Proponents of protectionism argue that. International trade and international trade policy. Examples of protectionist policies

Protectionism

Protectionism- a policy of protecting the domestic market from foreign competition through a system of certain restrictions: import and export duties, subsidies and other measures. This policy contributes to the development of national production.

In economic theory, the protectionist doctrine is the opposite of the doctrine of free trade - free trade, the dispute between these two doctrines has continued since the time of Adam Smith. Proponents of protectionism criticize the doctrine of free trade from the standpoint of increasing national production, employment and improving demographic indicators. Opponents of protectionism criticize it from the standpoint of free enterprise and consumer protection.

A widespread transition to a policy of protectionism began in continental Europe at the end of the 19th century, after the protracted economic depression of the 1870-1880s. After this, the depression ended, and rapid industrial growth began in all countries that followed this policy. In the United States, protectionist policies were most actively pursued between the end of the Civil War (1865) and the end of World War II (1945), but continued in an implicit form until the late 1960s. In Western Europe, a widespread transition to strict protectionist policies occurred at the beginning of the Great Depression (1929-1930). This policy continued until the end of the 1960s, when, in accordance with the decisions of the so-called. During the Kennedy Round, the United States and Western European countries carried out coordinated liberalization of their foreign trade.

Views of supporters of protectionism and arguments in its defense

Protectionism is seen as a policy that stimulates economic growth in general, as well as industrial growth and the growth of welfare of the country pursuing such a policy. The theory of protectionism states that the greatest effect is achieved: 1) with uniform application of import and export duties, subsidies and taxes in relation to all entities, without any exceptions; 2) with an increase in duties and subsidies as the depth of processing increases and with the complete abolition of duties on imported raw materials; 3) with a blanket imposition of import duties on all goods and products, either already produced in the country, or those whose production, in principle, makes sense to develop (usually in the amount of at least 25-30%, but not at a level that is prohibitive for any competing import); 4) upon refusal of customs taxation on the import of goods the production of which is impossible or impractical (for example, bananas in northern Europe).

Supporters of protectionism argue that the countries of Europe and North America were able to industrialize in the 18th-19th centuries. mainly due to protectionist policies. They point out that all periods of rapid industrial growth in these countries coincided with periods of protectionism, including a new breakthrough in economic development that occurred in Western countries in the mid-20th century. (creation of “welfare states”). In addition, they argue, like the mercantilists of the 17th and 18th centuries, that protectionism promotes higher birth rates and faster natural population growth.

Criticism of protectionism

Critics of protectionism typically point out that tariffs raise the cost of imported goods domestically, which can hurt consumers. In addition, an important argument against protectionism is the threat of monopolization: protection from external competition can help monopolists establish complete control over the domestic market. An example is the rapid monopolization of industry in Germany and Russia at the end of the 19th and beginning of the 20th centuries, which occurred under the conditions of their protectionist policies.

Some economists are trying to develop a neutral view of protectionism, free trade, considering their impact on the growth of national welfare through an analysis of gains and losses. In their opinion, the benefits from the application of export and import duties can be contrasted with production and consumer losses arising from distortion of the motives of behavior of both producers and consumers. However, a case is also possible when the benefits from improving the terms of trade after the introduction of foreign trade taxes exceed the losses from it. The main prerequisite for improving the terms of trade from the introduction of duties is the presence of market power in the country, that is, the ability of one or a group of sellers (buyers) in the country to influence export prices and/or import prices.

Quotes

If England has been free-trading for 50 years in our time, then we cannot forget that for 200 years it was subject to increased protectionism, which began with the Navigation Act (1651), and that it still surpasses other countries in industrial and commercial development, which grew on the basis of protectionism.

Beginners of all kinds of industrial activities receive their first goods at a higher price than enterprises that have already established themselves, gained experience, and paid off their initial costs can sell them. Such strengthened enterprises, owning capital and credit, easily stop the rivalry that is reviving in other countries, reducing prices or even selling goods temporarily at a loss. A lot of well-known data testifies to this.

