“Protectionism is a very real danger. It is understandable that in times of a severe downturn protectionist pressures mount but the lessons of history are clear. If we give in to protectionistpressures, we will only send the world into a downward spiral”
Protectionism is an economic policy that restrains free trade, using Tariff and Non-Tariff Measures that do not allow the market to workproperly. Exhibit 1 shows a chart of the five countries that were most affected by protectionism measures at 2012 indicating the number of measures applied on them.
The aim of this paper is to analyzethe effect of the Non-Tariff Measures (NTMs) into the free trade and determine if they represent a disguised over protectionism of national industry.
“During the past decades bilateral andmultilateral trade agreements have led to a reduction in tariff-related barriers to global trade. But during the same period the world has experienced a steady rise in the number of non-tariff measures (NTMs)”In fact, there has been a direct proportional relationship between those two barriers of trade; the constant reduction in tariffs accomplished on the several rounds of the World Trade Organization(WTO), and its predecessor, The General Agreement on Tariffs and Trade (GATT), has led governments to look for another mean to restrict imports and promote exports, “protecting national industry”.Exhibit 2 shows a graph of bars of tariffs’ behavior resulting from five rounds of WTO between the years 1947 to 1994. Tariffs have considerably decreased in almost 35 percentage points.
In conclusion,NTMs are not entirely bad when used as non-protectionist policies. On the contrary, the abuse of these measures affects reciprocal free trade as well as national industry.
Governments should considerall the possible effects protectionism
One may think that this increased affected producers who import raw materials, but the government declared that “international payments or transfers for...
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