History of Protectionism in the 20th Century

Page Summary

History of Protectionism in the 20th Century

 

Opinions and Evidence - Although import tariffs have declined in the 20th century, nontariff barriers to international trade have proliferated. Despite resultant harm to consumers and other users of protected products that outweighs benefits to protected industries, these trade barriers remain politically viable because of stronger incentives for political action by concentrated interest groups than by individual citizens.

Outline

  1. Gains from trade: the economic model

  2. Statutory authority and historical experience

    1. Tariffs
      1. The Smoot-Hawley Act of 1930 and its aftermath
      2. Duties on imports to equalize differences in production costs (first authorized in Tariff Act of 1922)
      3. Reductions in tariffs under GATT (the General Agreement on Tariffs and Trade, 1947 - 1994)

    2. The rise of nontariff barriers
      1. Quotas
      2. "Antidumping" and "countervailing" duties (1916 - present)
        1. Acrylic sweaters
        2. Flat panel display screens for laptop computers
        3. Semiconductors (DRAMs)
      3. "Orderly marketing agreements" (OMAs) and "voluntary export restraints" (VERs)
        1. Reciprocal Trade Agreements Act of 1934
        2. Trade Expansion Act of 1962
        3. Trade Act of 1974
        4. Trade and Tariff Act of 1984
        5. Omnibus Trade and Competitiveness Act of 1988
      4. Domestic content requirements
      5. Government procurement policies: Buy American Act of 1933

    3. Regional economic integration
      1. Internal versus external effects
      2. The North American Free Trade Agreement (NAFTA, 1993)--U.S., Canada, Mexico

  3. The political economy of trade barriers