The Changing Nature of Protectionism: Are "Free Traders" Up to the Challenges It Presents?

In the economic model that underlies the WTO the only group that can be expected to ask for protection is producers in importing countries. The existing multilateral trade architecture reflects that assumption. Much of the recent criticism of the multilateral trade regime has arisen as a result of new groups explicitly asking domestic politicians for protection. As these groups were not expected to ask for protection, the international trade regime does not allow domestic politicians to extend protection on the basis of the new demands. Further, countries are expected to perceive benefits from trade liberalisation. These benefits must be balanced against the expected political benefits of protectionism (and their associated welfare costs) when trade negotiations are being conducted. Failed economies, however, see few benefits from liberalisation and, hence, are biased toward protectionism, particularly if trade restrictions are a source of corruption incomes. This article explains the sources of new appeals for protectionism, outlines the relationship with traditional producer protectionism and lays out the challenges the new pressures present for trade-liberalising multilateral institutions.consumers, environmentalists, failed economies, producers, protectionism, welfare, International Relations/Trade,

The role of macroeconomic performance in individual’s attitudes towards protectionism

In this paper we investigate some factors shaping individual support for protectionism that have not been studied previously. We examine a heterogeneous sample of thirty countries which includes both small and large and developed and developing countries using data from the 2003 International Social Survey Program (ISSP). We confirm the influence of social status (education, age and relative income), values and attachments on preferences for trade policies and the fact that skilled people are also more likely to be pro-trade. We also verify previous findings concerning the fact that individual’s opinions match with how their revenue could be affected in the medium or long term by trade liberalization. We highlight other important factors influencing public opinion towards protectionism: individual support for protectionism is also affected by the macroeconomic context and size of their country of residence.Preferences, protectionism support, free trade, mercantilist, nationalism

Provincial Protectionism

In a federal state, political leaders of constituent units might protect their enterprises from the federal center (e.g., allowing them not to pay federal taxes). The effectiveness of such protection depends crucially on the ability of local authorities to extract rents from enterprises. They can easily do so, if there is a small number of enterprises with large employment, and local monopolies can be effectively sustained. They cannot do it so easily if regional industry is competitive, political opposition is strong, and the federal center has enough means to enforce payment of taxes. We build a simple model to argue that it is the industrial structure of constituent units that determines political relations between them and the federal center. The theory is supported by the recent experience of Russia, China, and Argentina.http://deepblue.lib.umich.edu/bitstream/2027.42/39942/3/wp557.pd

Democracy and Protectionism

Does democracy encourage free trade? It depends. Broadening the franchise involves transferring power from non-elected elites to the wider population, most of whom will be workers. The Hecksher-Ohlin-Stolper-Samuelson logic says that democratization should lead to more liberal trade policies in countries where workers stand to gain from free trade; and to more protectionist policies in countries where workers will benefit from the imposition of tariffs and quotas. We test and confirm these political economy implications of trade theory hypothesis using data on democracy, factor endowments, and protection in the late nineteenth century.

Democracy and Protectionism

Does democracy encourage free trade? It depends. Broadening the franchise involves transferring power from non-elected elites to the wider population, most of whom will be workers. The Hecksher- Ohlin-Stolper-Samuelson logic says that democratization should lead to more liberal trade policies in countries where workers stand to gain from free trade; and to more protectionist policies in countries where workers will benefit from the imposition of tariffs and quotas. We test and confirm these political economy implications of trade theory hypothesis using data on democracy, factor endowments, and protection in the late nineteenth century.factor endowments, Heckscher-Ohlin trade theory, Stolper- Samuelson theorem and tariffs

Market Access and Domestic Support Measures

Agrarprotektionismus, Industrie, Protektionismus, Messung, Markteintritt, Agricultural protectionism, Industries, Protectionism, Measurement, Market entry

Timing of protectionism

Recent history gives us evidence of the different timing and results of the opening up of several economies. We present a model to explain this divergence. Accordingly with this evidence, we show that, provided the government prefers more competition than less competition irrespective of the .rms. nationality, essentially three concepts explain everything: The agent' degree of impatience, the gap between the domestic and the foreign technologies and the costs due to the political environment. In sharp contrast to the existing literature, we show that a temporal protectionism can be time consistent, and domestic firms adopt new technologies under it.Temporal Protectionism, Time Consistency, Bankruptcies

Are Standards Always Protectionist?

We analyze the effects of a domestic standard that reduces an externality associated with the consumption of the good targeted by the standard, using a model in which foreign and domestic producers compete in the domestic good market. Producers can reduce expected damage associated with the externality by incurring a cost that varies by source of origin. Despite potential protectionism, the standard is useful in correcting the consumption externality in the domestic country. Protectionism occurs when the welfare-maximizing domestic standard is higher than the international standard maximizing welfare inclusive of foreign profits. The standard is actually anti-protectionist when foreign producers are much more efficient at addressing the externality than are domestic producers. Possible exclusion of domestic or foreign producers arises with large standards, which may alter the classification of a standard as protectionist or non-protectionist. The paper provides important implications for the estimation and use of tariff equivalents of nontariff barriers. JEL Classification Code: F13externality; nontariff barriers; protectionism; safety; standard; tariff equivalent

Globalisation as a ‘good times’ phenomenon: a search-based explanation.

Globalisation is associated with long periods of sustained economic growth and credit expansion, whereas major recessions tend to lead to falling trade and protectionism. The sensitivity of trade to global economic conditions is not simply driven by policy: rather, in a model of costly search, firms who are engaged in a searching process are very sensitive to changing economic circumstances. In turn, this causes protectionism to be partly endogenous, since optimal noncooperative tariffs can be high during periods when the sensitive, searching firms have exited the market.Globalisation, trade, search

Seán Lemass and the Nadir of Protectionism

This paper considers the move to protectionism in Ireland with the advent of the new government in 1932. Using material from an unpublished paper by Lemass the paper shows the logical basis of the protectionist policy adopted: designed as a means of increasing employment and possible development. This paper then places the collapse of protectionism in the late 1950s within the context of a general failure of protection to provide for development and a mismanaged macro-policy, leading to the acceptance of outward looking policies.