Protectionist Trade Policies Research Articles

Development and Promotion Countermeasures for Export Growth of Pakistan Textile Products

Pakistan's textile industry is vital to GDP, employment, and exports. Pakistan is strategically located in the global textiles and apparel market due to its large production and export capabilities. This sector struggles with inconsistent product quality, market barriers, high global standards, and protectionist trade policies in wealthy nations. Addressing these issues is essential for industry growth and global competitiveness. This study identifies these challenges and proposes strategic solutions to improve export performance and global competitiveness to boost Pakistan's textile sector's economic stability and growth. A thorough mixed-methods strategy integrating qualitative and quantitative research methodologies was employed in the study. By conducting surveys by websites and literature reviews related to the industry, we were able to gather primary data. We also used secondary sources such as government reports, trade journals, and trade organizations to compile our data. We used quantitative analyses in our study to determine how spending on R&D, technology upgrades, and quality control affected export performance. We looked at energy consumption, production, waste management, and export amounts in various industries of Pakistan. Improving export performance and meeting international standards requires investments in quality control, technology upgrades, and research and development, according to the study. It also lists the obstacles to entering certain markets and suggests ways to overcome them, such as through government assistance, sustainable practices, and vocational education and training. If Pakistan's textile industry follows these suggestions, it will become more competitive internationally.

AN ASSESSMENT OF THE IMPACT OF BORDER CLOSURE BY THE NIGERIA GOVERNMENT ON REGIONAL INTEGRATION IN THE WEST AFRICA REGION

Abstract
 Nigeria is the acclaimed giant of Africa in specific ramifications. The country is bordered by four African countries namely Cameroon, Chad, Benin, and Niger, and emphatically the hub-nub of economic survival of many African nations such as Togo and Ghana. However, Nigeria’s government recently announced the closure of its borders with these neighboring countries albeit, temporarily, and cited illegal importation of goods and services from these countries which has a consequential damaging effect on her economy. This paper interrogates the reasons and consequences of Nigeria’s Government’s action on border relations with neighboring countries. Adopting the descriptive design method, the research work relied heavily on secondary sources of data collection. Proximate stakeholders such as importers and exporters, Nigerian farmers, and relevant government agencies on border control were also interacted with. Using protectionist theory to analyze trends of actions, the theory argues that protectionist trade policies will always lead to an improved economic result. Findings reveal that despite short-run socio-political and economic gains, protectionism negates the principle of globalization and free trade principles which both the Economic Community of West African States(ECOWAS) and Africa Union(AU) promote among its member states including Nigeria that are signatories to the free trade protocols. The paper recommends among others, that the Nigeria Government should address her internal challenges within its border security apparatus to avert the double jeopardy of violating border relations principles and creating a trade war with her neighbors

Free Trade‐Populism and Nativist‐Protectionism: Trade Policy and the Sweden Democrats

The past three decades have seen the entry and increased influence of radical right parties into the European party landscape. These parties harness disaffection with the status quo by appealing to nativist or authoritarian tendencies in the electorate. Their policies often center around the protection of the “common man” from foreign or elite forces (particularly, cultural and economic globalization) and their emergence has been linked to decreasing support for globalization—the so-called “globalization backlash.” Several authors note that although radical right parties advocate economic protectionism to attract voters, who are disaffected by globalization, they say little about how this is manifested in advocacy of concrete policy measures. This speaks to the need for more systematic study of the trade policies of radical right parties. This article studies the Swedish radical right party, the Sweden Democrats (ostensibly free traders), to advance an argument based on the core ideology of radical right parties, nativism, and populism. In doing so, the article contributes to the literature that stresses cultural rather than economic foundations for opposition to globalization. Moreover, this article widens the definition of protectionism from that germane to the literature on radical right parties to include non-tariff barriers to trade (in addition to tariffs and quotas), providing a more up-to-date and multifaceted account of the range of trade policy instruments that radical right parties may advocate. I find that populism inspires advocacy of liberal trade policies, while nativism inspires protectionist trade policies. Protectionism almost exclusively consists of non-tariff barriers.

