.JOURNAL, Varian, Brian D., 2019, The growth of manufacturing protection in 1920s Britain,weblink Scottish Journal of Political Economy, en, 66, 5, 703–711, 10.1111/sjpe.12223, 159346581, 0036-9292, JOURNAL, Varian, Brian D., 2022-08-18, Protection and the British rayon industry during the 1920s,weblink Business History, en, 64, 6, 1131–1148, 10.1080/00076791.2020.1753699, 219025238, 0007-6791, JOURNAL, Foreman-Peck, James, 1979, Tariff Protection and Economies of Scale: The British Motor Industry Before 1939,weblink 2024-01-06, Oxford Economic Papers, 31, 2, 237–257, 10.1093/oxfordjournals.oep.a041444, Then, with the Import Duties Act of 1932, the United Kingdom moved in a decisively protectionist direction.JOURNAL, de Bromhead, Alan, Fernihough, Alan, Lampe, Markus, O’Rourke, Kevin Hjortshøj, 2019-02-01, When Britain Turned Inward: The Impact of Interwar British Protection,weblink American Economic Review, en, 109, 2, 325–352, 10.1257/aer.20172020, 0002-8282, BOOK, Capie, Forrest, Depression and protectionism: Britain between the wars, 2011, Routledge, 978-0-415-60704-9, London,

In continental Europe

Europe became increasingly protectionist during the eighteenth century.BOOK,weblink Power and Plenty, 2009, Princeton University Press, 16 October 2017, 978-0-691-14327-9, Findlay, Ronald, O'Rourke, Kevin H., Economic historians Findlay and O'Rourke write that in "the immediate aftermath of the Napoleonic Wars, European trade policies were almost universally protectionist", with the exceptions being smaller countries such as the Netherlands and Denmark.Europe increasingly liberalized its trade during the 19th century. Countries such as the Netherlands, Denmark, Portugal and Switzerland, and arguably Sweden and Belgium, had fully moved towards free trade prior to 1860. Economic historians see the repeal of the Corn Laws in 1846 as the decisive shift toward free trade in Britain.BOOK,weblink 7 – Trade: discovery, mercantilism and technology, The Cambridge Economic History of Modern Britain, Cambridge University, en, 27 June 2017, 10.1017/CHOL9780521820363.008, 978-1-139-05385-3, 2004, Harley, C. Knick, 175–203, A 1990 study by the Harvard economic historian Jeffrey Williamson showed that the Corn Laws (which imposed restrictions and tariffs on imported grain) substantially increased the cost of living for British workers, and hampered the British manufacturing sector by reducing the disposable incomes that British workers could have spent on manufactured goods.JOURNAL, Williamson, Jeffrey G, Jeffrey G. Williamson, 1 April 1990, The impact of the Corn Laws just prior to repeal, Explorations in Economic History, 27, 2, 123–156, 10.1016/0014-4983(90)90007-L, The shift towards liberalization in Britain occurred in part due to "the influence of economists like David Ricardo", but also due to "the growing power of urban interests".JOURNAL, Ronald, Findlay, O'Rourke, Kevin H., 1 January 2003, Commodity Market Integration, 1500–2000,weblink NBER, 13–64, Findlay and O'Rourke characterize 1860 Cobden Chevalier treaty between France and the United Kingdom as "a decisive shift toward European free trade." This treaty was followed by numerous free trade agreements: "France and Belgium signed a treaty in 1861; a Franco-Prussian treaty was signed in 1862; Italy entered the "network of Cobden-Chevalier treaties" in 1863 (Bairoch 1989, 40); Switzerland in 1864; Sweden, Norway, Spain, the Netherlands, and the Hanseatic towns in 1865; and Austria in 1866. By 1877, less than two decades after the Cobden Chevalier treaty and three decades after British Repeal, Germany "had virtually become a free trade country" (Bairoch, 41). Average duties on manufactured products had declined to 9–12% on the Continent, a far cry from the 50% British tariffs, and numerous prohibitions elsewhere, of the immediate post-Waterloo era (Bairoch, table 3, p. 6, and table 5, p. 42)."Some European powers did not liberalize during the 19th century, such as the Russian Empire and Austro-Hungarian Empire which remained highly protectionist. The Ottoman Empire also became increasingly protectionist.JOURNAL, Daudin, Guillaume, O’Rourke, Kevin H., Escosura, Leandro Prados de la, 2008, Trade and Empire, 1700–1870, Documents de Travail de l'Ofce,weblink In the Ottoman Empire's case, however, it previously had liberal free trade policies during the 18th to early 19th centuries, which British prime minister Benjamin Disraeli cited as "an instance of the injury done by unrestrained competition" in the 1846 Corn Laws debate, arguing that it destroyed what had been "some of the finest manufacturers of the world" in 1812.The countries of Western Europe began to steadily liberalize their economies after World War II and the protectionism of the interwar period, but John Tsang, then Hong Kong's Secretary for Commerce, Industry and Technology and chair of the Sixth Ministerial Conference of the World Trade Organization, MC6, commented in 2005 that the EU spent around €70 billion per year on "trade-distorting support".Tsang, J., "Towards a Brighter Future in Trade and World Development", Hong Kong Industrialist, 2005/12, p. 28