Articles

W. Stolper, P. Samuelson - “Protectionism and real wages”
Vladimir Popov - “China: Technology of an Economic Miracle”
Economic protectionism policy: pros and cons
Arguments for and against protectionism using the example of the Customs Union of Belarus, Kazakhstan and Russia

Links

Trade
Definitions	Balance of payments · Current account (balance by country) · Trade balance (balance by country) · Capital account · Gold and foreign exchange reserves · Comparative advantage · Absolute advantage · International division of labor · Import substitution · International trade (countries by export · countries by import ) Economic integration
Organizations and politics in the field of trade	World Trade Organization · International Monetary Fund · World Bank · International Trade Center · Trade Bloc · Free Trade Area · Customs Union · Trade Barriers · Import Quota · Tariff
Economic schools	Free Trade · Net Balance · Salamanca · Mercantilism · Protectionism
Related Topics	Sales · Globalization · Outsourcing · Trade Justice and Fair Trade

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See what “Protectionism” is in other dictionaries: A system of protective tariffs designed to support domestic production. Dictionary of foreign words included in the Russian language. Chudinov A.N., 1910. PROTECTIONISM system of patronage. duties, i.e. high taxation of foreign... ...

Dictionary of foreign words of the Russian language The economic policy of the state, which consists in purposefully protecting the domestic market from the flow of foreign-made goods. It is carried out through the introduction of a complex of direct and indirect restrictions on the import of customs... ...

Financial Dictionary - (protectionism) The view that restricting international trade is a desirable policy. Its purpose may be to prevent unemployment or loss of production capacity in industries threatened by imports, to promote...

Economic dictionary - (protectionism) Protection, patronage (patronage system in trade). The theory or practice of restricting trade between countries in favor of domestic producers by imposing tariffs, quotas, or (most commonly used in modern times... ...

Political science. Dictionary. protectionism - (social psychological aspect) (from lat. protectio cover) selfish protection provided to someone by a person or group of people with power. P. leads to the emergence of a privileged circle of people, the cultivation of conformism,... ...

Great psychological encyclopedia 1) economic policy of the state aimed at protecting the national economy from foreign competition. Implemented through financial incentives for domestic industry, export stimulation, and import restrictions. For… …

Political science. Dictionary. Big Encyclopedic Dictionary - a, m. protectionnisme m.

Structural changes occurring in the economies of countries under the influence of the scientific and technological revolution, specialization and cooperation of industrial production strengthen the interaction of national economies. This contributes to the activation of international trade. International trade, which mediates the movement of all intercountry commodity flows, is growing faster than production. According to research by the World Trade Organization, for every 10% increase in global production there is a 16% increase in global trade. This creates more favorable conditions for its development. When disruptions occur in trade, the development of production slows down.

1. Concept and elements of international trade.
2. Advantages of foreign economic relations: absolute and comparative advantages.
3. Trade policy and its instruments.
4. Customs tariffs and import quotas.
5. Export regulation instruments
6. Dumping.
7. Practical task
8. List of sources used.

Files: 1 file

7. Practical task

1. In order to have a comparative advantage in the production of a certain good, a country must:

a) have an absolute advantage in its production;
b) produce this product in greater quantities than other countries;
c) produce this product at lower costs than in other countries;
d) produce this product cheaper than it costs to produce other goods;
e) when producing goods, fulfill all of the above points.

2. If a country has an absolute advantage in the production of a certain good, this means that it:
a) has a comparative advantage in its production;
b)produces it in large quantities;
c) produces it at lower costs than other countries;

d) produces it under conditions characterized by negative answers to all of the above points.
Answer: b

3. Proponents of protectionism argue that tariffs, quotas, etc.
trade barriers are necessary for:
a) protecting emerging industries from foreign competition;
b) increasing the level of employment in the country;
c) preventing dumping;
d) ensuring the national security of the country;
e) everything listed above.

4. Which of the listed forms of state regulation of foreign economic relations is not a significant obstacle to
freedom of trade:
a) import duty;
b) “voluntary” export restrictions;
c) import quota;
d) licenses for export and import;
e) none of the above.