Let Us Halt the Resurgence of Protectionism: Trade Openness, Innovation Ecosystem, and Workforce Diversity in the Knowledge-Based Economy

Protectionist economies impede the free flow of capital and labor across national and corporate borders, which limits the production, access, and diffusion of knowledge required to create novel solutions. However, further investigation is needed into the knowledge and innovation pathways/mechanisms to stop or at least reduce protectionist trade policies in order to stimulate the innovation ecosystem and develop a diverse workforce. Through a sequential mediation of venture capital and collaborations, our study investigates the relationship between trade openness and workforce diversity by adopting the knowledge-based view and building on the four pillars of the knowledge-based economy. Utilizing archived data, our analysis verified this connection. The theoretical and practical implications are also discussed.

Loss Aversion and Protectionism

The concept of loss aversion in behavior economics was proposed by Kahneman and Tversky in 1979 with the famous prospect theory. Loss aversion is a cognitive bias suggesting that an avoidance of loss is preferred by people than an equivalent gain. The impact of loss aversion is profound in multiple areas of human life, including economics, society, politics, media, etc. This study aims to investigate the relation between loss aversion and trade policies, in particular, the implementation of protectionist trade policies. Literatures in the area of political economics about trade policy are reviewed. The Grossman-Helpman model, which predicts a set of determinants of trade policy, is discussed. Three empirical studies the U.S. steel industry, the U.S. Section 301 proceedings, and the Chinese cotton industry as well as the influence of loss aversion in each case, are analyzed and discussed in detail. Overall, the study draws its conclusion based on previous literatures and empirical studies, and it further confirms that loss aversion would lead to a risk-averse behavior of policy makers by reviewing empirical cases.

International trade: Smarten up to talk the talk

AbstractInternational trade is currently under fire from many sides. Protectionist trade policies are on the rise, putting an end to the decade‐long March of free trade. Making sense of the daily headlines and having an informed opinion on your own has rarely been more important than it is now. Our work aims to explain the driving forces behind international trade, its history, how it shaped the world, its economic models, issues ranging from job losses to the environment and why buying local often makes no sense. We summarize the most important academic literature on these topics in a non‐technical, educational manner. If the reader feels enabled to form their own views on the pros and cons of international trade and that they can ‘talk the talk’, our effort has been fruitful.

PROTECTIONISM IN CONDITIONS OF WORLD TRADE MULTIPOLARITY

In terms of the formation of the world trade multipolar system, the issues concerning the implementation of a protectionist trade policy appear especially acute and are the primary focus of both theorists and practitioners. This paper primarily aims to explore trade protectionism in the global economy in conditions of multipolarity, to identify the vectors of the war in Ukraine's influence on policy in the sphere of food trade, to determine the origins of the WTO crisis in the system of multilateral regulation of international trade and to assess the prospects of further ensuring free trade doctrines, which is based on combinatorial approach and included the calculation of quantitative indicators of foreign trade restrictiveness and estimation of qualitative parameters of shifts in foreign trade policy. The empirical findings indicate high dynamism of increasing new trade restrictions, in particular export ones, caused at first by the COVID-19 pandemic and later by the war in Ukraine; slow but constant increase in import restrictions, so that at the end of 2022 9% of global import was affected by import restrictions; growth in export restrictive measures on food, feed and fertilizers as a response to food security challenges, caused by the war in Ukraine. The current paper reveals the necessity to take into account import dependence indicators and import capacity of export in formulating vectors of transformation of foreign trade policy towards national production support in the context of economic nationalism ideology. The authors emphasize the importance of the WTO dispute settlement system and the failures in its implementation call into question the possibility of organization functioning in the existing format, particularly as the number and spread of RTAs surged. Prospects for further research in this area are the assessment of macroeconomic effects and threats of the unilateral opening of the Ukrainian economy for imports against the background of the protectionist policy of "main players" of the world economy, determination of the potential of the protectionist policy of selective types of economic activity implementation in the conditions of post-war recovery.