In Canada

Since 1971 Canada has protected producers of eggs, milk, cheese, chicken, and turkey with a system of supply management. Though prices for these foods in Canada exceed global prices, the farmers and processors have had the security of a stable market to finance their operations.{{Citation needed|date=May 2021}} Doubts about the safety of bovine growth hormone, sometimes used to boost dairy production, led to hearings before the Senate of Canada, resulting in a ban in Canada. Thus, supply management of milk products is consumer protection of Canadians.Richard Wolfson (1999) How Bovine Growth Hormone Was Rejected in Canada {{Webarchive|url=https://web.archive.org/web/20230107190727weblink |date=7 January 2023 }}, from Consumerhealth.org 22(9)

In Latin America

{{See also|Economic history of Argentina}}Most Latin American countries gained independence in the early 19th century, with notable exceptions including Spanish Cuba and Spanish Puerto Rico. Following the achievement of their independence, most of the Latin American countries adopted protectionism. They both feared that any foreign competition would stomp out their newly created state and believed that lack of outside resources would drive domestic production.NEWS, Gallas, Daniel, The Country Built on Trade Barriers, BBC News, August 2018,weblink 10 November 2021, The protectionist behavior continued up until and during the World Wars. During World War 2, Latin America had, on average, the highest tariffs in the world.JOURNAL, Coatsworth, John, Williamson, Jeffrey, THE ROOTS OF LATIN AMERICAN PROTECTIONISM: LOOKING BEFORE THE GREAT DEPRESSION, NBER Working Paper Series, June 2002, WEB, Mercosur in Brief,weblink mercosur,

Argentina

Juan Perón erected a system of almost complete protectionism against imports, largely cutting off Argentina from the international market in the 1940s. Protectionism created a domestically oriented industry with high production costs, incapable of competing in international markets. At the same time, output of beef and grain, the country's main export goods, stagnated.WEB, Argentina Trade Policy, Commanding Heights: The Battle For The World Economy, PBS,weblinkweblink" title="web.archive.org/web/20110426054555weblink">weblink 2011-04-26, dead, The IAPI began shortchanging growers and, when world grain prices dropped in the late 1940s, it stifled agricultural production, exports and business sentiment, in general.NEWS, Antonio Cafiero, Intimidaciones, boicots y calidad institucional, Página/12, 2008-05-07,weblinkweblink" title="web.archive.org/web/20120211073528weblink">weblink 2012-02-11, dead, Despite these shortcomings, protectionism and government credits did allow an exponential growth of the internal market: radio sales increased 600% and fridge sales grew 218%, among others.BOOK, Pablo Gerchunoff, Peronist Economic Policies, 1946–1955, di Tella y Dornbusch, 59–85, 1989, During this period Argentina's economy continued to grow, on average, but more slowly than the world as a whole or than its neighbors, Brazil and Chile. By 1950, Argentina's GDP per capita accounted fell to less than half of that of the United States.WEB, Arnaut, Javier, Understanding the Latin American Gap during the era of Import Substitution: Institutions, Productivity, and Distance to the Technology Frontier in Brazil, Argentina and Mexico's Manufacturing Industries, 1935–1975,weblinkweblink" title="web.archive.org/web/20120426051927weblink">weblink 2012-04-26, dead,