Answer: d
5. What measure of impact on imports do you consider tariffs:

a) establishment of national technical standards;
b) introduction of import duties;
c) placement of government orders only at domestic enterprises;
d) introduction of import licenses;
e) development of intercountry agreements on voluntary import restrictions;
f) introduction of import quotas.

Answer: a, b, c.

8. List of sources used

Kiseleva E. A. Macroeconomics. Express course: textbook. allowance / E. A. Kiseleva. – M.: KNORUS, 2008.
Kiseleva E. A. Macroeconomics: a course of lectures / E. A. Kiseleva. – M.: Eksmo, 2005.
Kulikov L. M. Economic theory: textbook / L. M. Kulikov. – M.: Prospekt, 2006.
Kurakov L.P. Course in economic theory: textbook. allowance / L. P. Kurakov, G. E. Yakovlev. – M.: Gelios ARV, 2005.
Course of economic theory: textbook / ed. E. A. Chepurina, E. A. Kiseleva. 5th ed. ; add. and processed – Kirov: ASA, 2006.
Course of economic theory / ed. A. V. Sidorovich. – M.: DIS, 1997.
Krasnikova E. V. Economics of the transition period: textbook. allowance / E. V. Krasnikova. – M.: Omega – L, 2005.
Ledyaeva S.V. Forecasting in macroeconomics: applied aspect: textbook. allowance / S. V. Ledyaeva. – Khabarovsk: KhSAEP, 2005.
McConnell R. Economics: principles, problems and politics: textbook / R. McConnell, S. Brew; translated from English 14th ed. – M.: Infra-M, 2005.

Keywords:international trade, trade between countries, protectionism, free trade

Historically there arevarious forms of state protection of national interestsin the struggle on world markets, which determine the trade policies of individual countries. Most famous politicianprotectionism (protection) and free trade (complete freedom of trade).

With a light hand Adam Smith protectionism of the XVI-XVIII centuries. came to be called mercantilism. And although today there are two different concepts - protectionism and mercantilism, economic historians in relation to the era of the 17th-18th centuries. put an equal sign between them. And the historian P. Bayrokh clarifies that starting from the 1840s. mercantilism became known as protectionism.

In the 18th century protectionism was the dominant doctrine, recognized by the leading states of Europe: Great Britain, Prussia, Austria, Sweden. In the 19th century protectionism was replaced by the doctrine of free trade, initiated by Great Britain.

A widespread transition to protectionist policies began in continental Europe at the end of the 19th century, after a protracted economic depression of the 1870s-1880s. After this, the depression ended, and rapid industrial growth began in all countries that followed this policy. In the United States, protectionist policies were most actively pursued between the end of the Civil War (1865) and the end of World War II (1945), but continued in an implicit form until the late 1960s.

In Western Europe, a widespread shift to strict protectionist policies occurred at the beginning of the Great Depression (1929-1930). This policy continued until the end of the 1960s, when, in accordance with the decisions of the so-called. "Kennedy Round" the United States and Western European countries carried out coordinated liberalization of their foreign trade

Protectionism— a policy of protecting the domestic market from foreign competition through a system of certain restrictions: import and export duties, subsidies and other measures. On the one hand, such a policy contributes to the development of national production.

Protectionism is seen as a policy that stimulates economic growth in general, as well as industrial growth and the growth of welfare of the country pursuing such a policy.

Protectionism theory states that the greatest effect is achieved:

1) with uniform application of import and export duties, subsidies and taxes in relation to all entities, without any exceptions;

2) with an increase in duties and subsidies as the depth of processing increases and with the complete abolition of duties on imported raw materials;

3) with a blanket imposition of import duties on all goods and products, either already produced in the country, or those whose production, in principle, makes sense to develop (as a rule, in the amount of at least 25-30%, but not at a level that is prohibitive for any competing import);

4) upon refusal of customs taxation on the import of goods the production of which is impossible or impractical (for example, bananas in northern Europe).