Do Women Make More Protectionist Trade Policy?

Women have more protectionist trade preferences than men do. We assess whether this well-documented relationship between gender and protectionism in the mass public carries over into a relationship between women’s political representation and (a) party platforms, and (b) governments’ trade policy choices. Looking across countries and over time, we demonstrate that with an increase in women’s representation, political party trade policy positions become more protectionist. For government trade policy choices, we identify more nuanced results. The protectionist effect of women’s representation is limited to the most visible products: consumption goods. Women’s representation has no effect on intermediate inputs, where firm demands for trade liberalization are more pronounced and policy makers are thus constrained in implementing a protectionist agenda. These findings contribute to scholarship on the descriptive–substantive representation link, add a new dimension to our understanding of trade politics, and demonstrate the importance of applying a gendered lens to international political economy research.

US Trade Policy With China: Proposing A New Framework for US Economic Competitiveness

Due to the Biden Administration’s decision to uphold a large majority of the Trump administration’s protectionist trade policies, US manufacturing industries are failing to control the market share. This paper explores the proper solutions that need to be taken to restore US competitiveness with China, prioritizing US cooperation with allies and China instead of unwarranted tensions. This paper analyzes the effects of US tariffs on Chinese imported goods on Foreign Direct Investment (FDI) in the US, US Gross Domestic Product (GDP), US manufacturing wages, and overall US manufacturing costs to argue that key US tariffs on Chinese imports should be eliminated. This paper explores the benefits of trade specialization and its effects on the US’s Revealed Comparative Advantage (RCA) to argue that the US should champion free trade policies such as revitalizing the Trans-Pacific Partnership (TPP). Finally, this report recommends that the US kickstart wholesale WTO reforms that change the process by which member states identify as “developing” or “developed” nations, and institute stricter litigation statutes against Chinese WTO violations.

NON-TARIFF DIMENSION OF NEOPROTECTIONISM IN WORLD TRADE IN AGRI-FOOD PRODUCTS

The aim of this paper was to determine the scope of non-tariff measures used in the world agri-food trade in 2020. This study used data of the United Nations Conference on Trade and Development (UNCTAD) and the Global Trade Alert data. Applying the methodology developed by the UNCTAD and the World Trade Organization (WTO) three indexes were established to describe the use of non-tariff measures (NTMs) to trade, i.e., the Frequency Index, the Coverage Ratio and the Prevalence Ratio. The number of trade preferences and trade restrictions used by the largest exporters and importers of agri-food products was also measured. The analysis showed that the scope of use of non-tariff protection measures in world trade in agri-food products is much greater compared to other branches of the economy. In countries implementing a highly protectionist trade policy, such as Brazil, China, India, Indonesia, Canada, the USA and Vietnam, non-tariff instruments were used in relation to all tariff lines and the entire value of import. To the greatest extent, non-tariff protection measures were adopted in the trade of non-processed plant origin products, including cereals, oilseeds and oleaginous fruit, fruit and vegetables, as well as dairy products. Countries most commonly implementing trade restrictions against their partners and, at the same time, at greatest risk of retaliatory actions on their part included EU countries, the USA and China.

Adaptation to transboundary climate risks in trade: Investigating actors and strategies for an emerging challenge

