Protectionism: The Gated Globe

The Economist has called the world full of trade barriers and protectionism, "The Gated Globe", but how bad has protectionism been on some of the world's economies. One man's loss is another man's gain and this same principle applies in economics and there have been some big losers from protectionism. One of the most bizarre tariffs I have read about is by America on Chinese paper clips. Yes, paper clips of all things. The Americans must really love their home made paper clips as they imposed a 127% tariff on Chinese paper clips. But all jokes aside, this is a massive loss for the Chinese paper clip industry as this massive tariff has destroyed their price competitiveness especially against the US paper clip industry. On the other side of the world Japan have imposed a 778% tariff on imported rice, in order to protect their own domestic farmers. The developed economies are protecting their own infant and strategic industries but in all honesty its the emerging economies who need to protect their industries the most and they seem to have realised this. For example, Brazil whose tariff average to approximately quadruple those imposed by America and triple the size of the Chinese tariffs. This has led to the loss of markets for many global economies. 

Imagine a global economy with revitalised firms, increased sales, higher productivity, improved quality and variety of goods and all at low prices. It all sounds too good to be true, but these benefits can be delivered through globalisation. However there is one small word currently in action that is preventing us from reaping these quite useful benefits: Protectionism. In recent years, especially after the global recession in 2008, there has been a mass movement from globalisation to protectionism as many of the world's economies are building up trade barriers in order to protect their domestic industries. Though it may mainly be a cyclical cause, there were signals that prompted this switch in policy from the US and Europe. After disastrous foreign ventures by their banks, regulators in America and Europe have decided that their own financial systems and economy should be prioritised above the global economy. The smaller economies have followed the same procedure as these bigger economies. 

So, do the benefits of protectionism really outweigh the costs of globalisation or have the global economies shot themselves in the foot?