A review of global trade protection

By LI KUNWANG / 10-19-2023 / Chinese Social Sciences Today

History of Global Trade Protection

Trade protection has a long history, spanning from mercantilist thought to the infant industry protection theory, from strategic trade policy to “fair and reciprocal trade.” History of Global Trade Protection, co-authored by Wang Xiaosong, a professor from the School of Economics at Renmin University of China, among others, centers on the history of trade protection in the United States, Europe, and major developing countries, seeking rules and solutions from historical facts.

The authors divide the history of trade protection since the founding of the United States of America into four stages based on its purposes. Each stage presents a comprehensive and systematic description of tariff acts and economic and trade development situations, displaying the underlying logic and decision-making basis of the US trade protection policy. Meanwhile, the book recounts typical cases of trade frictions in detail, striving to summarize the evolution of the US trade protection policy by delineating the scope of conflicts, protective strategies, and the implementation means and outcomes of the US-Japan and US-China trade disputes. US trade protection tends to be institutionalized and stylized. Its underlying logic is rooted in the desire to uphold political system stability and national security.

In the process of the EU trade protection, super-national interest groups, such as industry associations with significant political influence, have played a significant role. The book proceeds from the history of trade protection in major European countries and the integration policy orientation of the European Community and European Union, arguing that the European Community has actively utilized trade policy to exert pressure on the external environment in the process of pursuing internal market integration, so as to achieve the dual goals of unifying and protecting the internal market.

Compared to developed countries, trade protection plays an even more important role in the economic growth of developing countries. During the stage of economic take-off, the majority of developing countries have experienced the transition from “import substitution” to “export orientation.” The process of import substitution is represented by industrialization, and is also the key stage of capital accumulation, productivity improvement, and economic growth acceleration. However, after economic take-off, the disadvantages of trade protection will gradually emerge. To unleash greater development potential, developing countries need to break free from the constraints of trade protectionism and integrate into the world economic system in a more open and inclusive manner.

Developing countries adopt a wide range of trade protection policies with distinct characteristics. India has long embraced protectionism while building a comprehensive industrial system. South Korea has flexibly switched between import substitution and export orientation strategies, facilitating the stable growth of their national economy. The trade protection policies of Mexico and Brazil are significantly affected by the governing style of their leaders, resulting in a higher degree of instability and uncertainty.

Li Kunwang is a professor from the School of Economics at Nankai University.