Impact

There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth.See P. Krugman, "The Narrow and Broad Arguments for Free Trade", American Economic Review, Papers and Proceedings, 83(3), 1993 ; and P. Krugman, Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations, New York, W.W. Norton & Company, 1994.William Poole, Free Trade: Why Are Economists and Noneconomists So Far Apart {{Webarchive|url=https://web.archive.org/web/20171207055442weblink |date=7 December 2017 }}, Federal Reserve Bank of St. Louis Review, September/October 2004, 86(5), pp. 1: "most observers agree that '[t]he consensus among mainstream economists on the desirability of free trade remains almost universal.'"WEB,weblink Trade Within Europe {{!, IGM Forum|website=Igmchicago.org|language=en-US|access-date=24 June 2017}}JOURNAL, Panagariya, Arvind, 2019-07-18, Debunking Protectionist Myths: Free Trade, the Developing World, and Prosperity,weblink Cato Institute Economic Development Bulletin, en, 31, 3501729, However, protectionism can be used to raise government revenue and enable access to intellectual property, including essential medicines.BOOK, The Divide: A Brief Guide to Global Inequality and its Solutions, Hickel, Jason, 2018, Windmill Books, 978-1786090034, Protectionism is frequently criticized by economists as harming the people it is intended to help. Mainstream economists instead support free trade.JOURNAL, Krugman, Paul R., 1987, Is Free Trade Passe?, The Journal of Economic Perspectives, 1, 2, 131–44, 10.1257/jep.1.2.131, 1942985, free, The principle of comparative advantage shows that the gains from free trade outweigh any losses as free trade creates more jobs than it destroys because it allows countries to specialize in the production of goods and services in which they have a comparative advantage.Krugman, Paul (24 January 1997). The Accidental Theorist {{Webarchive|url=https://web.archive.org/web/20110920030311weblink |date=20 September 2011 }}. Slate. Protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit, unlike in a free market, where there is no such total loss. Economist Stephen P. Magee claims the benefits of free trade outweigh the losses by as much as 100 to 1.BOOK, International Trade and Distortions In Factor Markets, Magee, Stephen P., Marcel-Dekker, 1976, New York,

Armed conflicts

{{See also|Opium Wars}}(File:Opium imports into China 1650-1880 EN.svg|thumb|upright=1.7|Graph showing the increase in Chinese opium imports by year.)Protectionism has been accused of being one of the major causes of war. Proponents of this theory point to the constant warfare in the 17th and 18th centuries among European countries whose governments were predominantly mercantilist and protectionist, the American Revolution, which came about ostensibly due to British tariffs and taxes. According to a slogan of Frédéric Bastiat (1801–1850), "When goods cannot cross borders, armies will."DiLorenzo, T. J., Frederic Bastiat (1801–1850): Between the French and Marginalist Revolutions. accessed at [Ludwig Von Mises Institute] 2012-04-13 {{Webarchive|url=https://web.archive.org/web/20140913235907weblink |date=13 September 2014 }}On the other hand, archaeologist Lawrence H. Keeley argues in his book War Before Civilization that disputes between trading partners escalate to war more frequently than disputes between nations that don't trade much with each other.BOOK, War Before Civilization: The Myth of the Peaceful Savage Reprint Edition, Lawrence, Keeley, 6 February 1996, Oxford University Press, USA, 0195119126, The Opium Wars were fought between the UK{{efn|France also fought on the side of the UK in the Second Opium War.}} and China over the right of British merchants to engage in the free trade of opium. For many opium users, what started as recreation soon became a punishing addiction: many people who stopped ingesting opium suffered chills, nausea, and cramps, and sometimes died from withdrawal. Once addicted, people would often do almost anything to continue to get access to the drug.WEB,weblink The Opium Wars in China, Asia Pacific Foundation of, Canada, Asia Pacific Curriculum, Barbara Tuchman says both European intellectuals and leaders overestimated the power of free trade on the eve of World War I. They believed that the interconnectedness of European nations through trade would stop a continent-wide war from breaking out, as the economic consequences would be too great. However, the assumption proved incorrect. For example, Tuchman noted that Helmuth von Moltke the Younger, when warned of such consequences, refused to even consider them in his plans, arguing he was a "soldier," not an "economist."NEWS, Yardley, Jonathan, Jonathan Yardley, Jonathan Yardley Reviews 'The Proud Tower,' by Barbara Tuchman,weblink The Washington Post, March 16, 2009, The ongoing Russo-Ukraine War began in the aftermath of the Revolution of Dignity and the signing of the European Union–Ukraine Association Agreement in 2014, which included a Deep and Comprehensive Free Trade Area for Ukraine and the European Union (EU).WEB,weblink Ukraine suspends talks on EU trade pact as Putin wins tug of war: Ukraine was due to sign accord at summit next week but MPs reject key bills, especially on freeing Yulia Tymoshenko from jail, Ian, Traynor, Oksana, Grytsenko, 21 November 2013, The Guardian,