Types of protectionism:

selective protectionism - protection from a specific product, or against a specific state;

sectoral protectionism - protection of a specific industry;

collective protectionism - mutual protection of several countries united in an alliance;

hidden protectionism - protectionism using non-customs methods;

local protectionism - protectionism of products and services of local companies;

green protectionism - protectionism through environmental law.

The Challenge of Protectionist Policies- encouraging the development of the national economy and protecting it from foreign competition by establishing high duties on goods imported into the country or restricting (prohibiting) the import of products.

Supporters of protectionism argue that the countries of Europe and North America were able to industrialize in the 18th-19th centuries. mainly due to protectionist policies. They point out that all periods of rapid industrial growth in these countries coincided with periods of protectionism, including a new breakthrough in economic development that occurred in Western countries in the mid-20th century. (creation of a “welfare state”). In addition, they argue, like the mercantilists of the 17th and 18th centuries, that protectionism promotes higher birth rates and faster natural population growth.

Critics of protectionism typically point out that tariffs raise the cost of imported goods domestically, which can hurt consumers.

In addition, an important argument against protectionism is the threat of monopolization: protection from external competition can help monopolists establish complete control over the domestic market. An example is the rapid monopolization of industry in Germany and Russia at the end of the 19th and beginning of the 20th centuries, which occurred under the conditions of their protectionist policies.Free trade

(English free trade - free trade) - a direction in economic theory, politics and economic practice, proclaiming freedom of trade and non-interference of the state in the private business sphere of society. On practice free trade usually means

The main premise for the development of “free trade” was the need that arose in the 18th century to sell excess capital imported into the economy by developed countries (England, France, then the USA) in order to avoid the depreciation of money, inflation, as well as to export manufactured goods to participating countries and colonies.

The arguments in favor of protectionism are economic(trade hurts the economy) and moral(the effects of trade may help the economy, but have other harmful effects on regions) Aspects, and the general argument against free trade is that it is colonialism and imperialism in disguise.

The moral category, broadly speaking, includes issues of income inequality, environmental degradation, child labor and harsh working conditions, the race to the bottom, wage slavery, increasing poverty in poor countries, damage to national defense, and forced cultural change. Rational choice theory suggests that people often consider only the costs they themselves incur when making decisions, rather than the costs that others may bear.

Some economists are trying to work out neutral look on protectionism and free trade, considering their impact on the growth of national welfare through an analysis of gains and losses.

In their opinion, the benefits from the application of export and import duties can be contrasted with production and consumer losses arising from distortion of the motives of behavior of both producers and consumers.

Proponents of protectionism put forward arguments in its favor:

1. Stimulating production and increasing employment. Supporters of protectionism argue that import restrictions are necessary, firstly, in order to support domestic producers, preserve jobs and thereby ensure social stability. Secondly, a reduction in imports increases aggregate demand in the country and thereby stimulates production and employment growth.

However, the essence of the problem is that domestic production needs protection due to its insufficient efficiency, and the policy of protectionism, by limiting competition, creates conditions for maintaining this situation. In addition, although imports reduce employment in import-substituting industries, they also create new employment (related, for example, to the purchase, sale, and after-sales service of imported products). Finally, the state can provide support to domestic producers using a more effective method than protectionism, with less losses for the well-being of society. Figure 4.10 compares the effects of imposing a customs tariff and providing an equivalent subsidy to producers. If the free foreign trade regime is maintained and producers receive a subsidy, then an increase in domestic production is achieved without raising prices and, therefore, consumers do not suffer losses. The benefit to producers is the area (c + d), and the government's cost of subsidies is the area (a + b) = (b + c + d). Thus, the total loss from the provision of a subsidy will be in area b, while the loss from introducing a tariff is larger and is in area (b + e).

2. Protecting young industries. The argument is often made that protectionism is necessary as a temporary measure to allow emerging, high-cost industries to take shape and strengthen their positions. As these industries mature and become more efficient, the level of protection may decline. This argument is especially often made in relation to developing countries.

