Economic Protectionist State Policy: An Analysis of Its Enduring Practices in the Contemporary International Trade Relations

Abstract

State protectionism in international trade relations has gained momentum and impacted global trade flows. The negative repercussion is inevitable as it contributes to the global economic downturn and slow global economic growth. The global economic rebound is expected to have occurred, still, it faces a magnificent impediment to being realized. Many major economies - including the US, China, Japan, and EU- which glorify the importance of free trade to raise global prosperity are even leading in exerting protectionist policy in their trade relations and thus influencing the increasing global trend of its practices. This article thus orients to investigate the root causes behind the increasing practices of state protectionism, which have negative consequences and endure slow global economic growth, by raising the issue of “why does protectionism still exist despite being criticized as suboptimal compared to free trade?”. In investigating this issue, this article employs the theoretical approach of state protectionism and instigate three main proposition based on it. This article argues that the enduring state protectionism is mainly caused by WTO's diminishing credibility in the world trade governance, the global financial crisis (GFC) 2008 occurrence, and the US rising anti-trade rhetoric that induced the domino effect of economic populism and protectionism. This article will proceed as follows. It will detail the background of contemporary state protectionism and briefly review the state protectionism theoretical approach. Eventually, it will analyze the fundamental causes behind the enduring state protectionist approach in contemporary international trade relations.