Positive impacts

Intellectual property

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards for the regulation by national governments of different forms of intellectual property (IP) as applied to nationals of other WTO member nations.See TRIPS Art. 1(3). TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT){{efn|The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis."}} between 1989 and 1990BOOK, The TRIPS Agreement: Negotiating History, Gervais, Daniel, Sweet & Maxwell, 2012, London, Part I, and is administered by the WTO. Statements by the World Bank indicate that TRIPS has not led to a demonstrable acceleration of investment to low-income countries, though it may have done so for middle-income countries.JOURNAL, Ping, Xiong, Patents in TRIPS-Plus Provisions and the Approaches to Interpretation of Free Trade Agreements and TRIPS: Do They Affect Public Health?, 2012b, 46, 1, Journal of World Trade, 155, 10.54648/TRAD2012006, Statements by the World Bank indicate that TRIPS has not led to a demonstrable acceleration of investment to low-income countries, though it may have done so for middle-income countries.JOURNAL, Ping, Xiong, Patents in TRIPS-Plus Provisions and the Approaches to Interpretation of Free Trade Agreements and TRIPS: Do They Affect Public Health?, 2012b, 46, 1, Journal of World Trade, 155, 10.54648/TRAD2012006, Critics argue that TRIPS limits the ability of governments to introduce competition for generic producers.BOOK, Richard, Newfarmer, Trade, Doha, and Development, The World Bank, 1st, 2006, 292, The TRIPS agreement allows the grant of compulsory licenses at a nation's discretion. TRIPS-plus conditions in the United States' FTAs with Australia, Jordan, Singapore and Vietnam have restricted the application of compulsory licenses to emergency situations, antitrust remedies, and cases of public non-commercial use.

Access to essential medicines

One of the most visible conflicts over TRIPS has been AIDS drugs in Africa. Despite the role that patents have played in maintaining higher drug costs for public health programs across Africa, this controversy has not led to a revision of TRIPS. Instead, an interpretive statement, the Doha Declaration, was issued in November 2001, which indicated that TRIPS should not prevent states from dealing with public health crises and allowed for compulsory licenses. After Doha, PhRMA, the United States and to a lesser extent other developed nations began working to minimize the effect of the declaration.JOURNAL, Timmermann, Cristian, Henk van den Belt, 2013, Intellectual property and global health: from corporate social responsibility to the access to knowledge movement, Liverpool Law Review, 34, 1, 47–73, 10.1007/s10991-013-9129-9, 145492036,weblink 31 October 2020, 23 June 2020,weblink live, In 2020, conflicts re-emerged over patents, copyrights and trade secrets related to COVID-19 vaccines, diagnostics and treatments. South Africa and India proposed that WTO grant a temporary waiver to enable more widespread production of the vaccines, since suppressing the virus as quickly as possible benefits the entire world.NEWS, Nebehay, Emma Farge, Stephanie, 2020-12-10, WTO delays decision on waiver on COVID-19 drug, vaccine rights, en, Reuters,weblink 2021-02-25, 28 February 2021,weblink live, WEB, Members to continue discussion on proposal for temporary IP waiver in response to COVID-19,weblink 2021-02-25, World Trade Organisation, en, 27 February 2021,weblink live, The waivers would be in addition to the existing, but cumbersome, flexibilities in TRIPS allowing countries to impose compulsory licenses.WEB, Baker, Brook K., Labonte, Ronald, Dummy's guide to how trade rules affect access to COVID-19 vaccines,weblink 2021-02-25, The Conversation, 9 January 2021, en, 23 February 2021,weblink live, WEB, 2020-12-16, An Unnecessary Proposal: A WTO Waiver of Intellectual Property Rights for COVID-19 Vaccines,weblink 2021-02-25, Cato Institute, en, 25 February 2021,weblink live, Over 100 developing nations supported the waiver but it was blocked by the G7 members.WEB,weblink G7 leaders are shooting themselves in the foot by failing to tackle global vaccine access, Amnesty International, 2021-02-19, 2021-04-25, This blocking was condemned by 400 organizations including Doctors Without Borders and 115 members of the European Parliament.WEB,weblink Patently unfair: Can waivers help solve COVID vaccine inequality?, Virginia, Pietromarchi, Al Jazeera, 2021-03-01, 2021-04-26, In June 2022, after extensive involvement of the European Union, the WTO instead adopted a watered-down agreement that focuses only on vaccine patents, excludes high-income countries and China, and contains few provisions that are not covered by existing flexibilities.WEB, TRIPS Waiver {{!, Covid-19 Response |url=https://covid19response.org/trips-waiver/ |website=covid19response.org}}WEB, WTO finally agrees on a TRIPS deal. But not everyone is happy,weblink Devex, en, 17 June 2022,

Government Revenue

Proponents of protectionism argue that tariffs raise government revenue via customs. Developing countries, including least developed countries (LDCs), often do not collect income taxes because personal incomes are often too low to tax and they lack the capability to collect such taxes from individuals.WEB,weblink The Least Developed Countries Report 2022, United Nations Conference on Trade and Development, January 5, 2023, ">

United States{| class"toccolours mw-collapsible mw-collapsed" align"right" cellpadding"1" cellspacing"1" style"margin:0 0 1em 1em; font-size: 95%;"