However, firstly, it is quite difficult to determine exactly which industry is truly promising from the point of view of forming new comparative advantages of the country. Secondly, protectionism in relation to young industries significantly reduces incentives to improve their efficiency, and as a result, the period of formation can be delayed indefinitely. Finally, thirdly, in the case of young industries, the provision of subsidies or other benefits turns out to be a more effective means of support than foreign trade protectionism.

Fig.4.10. Comparison of tariff and subsidy

3. Increase in state budget revenues. In many cases, the government pursues protectionist policies because it needs additional revenue to cover government budget deficits. This argument is especially popular in those countries where a normal tax system is in its infancy and there are significant difficulties in collecting domestic taxes.

Of course, customs duties are organizationally much easier to collect than, for example, income tax. However, budget revenues in this case strongly depend on the degree of price elasticity of demand for imports, and with sufficiently high elasticity, state revenues will increase not with strengthening, but with weakening protectionism.

4. Ensuring the economic security and defense capability of the country. The argument in favor of protectionism in relation to industries producing strategic and military products is not economic, but rather military-political in nature. It is argued that the country's over-reliance on imports can leave the country in a vulnerable position in the event of an emergency.

However, this seemingly fair argument also requires careful specific analysis. In particular, the very definition of industries necessary to ensure national security can cause serious difficulties: these may include the production of weapons, food, computers, clothing, cars, energy, and much more. It is difficult to name an industry that does not contribute to ensuring the country's security. In addition, promoting the production of strategic non-renewable resources (such as oil and gas) through protectionism may create future dependence on imports. It is more expedient to create strategic reserves of these products at cheap prices on the world market, rather than making them more expensive by introducing restrictions on foreign trade. Finally, strategic industries can be protected in a more effective way than foreign trade protectionism (for example, with subsidies).

Arguments against protectionism.

1. Protectionism reduces or eliminates the benefits of specialization. If countries cannot trade freely, they must shift resources from efficient (low-cost) uses to inefficient ones in order to satisfy their varied needs.

2. Protectionism destroys the spirit of competition, develops privileges and generates rent by position. It is also harmful from the point of view of the consumer, whom it forces to overpay for the goods and services he needs.

3. Exacerbation of interstate contradictions. It can hardly be expected that protectionist policies pursued by one country will not provoke retaliatory measures from its trading partners. In other words, the consequence of a reduction in imports as a result of the country’s introduction of tariff or non-tariff restrictions on foreign trade will most likely be a reduction in its exports, which means a decrease in employment, a decrease in aggregate demand, etc. Economic contradictions between countries can escalate to such an extent that real trade wars begin, which will have very serious negative consequences for all parties involved. Such a scenario for the development of events in reality is far from rare.

4. Reduction in exports and deterioration in the balance of payments. Protectionist foreign trade policy, by reducing imports and increasing the country's net exports, inevitably affects the level of the national currency exchange rate, contributing to its increase. In turn, an increase in the exchange rate stimulates imports and discourages exports. As a result, the country's balance of payments deteriorates, which has serious negative macroeconomic consequences.

339. A policy of protectionism was first recommended by:

a) physiocrats

b) early mercantilists

c) maximalists

D) late mercantilists

e) neoclassical.

^ 340. Supporters of protectionism argue that the introduction of trade barriers (duties, quotas) leads to:

a) reduction in employment in sectors of the national economy

B) protection of sectors of the national economy

c) the formation of internal monopolies

d) weakening the country's defense capability

e) weakening competition in the world market.

^ 341. The principle of absolute advantage was first formulated:

a) K. Marx

b) J.M. Keynes

c) D. Ricardo

D) A. Smith

d) A. Marshal.

^ 342. International trade is mutually beneficial if:

a) one country has an absolute advantage in the production of one good, and the second country has an absolute advantage in the production of another good

b) the country does not have an absolute advantage in the production of any good

C) countries have a comparative advantage in the production of certain goods

d) a country has both an absolute and comparative advantage in the production of one good

e) all countries have absolute and comparative advantages in the production of goods.

^ 343. The relationship between foreign exchange receipts into a country and payments that the country makes abroad over a certain period of time is:

a) trade balance

B) balance of payments

c) state budget

d) balance of services

e) balance of transfers.

