What is Protectionism?
Protectionism is an inward-looking policy of a nation that seeks to restrain trade relations with other nations via economic measures like introducing tariffs on imports and other government regulations.
WTO report says in first half of 2018, major G20 countries imposed 39 restrictions on trade.
Various ways of protectionism-
It is listed by Economist Jagdish Bhagwati.
• Tariff barriers and import quotas
• Export subsidies
• anti-dumpimg duty legislations
• exchange rate manipulations
• non-Tariff barriers like IPR, environmental issues, quality, issue of child labour, etc.
Impact of Protectionism-
• Immigration and visa regime
• Diaspora in fear
• Outsourcing affected service sector
• Impact on investment
• Loss of jobs
• Fall in exports
• Failure of multilateral forums like UN and WTO
Reasons for rise in Protectionism –
• Fear of local people losing out since Asian countries are taking over jobs. Brexit and USA are examples.
• Realization that orgs like WTO have failed their purpose of facilitating reduction in tariff barriers.
• Rise of right ideology that deals with nationalism and protection of local interest.
• It can also be seen as a failure of moderates due to which a reactionary right has risen.
Protectionism policy in india
India is not protectionist since it is one of the most open economies. Example of FDI and FII. But impact of protectionism will be seen mainly in IT industry. However, world cannot risk to ignore India because it is a huge market with an ever increasing demand.