! colspan=7 bgcolor="#ccccff" align="center"|U.S. Historical Tariffs (Customs)and Tax Collections by the Federal Government

{{center|(All dollar amounts are in millions of U.S. dollars)}}

!align=“right”|Year||TariffIncome||Budget% Tariff||FederalReceipts||IncomeTax||Payroll Tax||AverageTariff!align="right"|1792

				|15.1%

!align="right"|1795

				|8.0%

!align="right"|1800

				|10.0%

!align="right"|1805

				|10.7%

!align="right"|1810

				|10.1%

!align="right"|1815

				|6.5%

!align="right"|1820

				|20.2%

!align="right"|1825

				|22.3%

!align="right"|1830

				|35.0%

!align="right"|1835

				|14.2%

!align="right"|1840

				|12.7%

!align="right"|1845

				|24.3%

!align="right"|1850

				|22.9%

!align="right"|1855

				|20.6%

|||||||||| ||!align="right"|1860

				|15.0%

!align="right"|1863

				|25.9%

!align="right"|1864

				|32.3%

!align="right"|1865

				|35.6%

!align="right"|1870

				|44.6%

!align="right"|1875

				|36.1%

!align="right"|1880

				|27.6%

!align="right"|1885

				|32.6%

!align="right"|1890

				|27.6%

!align="right"|1900

				|27.4%

!align="right"|1910

				|15.0%

!align="right"|1913

				|17.6%

!align="right"|1915

				|12.5%

!align="right"|1916

				|8.9%

!align="right"|1917

				|7.7%

!align="right"|1918

				|31.2%

!align="right"|1920

				|16.8%

!align="right"|1925

				|13.0%

!align="right"|1928

				|13.8%

!align="right"|1930

				|19.2%

!align="right"|1935

				|15.6%

!align="right"|1940

				|12.6%

!align="right"|1942

				|13.4%

!align="right"|1944

				|10.6%

!align="right"|1946

				|7.7%

!align="right"|1948

				|5.5%

!align="right"|1950

				|4.5%

!align="right"|1951

				|5.5%

!align="right"|1955

				|5.1%

!align="right"|1960

				|7.3%

!align="right"|1965

				|6.7%

!align="right"|1970

				|6.0%

!align="right"|1975

				|3.7%

!align="right"|1980

				|2.9%

!align="right"|1985

				|3.6%

!align="right"|1990

				|2.8%

!align="right"|1995

				|2.6%

!align="right"|2000

				|1.6%

!align="right"|2005

				|1.4%

!align="right"|2010

				|1.3%

----------------------------------------------------------------------------------------

Notes:All dollar amounts are in millions of U.S. dollars Income taxes include Individual and Corporate taxesFederal expenditures often exceed Revenue by temporary borrowings. Initially the U.S. Federal Government was financed mainly by customs(tariffs Average Tariff Rate % = Customs Revenue/ cost of Imports (goods).Other taxes collected are: Income Tax, Corporate Income Tax, Inheritance,Tariffs—often called Customs or duties on imports, etc. Income Taxes began in 1913 with the passage of 16th Amendment. Payroll taxes are Social Security and Medicare taxesPayroll Taxes began in 1940.Many Federal government Excise taxes are assigned to Trust Funds and are collected for and "dedicated" to a particular Trust. Sources: Historical Statistics of the United States (Colonial Times to 1957)Historical Statistics of the United States (Colonial Times to 1957); Value of Exports and Imports: 1790 to 1957, pp. 537–38; Value of Merchandise Imports and Duties: 1821 to 1957, p. 539; Indexes of Quantity and Unit Value of Exports and Imports: 1879 to 1957, pp. 540–41; Value of Merchandise Exports and Imports, by Groups of Customs Districts: 1860 to 1954, pp. 542–43; Value of Merchandise Exports and Imports, by Economic Classes: 1820 to 1957, pp. 544–45; Exports of Selected U. S. Merchandise: 1790 to 1957, pp. 546–47; Imports of Selected Products: 1790 to 1957, pp. 548–49; Value of General Imports, by Country of Origin: 1790 to 1957, pp. 552–53 weblink Historical Statistics of the United States (Colonial Times to 1970)Historical Statistics of the United States (Colonial Times to 1970) {Part 2 Zip file: CT1970p2-12;} Series Y 343–51 (1940–1970) Customs, Tot. Receipts, Income taxes; Payroll taxes, Excise; Y342 339 (1940 1970) Receipts; Y-352 357 (1789–1939) Government Receipts: Total (1789–1970), Customs (1789–1970), Y 358 373 Excise tax (1863–1970) Income Tax (1916–1970); Series U 1–25 Balance of International Payments Imports (1790–1970) [6] Accessed 5 Aug 2011 weblink Bicentennial Edition Historical Statistics of the United States, Colonial Times to 1970Bicentennial Edition Historical Statistics of the United States, Colonial Times to 1970 weblink Historical TablesWhitehouse Historical Tables 1940–2016; Table 1.1 Tot. Receipts (1901–2010); Table 2-1, 2–4 Excise Tax (1934–2010); Table 2-5 Customs (1940–2010) weblink Accessed 5 Aug 2011 U.S. imports for consumption, duties collected, and ratio of duties to value, 1891–2016; U.S. imports for consumption under tariff preference programs, 1976–2016U.S. imports for consumption, duties collected, and ratio of duties to value, 1891–2016; U.S. imports for consumption under tariff preference programs, 1976–2016 weblink U.S. Trade in Goods and Services-Balance of Payments (BOP) Basis, 1960–2010U.S. Trade in Goods and Services – Balance of Payments (BOP) Basis, 1960–2010 weblink Accessed 5 Aug 2011

