Protectionism

Some types of protectionism

A policy of Indépendance can result in certain cases in applying measurements aiming at protecting strategic industries.

Sometimes noted excesses, qualified protectionism, can appear several manners:

either to institute in the policies of making of the Government contracts a preference for the products manufactured inside the country,
or to impose international standards which take course the other countries,
or to apply Customs duties to the imported products,
or to protect the strategic Industries against the acquisitions of a holding in capital (tender offer),
or to pour Subvention S and various assistances with the producing S buildings,

One can still quote the commercial Réciprocité, the Balance the commercial,

Protectionism by zones

the United States

Government contracts

Since the Years 1930, the the United States adopt a systematic policy consisting in prohibiting in the Government contracts the products which are not manufactured with the the United States. There exist also Subvention S. the laws are:

Buy American Act of 1933
Small Business Act of 1953 for the small companies (see also Pact SME),
Defense Federal Acquisition Regulations Supplement (DFARS)
Exceptions national security (ALENA, chapter 10, left D, article 1018)
Amendment Berry (textiles, foodstuffs and nonAmerican clothing)
Amendment Byrnes-Tollefson (nonAmerican boats)
Buy American - public transport (subsidies of the Federal Transit Administration)
Buy American - road construction (subsidies of the Federal Highway Administration)
Buy American - airports (subsidies of the Federal Aviation Administration)

See: Making of the markets of the American administration: memorandum of the bonds relating to the most frequent obstacles

In 1989, the group Bull bought the manufacturer of Micro-ordinateur S Zenith Dated Systems, in the hope to acquire the market of the microcomputers of the American administration, completely ignoring the American legislation on the open-market purchases. The American federal government obviously retorted by calling upon another supplier. This strategic error involved heavy financial losses for Bull, which had to be negotiated by Bernard Pache near the European Union. The subsidies are prohibited today by the European Union.

The the United States were opposed to the development of supersonic the Concorde by applying Norme S to the Bruit (it is true that the Harmony was a very noisy Avion).

Advocacy policy

Since the end of the Years 1980, the United States widened this policy with more offensive actions of coherent support of the American companies for the Exportation. This policy is called " advocacy policy". It rests on a dedicated organization, l'" advocacy center".

See: US Governement export portal - The advocacy center

In the vision of the American strategists, the world is divided into three zones: the the United States conceive, the Asia produced, and the Europe consumes.

Today the the United States seek to impose Norme S international in the field of the Technologies the information.

For example, the technical Spécification EbXML tends to be essential in the world like a standard of E-business.

Retaliatory measures

Section 301 of the general American law of 1988 on the trade and competitiveness makes it possible the American Administration to take within very short times any retaliatory measure with regard to the business partners whose practices would be considered to be unfair.

Japan

One of the customs tariffs highest of the world is that which the Japan practices on foreign rice, taxed to 900%.

China

The China found benefit with the E-business, which gets competitive Avantages to him because of the low cost of the Labor in this country. It adopted the specification EbXML of E-business like national standard in 2003.

See:

ebXML ace has national standard in Clouded on the site ebXML
Catalog off Chinese standards

European Union

The common Agricultural policy consisted a long time of payment of Subvention S agricultural. This policy supported the Intensive agriculture, which had detrimental consequences on the plan of the Sustainable development.

In France, one calls upon the cultural Exception sometimes.

The economic relations between the European Union and the United States were the subject of an information paper to the National Assembly in France in 1999.

See: Information paper deposited by the delegation of the National Assembly for the European Union on the economic relations between the European Union and the United States.

Of European protectionism

Economic Europe resulting from the successive treaties since the creation of the EEC in Rome in 1957 made it possible to make zone of the 27 today a space economically unified, very integrated, resting on freedom of movement of the capital, goods and people. The question is now to know if an external protectionism is possible, in order to protect an interior market from 450 million consumers. The defenders of this project propose the rate of opening of 12% of the regional zone (88% of the European trade are done with a member of the Union), enough low rate to allow common economic policies as well as external tariffs more protective for the sectors in difficulties (delocalizations). The United States, cantors of the economic liberalism, is paradoxically one of the most protective country of the world. The adversaries of such a project propose the misdeeds of protectionism, the questioning of competition, the risk of fold of the States on them-even. According to them, the market car-eliminates the least profitable companies (case of the textile) which are delocalized towards countries where the labor is less expensive; countries known as " développés" as for them are dedicated to specialize in innovating sectors, with strong " matter grise" , and not concurrençables - for the moment by the emerging countries. The liberal protectionism of Friedrich List is him also possible: the financing of the research projects or the installation of branches considered as incipient and thus fragile could be studied. The key sectors (energy, safety, agriculture, ecology) cannot be regarded as simple saleable sectors with highest offerer. Would be necessary it can be to reintegrate the idea of protection in certain precise cases. Today, the word protectionism makes fear and is not any more in vogue. He has been opposed to the free trade and by extension at the end liberalism, current ultra-dominating in the economic thinking for 30 years.