AbstractThere is growing recognition that international trade can transmit climate risks across borders, requiring new forms of and approaches to adaptation. This advanced review synthesizes knowledge on how, by whom and where adaptation actions can be taken in the agriculture and industrial sectors to reduce these transboundary climate risks (TCRs). We find a material difference in the literature on TCRs in agriculture as compared with industrial sectors. Operational and market risks, in particular reductions in food availability, dominate in agriculture, while supply chain and trade‐related risks are highlighted for industry. While the origin of the risk (source) is the primary target of adaptation to agricultural TCRs, the general governance structure, such as UNFCCC and WTO deliberations, are important targets in both sectors. Adaptation at the country of destination and along the trade network is of minor importance in both sectors. Regarding the type of adaptation option, agriculture heavily relies on trade policy, agricultural adaptation, and adaptation planning and coordination, while in industry knowledge creation, research and development, and risk management are seen as essential. Governments and the international community are identified as key actors, complemented by businesses and research as critical players in industry. Some measures, such as protectionist trade policies and irrigation, are controversial as they shift risks across countries and sectors, rather than reduce them. While more research is needed, this review shows that a critical mass of evidence on adaptation to TCRs is beginning to emerge, particularly underscoring the importance of international coordination mechanisms.This article is categorized under: Vulnerability and Adaptation to Climate Change > Institutions for Adaptation Vulnerability and Adaptation to Climate Change > Multilevel and Transnational Climate Change Governance

Labor‐eliminating technology, wage inequality, and trade protectionism

AbstractRapid automation in manufacturing has raised pressing questions in public and policy discourse regarding the effects of labor‐eliminating technical progress in an industry. We address the implications of a labor‐eliminating technology adopted in manufacturing for factor price changes, the skilled–unskilled wage gap, and for trade policies intended to protect workers. Using an otherwise traditional multisector general equilibrium model, we derive the conditions under which a labor‐eliminating technology will be adopted in manufacturing, and show that such a technical change will increase the rate of return on capital, and decrease both skilled and unskilled labor wages. We derive conditions under which wage inequality increases, and most importantly, show that implementing protectionist trade policies in the industry experiencing labor‐eliminating technical progress will, paradoxically, hurt the workers that the policy is meant to protect.

Rice trade policy and productivity: empirical evidence from Nigeria’s Rice sub-sector

Low productivity, modest production and large-scale importation characterize Nigeria’s rice subsector despite government intervention through trade policy measures since independence. Studies on Nigeria’s trade policy and rice productivity are scanty in the literature. Therefore, this study investigated the effect of the country’s rice trade policy on rice productivity from 1961-2017, employing the Vector Error Correction Modeling approach. The results show that protectionist trade policy reduced rice productivity in the short run but was not significant in the long run. Producer price and domestic consumption improved rice productivity in the short run although, the latter reduced productivity in the long run. Similarly, fertilizer consumption and exchange rate reduced productivity in the short run but exchange rate increased productivity in the long run. Thus, government should focus on exchange rate, liberalized trade policy and appropriate fertilizer policy to improve Nigeria’s rice productivity.

Unmaking of a Customs Union: Regional (Dis)integration in the East African Community

AbstractThe Common External Tariff (CET) of the East African Community (EAC) customs union has long been considered the cornerstone of the most successful example of regional integration in Sub-Saharan Africa. In this paper, we assess the implementation of the EAC-CET using a novel dataset of country- and firm-level deviations from the common tariff regime constructed by digitizing information in gazettes published by the Secretariat of the EAC between 2009 and 2019. Employing these data, we present five patterns on EAC tariff policy: (i) increased usage of country-level deviations from the common tariff regime render the EAC-CET less and less ‘common’; (ii) Kenya, Tanzania, and Uganda predominantly use unilateral deviations to increase external protection while Rwanda mostly decreases tariffs; (iii) Kenya, Tanzania, and Uganda increase tariffs for the same classes of products, but target different industries; (iv) unilateral tariff reductions at the country level are mostly used to facilitate access to inputs; (v) data on firm-level exemptions suggest that private sector development in the EAC would benefit from lower tariffs on intermediate inputs. Our findings demonstrate an incipient but clear trend in the EAC away from a communal tariff regime and towards national and more protectionist trade policies.