Tariffs were the greatest source of United States federal revenue (up to 95% at times) until the federal income tax began after 1913. For well over a century the federal government was largely financed by tariffs averaging about 20% on foreign imports. At the end of the American Civil War in 1865 about 63% of Federal income was generated by the excise taxes, which exceeded the 25.4% generated by tariffs. In 1915 during World War I tariffs generated only 30.1% of revenues. Since 1935 tariff income has continued to be a declining percentage of Federal tax income.

Negative impacts

Living standards

A 2016 study found that "trade typically favors the poor", as they spend a greater share of their earnings on goods, as free trade reduces the costs of goods.JOURNAL, Fajgelbaum, Pablo D., Khandelwal, Amit K., 1 August 2016, Measuring the Unequal Gains from Trade, The Quarterly Journal of Economics, en, 131, 3, 1113–80, 10.1093/qje/qjw013, 9094432, 0033-5533,weblink Other research found that China's entry to the WTO benefitted US consumers, as the price of Chinese goods were substantially reduced.WEB,weblink China's WTO entry benefits US consumers, Amiti, Mary, Dai, Mi, 28 June 2017, VoxEU.org, 28 June 2017, Feenstra, Robert, Romalis, John, Harvard economist Dani Rodrik argues that while globalization and free trade does contribute to social problems, "a serious retreat into protectionism would hurt the many groups that benefit from trade and would result in the same kind of social conflicts that globalization itself generates. We have to recognize that erecting trade barriers will help in only a limited set of circumstances and that trade policy will rarely be the best response to the problems [of globalization]".WEB,weblink Has Globalization Gone Too Far?, Rodrik, Dani, Institute for International Economics,

Growth

According to economic historians Findlay and O'Rourke, there is a consensus in the economics literature that protectionist policies in the interwar period "hurt the world economy overall, although there is a debate about whether the effect was large or small."Economic historian Paul Bairoch argued that economic protection was positively correlated with economic and industrial growth during the 19th century. For example, GNP growth during Europe's "liberal period" in the middle of the century (where tariffs were at their lowest), averaged 1.7% per year, while industrial growth averaged 1.8% per year. However, during the protectionist era of the 1870s and 1890s, GNP growth averaged 2.6% per year, while industrial output grew at 3.8% per year, roughly twice as fast as it had during the liberal era of low tariffs and free trade.BOOK, Economics and World History: Myths and Paradoxes, Bairoch, Paul, University of Chicago Press, 1993, Chicago, 47, One study found that tariffs imposed on manufactured goods increase economic growth in developing countries, and this growth impact remains even after the tariffs are repealed.JOURNAL, DeJong, David, 2006, Tariffs and Growth: an empirical exploration of contingent relationships., The Review of Economics and Statistics, 88, 4, 625–40, 10.1162/rest.88.4.625, 197260, However, another study examining the tariff variation across the Australian colonies prior to Federation did not find any association between tariffs and growth.JOURNAL, Varian, Brian D., 2022, Revisiting the tariff-growth correlation: The Australasian colonies, 1866–1900,weblink Australian Economic History Review, en, 62, 1, 47–65, 10.1111/aehr.12233, 245356574, 0004-8992, According to Dartmouth economist Douglas Irwin, "that there is a correlation between high tariffs and growth in the late nineteenth century cannot be denied. But correlation is not causation... there is no reason for necessarily thinking that import protection was a good policy just because the economic outcome was good: the outcome could have been driven by factors completely unrelated to the tariff, or perhaps could have been even better in the absence of protection."JOURNAL, Irwin, Douglas A., 1 January 2001, Tariffs and Growth in Late Nineteenth-Century America, World Economy, en, 24, 1, 15–30, 10.1111/1467-9701.00341, 1467-9701, 10.1.1.200.5492, 153647738, Irwin furthermore writes that "few observers have argued outright that the high tariffs caused such growth."According to Oxford economic historian Kevin O'Rourke, "It seems clear that protection was important for the growth of US manufacturing in the first half of the 19th century; but this does not necessarily imply that the tariff was beneficial for GDP growth. Protectionists have often pointed to German and American industrialization during this period as evidence in favor of their position, but economic growth is influenced by many factors other than trade policy, and it is important to control for these when assessing the links between tariffs and growth."JOURNAL, H. O'Rourke, Kevin, 1 November 2000, British trade policy in the 19th century: a review article, European Journal of Political Economy, 16, 4, 829–42, 10.1016/S0176-2680(99)00043-9, A prominent 1999 study by Jeffrey A. Frankel and David H. Romer found, contrary to free trade skeptics' claims, while controlling for relevant factors, that trade does indeed have a positive impact on growth and incomes.JOURNAL, Frankel, Jeffrey A, Romer, David, June 1999, Does Trade Cause Growth?, American Economic Review, en, 89, 3, 379–99, 10.1257/aer.89.3.379, 0002-8282, free, Economist Arvind Panagariya criticizes the view that protectionism is good for growth. Such arguments, according to him, arise from "revisionist interpretation" of East Asian "tigers"' economic history. The Asian tigers achieved a rapid increase in per capita income without any "redistributive social programs", through free trade, which advanced Western economies took a century to achieve.BOOK, Panagariya, Arvind,weblink Free Trade and Prosperity: How Openness Helps the Developing Countries Grow Richer and Combat Poverty, 2019, Oxford University Press, 978-0-19-091449-3, Oxford, New York,

