FTW Pick: Import protection could derail export trade
5 Dec 2017 - by Adele Mackenzie
Each dollar of increased import protection leads to a drop of US$.66 in gross domestic product (GDP), according to research published last month by the Organisation for Economic Co-operation and Development (OECD).
Therefore, despite pressure by producers, governments should resist calls for protectionism and instead pursue further trade liberalisation as direct trade restricting measures have the most negative effects on economic growth and employment.
“In the face of concerns over unemployment and recession, governments are coming under increasing pressure to implement protectionist policies and measures – including tariffs, quotas and various forms of subsidies – as a way of ‘saving’ domestic jobs and enterprises,” explained Ken Ash, trade director at the OECD.