Trade vs. Protectionism
Arjan Chhatwal Poli 305/4
ID: 6178332 International Political Economy Prof. E. Bloodgood
Trade vs. Protectionism
Trade between countries has been going on for centuries. Movement of goods and services began as a mean for nations to obtain what they couldn’t produce themselves. With the introduction of Ricardo’s “comparative advantage” – which illustrated how all countries that participate in trade benefit from it-, trade began to focus on what a country is better at producing a product or a service and which country can produce it at a lower cost. Nowadays, developed countries and international organization promote free trade, open borders, and liberalization of the market intensively. However, many of those core countries also practice protectionism in order to shield their industry from foreign competition. This poses a great problem to developing countries which are forced by core countries to practice free trade but would actually benefit from protectionist measures.
In order to represent this situation, I will analyze the economic situation of two countries with very different economies: Pakistan, representing the developing countries and the United States, which represent the developed countries. I will compare their economic situation and policies under the Bush administration and Musharaf’s government. In this essay, I will demonstrate that our international economic system is very hypocritical in the sense that the countries that would benefit from and help other countries by practicing free trade are practicing protectionism, and those who would benefit from protectionism are forced to implement free trade policies.
First, I will observe and describe those two main economic policies: protectionism and free trade. Then I will concentrate on the economic situation in Pakistan and the United States in order to illustrate what use
ID: 6178332 International Political Economy Prof. E. Bloodgood
Trade vs. Protectionism
Trade between countries has been going on for centuries. Movement of goods and services began as a mean for nations to obtain what they couldn’t produce themselves. With the introduction of Ricardo’s “comparative advantage” – which illustrated how all countries that participate in trade benefit from it-, trade began to focus on what a country is better at producing a product or a service and which country can produce it at a lower cost. Nowadays, developed countries and international organization promote free trade, open borders, and liberalization of the market intensively. However, many of those core countries also practice protectionism in order to shield their industry from foreign competition. This poses a great problem to developing countries which are forced by core countries to practice free trade but would actually benefit from protectionist measures.
In order to represent this situation, I will analyze the economic situation of two countries with very different economies: Pakistan, representing the developing countries and the United States, which represent the developed countries. I will compare their economic situation and policies under the Bush administration and Musharaf’s government. In this essay, I will demonstrate that our international economic system is very hypocritical in the sense that the countries that would benefit from and help other countries by practicing free trade are practicing protectionism, and those who would benefit from protectionism are forced to implement free trade policies.
First, I will observe and describe those two main economic policies: protectionism and free trade. Then I will concentrate on the economic situation in Pakistan and the United States in order to illustrate what use
Bibliography: • Bhagwati, Jaqdish, Free Trade Today, Jew Jersey: Princeton University Press, 2002. • Krugman, Paul, “The Rove Doctrine”, New York Times, June 11th, 2002. . • Maddison, Angus, Explaining the economic performance of nations : essays in time and space, England: Brookfield, 1995. • Miller, Henri, Free Trade versus Protectionism, New York: Wilson, 1996. • Shaik, Anwar, Globalization and the Myths of Free Trade: History, Theory, and Empirical Evidence, London: Routledge, 2007. • Smith, J.W., Economic Democracy: The Political Struggle for the 21st Century, 4th Edition, USA: The Institute for Economic Democracy (IED), 2005. • Jorgenson, Dale W. and all, A New Architecture for the U.S. National Accounts, National Bureau of Economic Research Studies in Income and Wealth, United States: University Of Chicago Press, July 3, 2006.[pic][pic][pic] ----------------------- [1] Smith, J.W., Economic Democracy: The Political Struggle for the 21st Century, 4th Edition, USA: The Institute for Economic Democracy (IED), 2005. [4] Krugman, Paul, “The Rove Doctrine”, New York Times, June 11th, 2002. . [11] Maddison, Angus, Explaining the economic performance of nations : essays in time and space, England: Brookfield, 1995.