Developing world

{{See also|Infant industry argument|Protectionism in the United States}}There is broad consensus among economists that free trade helps workers in developing countries, even though they are not subject to the stringent health and labor standards of developed countries. This is because "the growth of manufacturing—and of the myriad other jobs that the new export sector creates—has a ripple effect throughout the economy" that creates competition among producers, lifting wages and living conditions.Krugman, Paul (21 March 1997). In Praise of Cheap Labor {{Webarchive|url=https://web.archive.org/web/20110907073142weblink |date=7 September 2011 }}. Slate. The Nobel laureates, Milton Friedman and Paul Krugman, have argued for free trade as a model for economic development. Alan Greenspan, former chair of the American Federal Reserve, has criticized protectionist proposals as leading "to an atrophy of our competitive ability. ... If the protectionist route is followed, newer, more efficient industries will have less scope to expand, and overall output and economic welfare will suffer."Sicilia, David B. & Cruikshank, Jeffrey L. (2000). The Greenspan Effect, p. 131. New York: McGraw-Hill. {{ISBN|978-0-07-134919-2}}.Protectionists postulate that new industries may require protection from entrenched foreign competition in order to develop. Mainstream economists do concede that tariffs can in the short-term help domestic industries to develop but are contingent on the short-term nature of the protective tariffs and the ability of the government to pick the winners.NEWS,weblink The Case for Protecting Infant Industries, 22 December 2016, Bloomberg.com, 24 June 2017, JOURNAL, Baldwin, Robert E., 1969, The Case against Infant-Industry Tariff Protection, 1828905, Journal of Political Economy, 77, 3, 295–305, 10.1086/259517, 154784307, The problems are that protective tariffs will not be reduced after the infant industry reaches a foothold, and that governments will not pick industries that are likely to succeed. Economists have identified a number of cases across different countries and industries where attempts to shelter infant industries failed.JOURNAL, O, Krueger, Anne, Baran, Tuncer, 1982, An Empirical Test of the Infant Industry Argument,weblink American Economic Review, 72, 5, JOURNAL, Choudhri, Ehsan U., Hakura, Dalia S., 2000, International Trade and Productivity Growth: Exploring the Sectoral Effects for Developing Countries, 3867624, IMF Staff Papers, 47, 1, 30–53, 10.2307/3867624,weblink JOURNAL, Baldwin, Richard E., Krugman, Paul, June 1986, Market Access and International Competition: A Simulation Study of 16K Random Access Memories, 10.3386/w1936, NBER Working Paper No. 1936, free, JOURNAL, Luzio, Eduardo, Greenstein, Shane, 1995, Measuring the Performance of a Protected Infant Industry: The Case of Brazilian Microcomputers, The Review of Economics and Statistics, 77, 4, 622–633, 10.2307/2109811, 2109811, 2142/29917,weblink free, NEWS,weblink US Tire Tariffs: Saving Few Jobs at High Cost, 2 March 2016, PIIE, 24 June 2017, en, The United States, which today has the largest economy in the world and one of the highest GDP per capita, has employed tariffs throughout much of its history. Alexander Hamilton, the first United States Secretary of the Treasury, supported tariffs at the country's inception in his 1791 Report on Manufactures. Abraham Lincoln signed the 1861 Morrill Tariff to raise revenue during the United States Civil War. The Republican Party (United States), a fiscally conservative political party, currently supports and has historically supported protectionism.WEB,weblink The Republicans have a long history of protectionism, MarketWatch, Jeffrey, Frankel, June 15, 2018,