344. If the currency of a given country is exchanged without restrictions for any foreign currencies, i.e. There are no currency restrictions on either current or capital transactions in the balance of payments, this means:

a) external convertibility

b) internal convertibility

B) free convertibility

d) partial convertibility

e) non-convertibility (closedness) of the currency.

^ 345. Full control over investment objects due to full ownership of foreign capital, as well as possession of a controlling stake, ensures:

a) export of loan capital

b) import of entrepreneurial capital

c) export of capital in the form of portfolio investments

D) export of entrepreneurial capital in the form of direct investment

e) import of loan capital.

^ 346. International monopolies include:

a) transnational corporations (TNCs)

b) multinational corporations (MNCs)

c) international monopoly unions (IMU)

d) national corporations

D) TNCs, MNCs, MMCs.

^ 347. The trade surplus will increase if the country:

a) real interest rates will fall

b) the inflation rate will increase

B) the rate of economic growth will increase

d) the rate of economic growth will decrease

D) real interest rates will rise.

^ 348. In modern conditions, the growth rate of trade in goods is lower only than the growth rate of trade:

a) gold

b) capital

c) labor force

d) land

D) services

^ 349. Name the main source of benefits from international trade :

A) differences in prices for goods in individual countries

b) ignorance of prices in neighboring countries

c) the principle of mercantilism: “buy cheaper, sell more expensive”

d) lower prices for goods

e) the difference in customs tariffs of different countries.

^ 350. Who, in classical economic theory, proved that international trade makes it possible to benefit from the global division of labor:

a) W. Petty

b) D. Ricardo

c) K. Marx

D) A. Smith

e) J. M. Keynes

^ 351. Which of the following problems does not relate to global socio-economic problems?

a) economic backwardness

b) demographic problem

c) food problem

d) environmental problem

D) increase in crime

^ 352. International specialization and free trade based on the principles of comparative advantage mean:

a) reduction in domestic consumption of countries

b) increase in domestic consumption of countries

C) an increase in the total production of goods, exceeding the level of consumption of countries of their production capabilities

d) increase in gross consumption

e) reduction in gross consumption

^ 353. According to the principle of comparative advantage:

a) total costs of production will be lowest when each product is produced by the country in which variable costs are lower

b) the total volume of output will be smallest when each product is produced by the country that carries out more profitable specialization

C) total output will be greatest when each good is produced by the country that has the lowest opportunity cost.

d) total output will be greatest when each product is produced by the country that is pursuing advantageous specialization

E) the country's net exports are higher than those of other countries.

^ 354. The Bretton Woods monetary system is a system :

a) the gold standard

b) gold parity

B) fixed linked exchange rates

d) “floating” exchange rates

d) exchange rate

^ 355. The sum of all expenses of the inhabitants of a country on foreign goods minus the expenses of the rest of the world on the goods of this country is:

a) national consumption

b) import

c) export

d) national savings

D) net exports

^ 356. Full convertibility of the national currency means:

a) the ability to purchase foreign currency without restrictions

b) the possibility of free export and import of national currency

c) the possibility of free export and import of foreign currency

D) the possibility of free exchange of the currency of a given country for the national currency of another country

e) the possibility of establishing a floating exchange rate of the national currency

357. ^ The firm is a monopsony in the labor market, but does not have monopoly power in the market for finished products. Compared to competitive firms, it will:

a) hire more workers and set higher wages

B) hire fewer workers and set lower wages.

c) hire fewer workers and set higher wages

d) hire more workers and set lower wages

d) hire more workers at the same wage level

^ 358. The difference between the value of national exports and imports is:

a) balance of payments

B) trade balance

c) purchasing power parity

d) trade balance parity

d) foreign exchange intervention.

^ 359. International labor migration is affected by:

a) high level of unemployment within the country

B) differences in wage conditions

c) desire to get an education

d) low birth rate

e) low level of unemployment within the country

360. According to Okun's law, a two percent excess of the actual unemployment rate over its natural level means that the lag of the actual volume of GDP from the real one is:

d) significantly more than 5%.