Topic 4 Background to Protectionism and Liberalisation.ppt

Topic 4 Background to Protectionism and Liberalisation.ppt...

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Topic 4: BACKGROUND TO PROTECTIONISM AND LIBERALIZATION Lecture Notes Prepared by: Dr. Martine Oleche University of Nairobi School of Economics 09/11/18 1 Dr. Martine Oleche, School of Economics, University of Nairobi
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4.1 Protectionism and Liberalism Juxtaposed Protectionism can be defined as an act by which the governments placement of duties or quotas on imports to protect domestic industries from global competition. Protectionism is often referred to as being a barrier to free trade. The word seems to conjure up negative images of isolationism and subsidizing industries that could otherwise not compete fairly against others (This can help indicate why some industries would strongly support protectionism for themselves). Complete deregulation allows corporations to benefit but at the possible expense of people in that nation or region if that deregulation means relaxation of environmental rules, health and educational services including control of natural resources and energy. 09/11/18 Dr. Martine Oleche, School of Economics, University of Nairobi 2
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Protectionism And Liberalism Juxtaposed Contd… This hint at the powerful lure that the “freeing” of trade and liberalization of access to resources from regulation has to some proponents, either seems to answer the notion of fairness. Though, often those nations that promote free trade for all wants protectionism for themselves. 09/11/18 Dr. Martine Oleche, School of Economics, University of Nairobi 3
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4.2 Liberalization A strong reaction against mercantilist attitude began take shape toward the middle of the 18th century. In France, the economist known as physiocrats demanded liberty of production and trade in England, economist Adam Smith demonstrated in his book the wealth of the Nations (1776) the advantages of removing trade restrictions. Economists and businessmen voiced their opposition to excessively high and often prohibitive customs duties and urged the negotiation of trade agreement s with foreign powers. This change in attitudes led to the signing of a number of agreements embodying the new liberal ideas about trade, among them the Anglo-French treaty of 1786, which ended what had been an economic war between the two countries.
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  • Fall '18
  • Dr. Martine Oleche
  • International Trade, University of Nairobi, SCHOOL OF ECONOMICS, Dr. Martine Oleche

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