Point of view

Mercantilist point of view of concerning protectionism

In the mercantilists the role of the foreign trade is to allow the monetary profit, i.e. the inflow of gold. Accordingly, the mercantilists recommend a political volunteer of support for exports via the creation of large companies of trade or great manufactures. On the contrary the State must try to slow down the imports which are synonymous with gold exits.

For Jean-Baptiste Colbert, “the companies of trade are the armies of the king, and manufactures are its reserves”. The objective of its “armies” and to push back the foreign “armies”. Thus to underline this hatred of the foreign trade, Antoine de Montchrestien declares:

“The foreign merchants are as pumps which draw out of the kingdom the pure substance of our people; in fact leeches stick to this large body of France, draw its best blood and gorge themselves some”

Logic mercantilist rests on the idea that the richness is founded only on the held volume of noble metals, and that consequently, this volume being defined, the trade is with play with null sum. The enrichment of a State by its exports can be done only by the impoverishment of another by its imports.

Liberal point of view

The liberal economists , since the Richness of the nations of Adam Smith (1776), criticized much the protectionist theories of the mercantilists. According to the liberals, protectionism is a intellectual Imposture which is only used to support lobbys at the expense of the greatest number and the public property. To see for example the economic Sophisms of Frederic Bastiat (1845), of which the seventh, the Petition of the manufacturers of candles.

The international business which can be seen in the majority of the situations like a agreement Gain-gaining, the installation of protectionist measurements will decrease the total wellbeing. For example, the majority of the economic historians regard that the Grande Depression was worsened by the protectionist measurements installation in the years 1930, as the Loi Hawley-Smoot.

Other liberals, such Friedrich List, regard protectionism as necessary in the short run initiating the development of an economy. The Libre-échange would be then right only between comparable country of economic power. A country, having once caught up with the level of the others, will be able to pass to a system of free trade which remains the objective of long run. He explains:

“Protectionism is our way, free trade is our goal.”

The liberal point of view bases its analysis on several arguments in favor of the international insertion whose protection is beneficial for the emergent industries. Indeed, industries in childhood (emergent industries) are not adapted to the international market (accoutumence of the labor, optimal level of production, optimal tariffing…)For that, they profit from a " time of adaptation" who will allow them to develop their competitiveness i.e. to pass from a comparative Avantage potential to a real comparative advantage (within the meaning of David Ricardo). The emergent industries thus will be protected from international competition in order to develop a productive system in correlation with the worldwide market taking into account the constraint of price and external production. So that the transition is effective several conditions must be joined together: the passage of a potential comparative advantage to a real comparative advantage must be carried out, protection must be temporary and the opening to competition must be realized at the convenient period i.e. when the firm becomes competitive (when the price of the goods that it provided are higher has its production costs =bénéfices). This constitutes one of the liberal arguments at the national level. Other arguments like that of declining industry, the income, employment or of the internal distortions explain the liberal thought as regards protectionism.

Point of view of the altermondalists

According to some altermondialists taking again the theories of the economist Friedrich List, the developed Pays initially built their industry by using protectionism, then once their economies become largely higher than those of the countries of the Tiers-monde, they opened their borders in order to profit from the reciprocity, which enables them to prevent the emergence of competitors and to acquire raw materials with lower costs. Since the third world cannot profit from the protectionism which allowed the emergence of the powerful economies, there is condemned to remain underdeveloped.

Point of view of the nationalists

Others, near to the Nationalisme anti-mondialiste, advance that the developed countries would be threatened by the emergent Pays and should be protected some under pretext that those would have better production costs in certain types of activity.

Conclusion

The analyzes seeking to justify or condemn protectionism are complex. The majority of the countries have recourse to mixed policies according to the sectors, privileging free trade sometimes when they profit from an absolute advantage on certain products and sometimes protectionism when the sector is still under development.

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