International Trade Theory and Policy
by Steven M. Suranovic

Trade 120-5

The Economic Case Against Selected Protection

The economic case against selected protectionism does not argue that the arguments for protection are conceptually or theoretically invalid. Indeed, there is general acceptance among economists that free trade is probably not the best policy in terms of maximizing economic efficiency in the real world. Instead the counter-arguments to selected protectionism are based on four broad themes, 1) potential reactions by others in response to one country's protection, 2) the likely presence of superior policies to raise economic efficiency relative to a trade policy, 3) information deficiencies which can inhibit the implementation of appropriate policies, and 4) problems associated with lobbying within democratic political systems. We shall consider each of these issues in turn.

The Potential for Retaliation
The Theory of the 2nd-Best
Information Deficiencies
Political Economy Issues

International Trade Theory and Policy - Chapter 120-5: Last Updated on 7/19/97