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How Costly Is Protectionism?

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  • Robert C. Feenstra

Abstract

How costly is protectionism? This paper begins from a U.S. perspective, examining the costs to both the U.S. and other countries from U.S. protectionism. It emphasizes that substantial costs are imposed on foreign countries by U.S. protectionism. These costs result from the highly selective nature of protection in particular industries and against particular exporting countries. No discussion of the costs of protection would be complete without mentioning the increasing levels of investment by foreign firms within the U.S. economy. The paper next moves to a more global policy perspective. The emerging free trade areas in Europe, North America, and Asia raise the prospect of gains from trade within each region but also the possibility of global costs from protectionist actions across the regions.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.6.3.159
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 6 (1992)
Issue (Month): 3 (Summer)
Pages: 159-178

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Handle: RePEc:aea:jecper:v:6:y:1992:i:3:p:159-78

Note: DOI: 10.1257/jep.6.3.159
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  1. Feenstra, Robert C, 1988. "Quality Change under Trade Restraints in Japanese Autos," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 131-46, February.
  2. Trela, I. & Whalley, J., 1988. "Do Developing Countries Lose From The Mfa?," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 8804c, University of Western Ontario, The Centre for the Study of International Economic Relations.
  3. Irene Trela & John Whalley, 1991. "Internal Quota Allocation Schemes and the Costs of the MFA," NBER Working Papers 3627, National Bureau of Economic Research, Inc.
  4. J. David Richardson, 1991. "U.S. Trade Policy in the 1980s: Turns -- and Roads Not Taken," NBER Working Papers 3725, National Bureau of Economic Research, Inc.
  5. Kala Krishna, 1985. "Trade Restrictions as Facilitating Practices," NBER Working Papers 1546, National Bureau of Economic Research, Inc.
  6. Anderson, James E, 1985. "The Relative Inefficiency of Quotas: The Cheese Case," American Economic Review, American Economic Association, vol. 75(1), pages 178-90, March.
  7. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
  8. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
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