Do protectionist trade policies integrate domestic markets? Evidence from the Canada-U.S. softwood lumber dispute

We consider the effects of protectionist trade policies on international and domestic market integration, using evidence from the long-standing softwood lumber trade dispute between Canada and the United States. The benefits of trade liberalization are widely acknowledged, including better domestic-to-foreign price transmission due to reduced tariffs and lower trade costs between countries. Yet in recent years we see efforts to protect specific domestic groups, including producers, through a revival of protectionist trade policies. Such policies could improve the domestic price transmission across domestic markets as consumers may seek lower-cost alternatives domestically. We investigate these ideas using a bi-variate three-regime threshold vector error-correction model to examine the spatial price transmission between Canadian and U.S. markets and within U.S. domestic markets. We do that by introducing a structural break at the start of an effective free trade period within our sample. The results suggest that duty-free treatment for imported Canadian softwood lumber substantially lowers the transaction costs between the two nations. Prices are more easily transmitted from the Canadian market to the U.S. at a higher speed, but the speed of price transmission in the reverse direction is not statistically significant. The U.S. domestic market experienced a higher speed of price adjustment across domestic regions prior to the free trade period, which provides evidence that protectionist policies lead to better domestic market integration.

Populism, Protectionism, and Political Instability

Most populist regimes in Latin American countries used trade policy to redistribute income, despite being less efficient than other redistribution schemes such as transfers financed with an income tax. Often, this outcome is attributed to the lack of fiscal capacity in Latin American countries. Instead, we develop a simple political economy game where the populist government may use trade policy to encourage capitalists to invest in the more labor-intensive industry. Since moving capital is costly, those capitalists will support the continuation of the protectionist trade policy even after the populist government falls from power. The populist government may therefore choose to implement the less efficient but politically-sustainable policy instead of the more efficient policy that will be easily overturned after a regime change. Building fiscal capacity does not change the equilibrium. Only a long run commitment to a minimum level of redistribution restores efficiency.

Trade exposure and electoral protectionism: evidence from Japanese politician-level data

This study empirically examines the causal impact of economic shocks of trade on trade policy positions by candidates who run for national elections using politician-level data of Japan during the period from 2009 to 2014. The focus of this research is an examination of how the influence of trade shocks, measured by import competition with China on politicians’ trade policy stance, is related to election pressure. The results revealed that an increase in import exposure deters candidates from supporting trade liberalization, even after considering offset by export exposure. Among other points, this protectionist effect is more pronounced for challengers than for incumbents, and for candidates who run for the Lower House election and are exposed to stronger pressures of elections than those who run for the Upper House election. Taking these findings into account, politicians who face trade shocks tend to appeal to protectionist trade policies as the pressures of elections become stronger.

Import Bans on Products from Forced Labor in the Trump Era

The United States prohibited the imports of five products suspected to be made by forced labor from companies all over the world on 30 September 2019. This article contextualizes these Withhold Release Orders from the perspective of international law and politics. While the Donald Trump Administration's blunt and protectionist trade policy has been widely criticized, this article argues that it might also create an opening to rethink the multilateral trade regime that prioritizes free trade over the abolishment of forced labor.

The Effect of Tariffs on Inventory Performance: The Moderating Role of Supply Base Characteristics

Tariffs have taken a prominent role in the recent news cycle as polititians around the world have increasingly enacted protectionist trade policy in order to incentivize reshoring and local sourcin...

Labor issues and COVID‐19

The COVID‐19 pandemic has prompted Canada and several other countries to impose an economic shutdown to prevent a deadly public health crisis from becoming much deadlier. In the agriculture and food sector, several hundred thousand restaurant workers have lost their jobs. The rise in unemployment, the closing of restaurants and schools, and social distancing have triggered demand reductions for certain commodities and foods and demand increases for others, bringing along changes in demand for inputs including labor. Canadian employers of temporary foreign workers (TFWs) are facing delays and additional constraints in recruiting, but so have US and European employers of TFWs. Rising food security concerns are making protectionist trade policies popular. Domestic and foreign firms may export less and do more foreign direct investment, inducing trade in jobs.