Superprotectionism Trade Theory
Superprotectionism is a trade theory that advocates for the pursuit of import restrictions and other protectionism measures to enable domestic businesses to gain competitive advantages over foreign competitors. Generally, superprotectionism is pursued in order to achieve national goals, such as promoting economic growth, preserving jobs, and protecting industries. This trade theory is controversial, however, as protectionist policies can lead to retaliatory actions from other countries and can be seen as a violation of free trade agreements.
The concept of superprotectionism was first advanced by economist John Maynard Keynes in his book The Economic Consequences of the Peace. This analysis postulated the idea of promoting domestic industry through tariffs, subsidies, and quotas to encourage the growth of local markets. In more recent times, it has been an especially popular concept among less-developed countries, who rely heavily on domestic production for their export revenues.
Superprotectionism theories are based on the belief that the nation should protect its domestic businesses from external competition. By imposing restrictions on imports, the government can artificially raise the cost of foreign goods and services, allowing local producers to sell their goods and services at lower prices. This is thought to promote economic growth, create jobs, and protect domestic industries.
Superprotectionist policies can also be used to promote a certain sector or industry. For example, governments can use superprotectionism to promote domestic industries situated in more rural areas, in order to increase regional investment and development.
While superprotectionism can be seen as a way to promote domestic industries, it can also produce several potential drawbacks. Opposition to the theory of superprotectionism is based on the premise that market distortions would be created through tariffs and quotas, which would ultimately drive up the cost of goods and services to consumers. By artificially raising the price of imported goods and services, governments would restrict consumer choice and reduce the competitive pressure which leads to innovation. This could have a negative effect on economic efficiency.
Another problem associated with superprotectionism is the potential for foreign retaliation. By imposing high tariffs, other countries may retaliate with their own trade barriers, restricting exports and blocking access to their markets. This could have a noticeable effect on economic growth and job creation in the country seen to be ‘protectionist’.
A final problem with superprotectionism lies in the potential for abuse by governments. By artificially raising the price of foreign goods, governments may be influenced by powerful vested interests that could gain considerable profits at the expense of ordinary consumers.
Overall, the concept of superprotectionism has both proponents and opponents, depending on which objectives are pursued and how they are implemented. While there are potential benefits, such as promoting economic growth, preserving jobs, and protecting domestic industries, there are also potential drawbacks, such as market distortions, possible retaliation, and the potential for abuse and market manipulation. As governments seek to balance the concerns of both domestic and foreign industries, and to ensure access to the global market, more research will be necessary to determine the potential risks and benefits associated with the application of superprotectionism.
