The Forces Behind Protectionism (The Determinants of Protectionism)

The Forces Behind Protectionism
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The Forces Behind Protectionism (The Determinants of Protectionism)
The concept of protectionism refers to the imposition of trade barriers to decrease imports and increase exports (Dembour & Stammers, 2018). In the modern world, the concept of free trade has become popular, and countries are encouraged to practice it. Despite this phenomenon, trade protectionism is still popular in many jurisdictions. There are several determinants for protectionism. One such determinant is the need to protect sunrise industries. Sunrise industries are also referred to as infant industries and mainly refer to new entrants into the market. Such companies may receive trade protectionism when they are involved in the production of special commodities or services.
A great example would be an entrant that aims to be involved in new technologies. If not protected, such companies may face stiff competition from the technology giants leading to failure. Therefore, the government sees the need to provide some trade barriers to prevent such competition. Later, these barriers may be lifted when the company is well established, leaving the company to favorably compete with other players. Consequently, one of the major determinants of trade protectionism is the need to protect budding industries from becoming extinct.
The second determinant of trade protectionism in contemporary society is the need to protect non-renewable resources. Over the years, governments and other players have slowly but surely realized that non-renewable sources of energy such as oil are not sustainable. The use of such forms of energy affects the environment negatively and has greatly contributed to such ills as global warming. Therefore, to help protect the environment, governments are imposing trade barriers on non-renewable sources while offering subsidies to the companies dealing with renewable sources of energy. The trade restrictions on non-renewable sources are aimed at protecting the environment and encouraging the use of renewable sources of energy since they are sustainable. These trade restrictions are very common, especially...