Trade Protectionism

In: Business and Management

Submitted By hanita1
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The current economic situation has divided opinion on the use of trade protectionism.’ Discuss.

First and foremost to logically explore the question at hand, the meaning of trade protectionism must be fully comprehended, according to Amadeo (2012) “Trade protectionism is used by countries when they think their industries are being damaged by unfair competition by other countries”
The fundamental commotion of the pre-Great Recession on the economic order that was based on the assumption of inherent value of unlimited trade and capital flows has led to the new emergence of debate on trade protectionism as the means of combating the present crisis. In particular, the European Union (EU) nations have seen increasing calls for the implementation of the more protectionist economic policies. However, given the integrated and interconnected nature of both modern and specific national economies, one may note that protectionist policies would be more likely to hurt economic recovery and contribute to the sharpening of international trade contradictions. This paper presents an account of both parties’ argument, with the recourse to respective quantitative data, in order to substantiate the claim on infeasibility of treating protectionism as a cure for global and European economies’ maladies.

The Impact of Protectionism on Crisis and Post-Crisis Developments
According to Henn & McDonald (2011), trade protectionist measures implemented by certain nations in the late 2000s did not have a significant impact on the relative world trade recovery after the Great Recession’s peak. However, the authors demonstrate that protectionist policies do have a negative influence on the world trade growth, generally decreasing the latter’s volume by 0.21 percent (i.e. $30-35 billion) annually (Henn & McDonald 2011, p.5).…...

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