Mercantilism and Protectionism Today
Mercantilism and Protectionism Today Introduciton
Mercantilism as one of the first and oldest economic theories, since political economy arose as a science, does not belong just to the past. Mercantilism and protectionism as its policy is very present and actively used even today. Actually, it has never disappeared. The mercantilists preached that countries should always strive to have a trade surplus and avoid trade deficits at all cost. That is partly because they viewed the flow of gold as central to economic well-being. Deficits led to an outflow of gold, which was bad, while surpluses led to an inflow of gold, which was good. This was achieved by protectionist measures, imposing tariffs, quotas, and other commercial policies in order to minimize imports.
We will see that nowdays is not much different. We will see how the World tried to make an effort to relieve itself from protectionist ideology and make the global trade more free and fair - especially after the Second World War, by setting up the plans for the World Bank and the International Monetary Fund. This was embodied in The General Agreements on Trade and Tariffs that were created. Still, even though certain progress has been made, there are many hurdles that maybe never will be overcome. Some countries are not ready to give up defending their fragile industries and become exposed to free trade and thus vulnerable and dependent. We will see the gap between developed and developing nations.
Body In 1944, representatives from forty-four nations met in Bretton Woods, New Hampshire, to make financial arrangements for the postwar world. It was then that the plans for the World Bank and the International Monetary Fund were created, with the General Agreements on Trade and Tariffs created two years later. (Atkinson/2014: 30)
The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. According to its preamble, its purpose was the "substantial
Mercantilism as one of the first and oldest economic theories, since political economy arose as a science, does not belong just to the past. Mercantilism and protectionism as its policy is very present and actively used even today. Actually, it has never disappeared. The mercantilists preached that countries should always strive to have a trade surplus and avoid trade deficits at all cost. That is partly because they viewed the flow of gold as central to economic well-being. Deficits led to an outflow of gold, which was bad, while surpluses led to an inflow of gold, which was good. This was achieved by protectionist measures, imposing tariffs, quotas, and other commercial policies in order to minimize imports.
We will see that nowdays is not much different. We will see how the World tried to make an effort to relieve itself from protectionist ideology and make the global trade more free and fair - especially after the Second World War, by setting up the plans for the World Bank and the International Monetary Fund. This was embodied in The General Agreements on Trade and Tariffs that were created. Still, even though certain progress has been made, there are many hurdles that maybe never will be overcome. Some countries are not ready to give up defending their fragile industries and become exposed to free trade and thus vulnerable and dependent. We will see the gap between developed and developing nations.
Body In 1944, representatives from forty-four nations met in Bretton Woods, New Hampshire, to make financial arrangements for the postwar world. It was then that the plans for the World Bank and the International Monetary Fund were created, with the General Agreements on Trade and Tariffs created two years later. (Atkinson/2014: 30)
The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. According to its preamble, its purpose was the "substantial