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International Trade
Arguments for and Against Protectionist Policy
Economics Textbooks Boundless Economics International Trade Arguments for and Against Protectionist Policy
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Concept Version 6
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National Security Argument

National security protectionist arguments pertain to the risk of dependency upon other nations for economic sustainability.

Learning Objective

  • Evaluate the arguments in favor of the use of trade protectionism in the security industry


Key Points

    • Economic interdependence and globalization has resulted in a unique capitalistic system, where each country is largely dependent upon other countries for economic sustainability.
    • It has been noted, somewhat intuitively and empirically, that conflict reduces trade. This highlights the risk of conflict harming an economy.
    • A more specific context for trade and conflict can be the way in which trade is complicated during wartime. Indeed, trade during wartime can be a substantial threat to a nation, as economic levers such as sanctions can be utilized.
    • Iran and North Korea are strong modern examples as well as the recent history of the U.S.-Iraq war. All of these economies struggle(d) against harsh economic sanctions.
    • Combining these ideas, it is clear that there is substantial national security value to trade protectionism.

Terms

  • Self-sufficiency

    Able to provide for oneself independently of others.

  • sanction

    A penalty, or some coercive measure, intended to ensure compliance; especially one adopted by several nations, or by an international body.


Full Text

Economic interdependence and globalization has resulted in a system, where each country is largely dependent upon other countries for economic sustainability (though to varying degrees). This results in a substantial national security threat in the form of conflicting or offensive trade strategies between countries. Indeed, economics is often used directly as a weapon of war and conflict via trade sanctions. This highlights a critical protectionist argument pertaining to the very real risk of dependency upon other nations for economic sustainability.

Trade and Conflict

An interesting discussion in economics is the relationship between trade and conflict. It has been noted, somewhat intuitively and empirically, that conflict reduces trade. However, is it also the case that trade reduces conflict? This question is largely unanswered, although the stances are becoming more highly developed. It is hypothesized that trade does not necessarily reduce conflict, but instead changes the nature of the conflict. Economic levers are much more practical than military levers, and are often used for similar reasons. For this reason, it is difficult to separate trade and conflict completely because there is some critical overlap between the two. This is a fundamental foundation for the trade protectionism logic from a national security perspective.

Trade During Conflict

A more specific context for trade and conflict can be the way in which trade is complicated during wartime. Indeed, trade during wartime can be a substantial threat to a nation depending on the scale and scope of the conflict (most notably who is involved). For example, consider World War II. In this scenario Germany was largely isolated in the conflict, and therefore had extremely limited trade partners. Direct conflict will almost always result in a complete cease in trading not only between the country in which the war is occurring, but also any of that country's allies (who may or may not be directly involved). However, some argue self-sufficiency (via protectionism) in war is not necessary, as friendly nations will still provide trade and economic support.

Sanctions also play a dramatic role as an offensive militaristic maneuver. Iran and North Korea are strong modern examples as well as the recent history of the U.S.-Iraq war. In all of these circumstances, either the U.S. alone or along with a number of allies (representing substantial consumption percentages) actively limited the ability for these countries to trade and generate economic value for their nations (and subsequently their people). While this looks purely economic, it has important social and humanitarian implications as well. The chart makes this case quite clearly, pointing out the death toll in wartime if economic levers are utilized.

Infant Mortality in Iraq During Sactions

This graphic underlines the indirect consequences of employing economic levers (i.e. sanctions) in a militaristic fashion during a conflict. While the justification for these figures is complex, including other war-related factors, the correlation is quite clear. Diminishing a country's economic prospects will in turn result in loss of life, particularly in developing nations.

Protectionism

Combining these ideas, it is clear that there is substantial national security value to trade protectionism. However, the opportunity cost of leveraging the ever-growing global markets make this an unattractive prospect if taken to any extreme, as the benefits of global trade rapidly offset the risk of economic dependency upon hostile nations.

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