Understanding the Rise of Global Protectionism

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There has been an increase in the use of tariffs, quotas, and other trade barriers throughout the world in recent years to shield native businesses from the threat of foreign competition. Several causes, including the emergence of nationalist and populist groups and the widespread belief that globalisation has been unjust to certain nations and industries, have contributed to this development. Trade, investment, and economic progress throughout the world might all be negatively impacted by protectionist policies. They may result in less competitive nations, increased pricing for consumers, and decreased company efficiency (Beeson & Watson, 2019). Furthermore, nations hit by protectionism may respond with their own measures, starting a trade war that might have negative consequences for the global economy. Protectionism is on the increase, and in order to comprehend this phenomenon, its political, economic, and social underpinnings must be examined. Politicians may resort to protectionism in times of economic instability in order to win support at home and stay in office. The loss of jobs and the decline of whole sectors might be economic reasons that push governments towards protectionism in order to prop up their own domestic businesses (Irwin, 2017). The belief that globalization has led to greater inequality and injustice, especially in poorer nations, might serve as a social catalyst for protectionism. Furthermore, figure: 1 is showing the trend of global average tariff rates and NTBs.

Figure 1: The trend of global average tariff rates and NTBs.

(Source: Cho et al., 2020)

To combat the growth of protectionism, governments and corporations must take a balanced approach, one that takes into account the valid concerns of impacted populations while also advocating for the advantages of international trade and investment. The advantages of globalization should be shared more equitably, and this might be accomplished by policies like encouraging innovation and competitiveness and investing in education and training to enable employees to make the shift to new sectors. Sustainable economic progress and prosperity can only be fostered via a well-rounded strategy that takes into consideration the many different forces that are fueling protectionism. Recent years have seen a rise in protectionist policies throughout the globe, as more and more nations erect tariffs and other trade obstacles to safeguard their home industries. The emergence of nationalist and populist groups, the widespread belief that globalization has been unfair to certain nations and industries, and worries about national security are all elements that have contributed to this tendency. Understanding the development of protectionism is crucial for policymakers, entrepreneurs, and other stakeholders since its effects on the global economy are far-reaching and nuanced (Rodrik, 2018). Therefore this research aims to understand the Rise of Global Protectionism and its overall impact. The issue statement requests research on the causes of protectionism and its effects on international trade. This article will examine the potential effects of protectionist policies on international commerce, investment, and economic development, and will analyze the political, economic, and social factors that contribute to protectionism. To help governments and companies succeed in today’s uncertain economic climate, our research aims to provide light on the dynamics of protectionism and its repercussions.

References

Beeson, M., & Watson, N. (2019). Is international leadership changing hands or disappearing? China and the USA in comparative perspective. Asian Perspective, 43(2), 387-415. https://doi.org/10.1353/apr.2019.0015

Cho, J., Hong, E. K., Yoo, J., & Cheong, I. (2020). The impact of global protectionism on port logistics demand. Sustainability, 12(4), 1444. http://dx.doi.org/10.3390/su12041444

Irwin, D. A. (2017). Clashing over Commerce: A History of US Trade Policy. Chicago: University of Chicago Press.

Rodrik, D. (2018). Straight Talk on Trade: Ideas for a Sane World Economy. Princeton, NJ: Princeton University Press. https://repository.unescap.org/bitstream/handle/20.500.12870/1125/ESCAP-2018-PB-ARTNeT-talk-trade-sane-world-economy-n34.pdf?sequence=1