Protectionism: Alluring but Deadly

by Daniel J. Ikenson
Daniel J. Ikenson is associate director of the Center for Trade Policy Studies at the Cato Institute.
Added to cato.org on March 14, 2009
This article appeared in the Zimbabwe Independent on March 14, 2009.

The global economic meltdown has prompted fears of resurgent protectionism and some governments have already raised tariffs and other trade barriers.
But, despite the occasional dalliance with protectionism, treaties and good sense prevent a more serious romance.

Amid pledges of restraint from the big economies, India recently raised tariffs and placed other restrictions on some imported steel products.
Ecuador raised tariffs by 5 to 20% on 940 products. Argentina's restrictions include auto parts, textiles, televisions and shoes. And the Indonesian government is requiring civil servants to purchase only domestic products.

Similar actions have taken place in other countries and surely there will be more in the months ahead. But the risk of protectionism escalating to the point that it noticeably reduces global trade further is remote.
With the proliferation of international production, investment and joint ventures, the "Us versus Them" characterisation of global competition no longer applies.

It is now a competition between global supply chains to produce and deliver products made with parts and labour from many countries (see the full article, Protectionism: Alluring but Deadly, at cato.org)