Trade protectionism is implemented by countries when they believe their industries are being affected negatively by unjust competition. It may be seen as a defensive measure and it is almost always driven by political forces. It may turn successful, especially in the short run. In the long run, however it usually does the opposite of its intentions as it can make the country, and the industries it is trying to look after, not so competitive on the global marketplace. While economic theory suggests, and economic history demonstrates, protectionism’s counter productivity on a global scale, we still believe that economists have a responsibility to defy increasing protectionist pressures by more than just recitationfree trade benefits. The typical protectionist argues that the traditional case for free trade is based on an oversimplified model which is no longer applicable to the real world. These charges are usually based on misconstructions or misinterpretations of the role of assumptions in economic theory. The fundamental illustrations of international trade theory are not necessary conditions for the theory’s conclusions to have real world relevance.

Protectionism is the government’s actions and policies that restrict or restrain international trade, often done with the purpose of protecting local businesses and jobs from foreign competition. Classic methods of protectionism are import tariffs, subsidies, quotas and direct state intervention. The fact that trade protection hurts the economy of the country that enforces it is one of the oldest but still most astonishing understandings economics has to offer. The idea dates back to the beginning of economic science itself, which gave birth to economics, contains the argument for free trade by specializing in production instead of producing everything, nations would profit from free trade. In international economics, it is the direct opposite to the proposition that people within a national economy will all be better off if they specialize at what they do best instead of trying to be self-sufficient.

Current debates and discussions about what kind of trade are good and about how open markets affects economy usually has hypothetical character, or takes place due to the influence of interest groups or subjective reasoning. Recent global economic crisis has caused a big change in ideas and policies against free markets and in favour of government intervention. Regardless, the analysis of trade development allows making simple conclusions which is relevant in the current discussion: countries adopting free trade policy prosper, while closing the markets leads to deficiency and economic slowdown. The main aim of this essay is to analyze if protectionism adopted by many countries, especially European countries can be a valid economic policy and if not, why so. It will look at the European Union and discuss the not so long ago fears of rising protectionism within the EU.

Advantages of protectionism

Protectionism marks an economic theory that emphasizes the minimization of free trade between nations. There are currently a lot of nations that practice economic protectionism; such countries believe that the manufacturing of goods should take place domestically, rather than in a global setting. Generally there are two main types of government control on international trade; tariff and non-tariff. Previously, the main dispute between supporters and opponents of protectionism was focused on the discussion of arguments again and for using tariff as an economic policy instrument. Non-tariff barriers became usual in the last years and many