Free trade is a policy embraced by countries internationally that allows for unrestricted imports and exports to and from other countries. The World Trade Organization is an international body mandated with regulating and the global rules of trade between nations. This organization officially commenced its operation under the Marrakesh Agreement with the sole purpose of controlling international trade in the supposed liberal market (McGovern, 2017). The essential principles of free trade are trade without discrimination, freer trade gradually through negotiation and predictability through transparency and binding (“Principles of the Trading System”, 2017). However, individual states impose protectionist policies in the liberal market to limit the free trade of goods and services. In this aspect, protectionism is the restraining of trade between nations.
The motivations of this protectionist behavior are national security, protecting employment opportunities, protecting consumers from unsafe products, and revenue among others (Pevehouse & Goldstein, 2016). Individual states must ascertain and maintain their survival by ensuring that they have a comparative advantage in the production of certain goods over other countries. For example, The United States has protection policies in the production of agricultural products and steel industries to remain viable and strategically important in the times of war or crisis (Pevehouse & Goldstein, 2016).
Protectionist policies are used to protect jobs; states have a responsibility of minimizing the level of unemployment. Nowadays, it is common to see countries prohibiting and reducing the importation of specific products or services to increase production in their state leading to job opportunities (Davis & Pelc, 2017). States also impose protectionist policies to increase their sources of revenue by expanding their tax base. States can also impose tariffs on foreign goods (Pevehouse & Goldstein, 2016). This practice is common in developing countries in the Asian and African countries. States have to protect its consumers from unsafe products or services. Through protectionist policies, governments guarantee the customers of the safety of the products and services (Pevehouse & Goldstein, 2016). Recently, the EU banned US beef & dairy products claiming that the cattle have been injected with hormones rendering them unhealthy and unfit.
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- Davis, C. L., & Pelc, K. J. (2017). Cooperation in Hard Times: Self-Restraint of Trade Protection. Journal of Conflict Resolution, 61(2), 398-429.
- McGovern, E. (2017). International trade regulation (Vol. 2). Globefield Press.
- Principles of the Trading System. (2017). WTO.org. Retrieved 12 December 2017, from https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm
- Pevehouse, J., & Goldstein, J. (2016). International Relations (11th ed.). London: Pearson.