Current world trends

(File:Protectionist measures taken 2008–2013 according to Global Trade Alert.png|upright=2.05|thumb|Protectionist measures taken since 2008 according to Global Trade AlertWEB,weblink Independent monitoring of policies that affect world trade, Global Trade Alert, 16 December 2016, )Certain policies of First World governments have been criticized as protectionist, however, such as the Common Agricultural PolicyNEWS,weblink The New York Times, A French Roadblock to Free Trade, 31 August 2003, 22 May 2010, in the European Union, longstanding agricultural subsidies and proposed "Buy American" provisionsWEB,weblink Brussels Warns US on Protectionism, 30 January 2009, Dw-world.de, 16 October 2017, in economic recovery packages in the United States.Heads of the G20 meeting in London on 2 April 2009 pledged "We will not repeat the historic mistakes of protectionism of previous eras". Adherence to this pledge is monitored by the Global Trade Alert,WEB,weblink Global Trade Alert, Globaltradealert.org, 16 October 2017, providing up-to-date information and informed commentary to help ensure that the G20 pledge is met by maintaining confidence in the world trading system, deterring beggar-thy-neighbor acts and preserving the contribution that exports could play in the future recovery of the world economy.Although they were reiterating what they had already committed to in the 2008 Washington G20 summit, 17 of these 20 countries were reported by the World Bank as having imposed trade restrictive measures since then. In its report, the World Bank says most of the world's major economies are resorting to protectionist measures as the global economic slowdown begins to bite. Economists who have examined the impact of new trade-restrictive measures using detailed bilaterally monthly trade statistics estimated that new measures taken through late 2009 were distorting global merchandise trade by 0.25% to 0.5% (about $50 billion a year).WEB,weblink Trade and the Crisis: Protect or Recover, Imf.org, 16 October 2017, Since then, however, President Donald Trump announced in January 2017 the U.S. was abandoning the TPP (Trans-Pacific Partnership) deal, saying, "We're going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it's going to be reversed."NEWS,weblink Trump Abandons Trans-Pacific Partnership, Obama's Signature Trade Deal, The New York Times, 23 January 2017, 1 July 2018, en, Baker, Peter, President Joe Biden has largely continued Trump's protectionist policies, and has not negotiated any new free trade agreements since assuming office in January 2021.WEB,weblink Biden Struggles to Push Trade Deals with Allies as Election Approaches, The Wall Street Journal, Yuka, Hayashi, December 28, 2023, The 2010s and early 2020s have seen an increased use of protectionist economic policies across both developed countries and developing countries worldwide.WEB, Intelligence, fDi, Protectionism: trade restrictions reach an all-time high,weblink 2024-01-11, www.fdiintelligence.com, en, WEB, Bank, European Central, 2019-04-24, The economic implications of rising protectionism: a euro area and global perspective,weblink 2024-01-11, European Central Bank, en,

See also

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• American System (economic plan)
• Autarky
• Brexit
• Currency war
• Developmentalism
• Digital Millennium Copyright Act
• Economic nationalism
• Free trade debate
• Globalization
• Henry C. Carey
• Historiography of the fall of the Western Roman Empire
• Imperial Preference
• International trade
• Market-preserving federalism
• National Policy
• Not invented here
• Project Labor Agreement
• Protected Geographical Status
• Protection or Free Trade
• Protectionism in the United States
• Protective tariff
• Rent seeking
• Resistive economy
• Smoot-Hawley Act
• Tariff Reform League
• 1923 United Kingdom general election
• Voluntary export restraint
• Washington Consensus

{{colend}}

Further reading

• BOOK, Milner, Helen V.,weblink Resisting protectionism: global industries and the politics of international trade, Princeton University Press, 1988, 978-0-691-01074-8, Princeton, New Jersey, registration,

• BOOK, Hudson, Michael,weblink America's Protectionist Takeoff, 1815–1914: The Neglected American School of Political Economy, ISLET, 2010, 978-3-9808466-8-4,

References

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External links

• {{Commons category-inline}}

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