Every state that wants to exist must take care of the economic component of life. One of the most important mechanisms is protectionism.
What is protectionism?
This is the name of the economic protection of the state, which is manifested in the fact that the domestic market of your country is protected from importing foreign goods into it. Export is also encouraged by increasing the competitiveness of products in foreign markets. With a competent policy, this translates into economic growth.
But there is a negative state protectionism. Its importance in the economy can be reversed if you unceremoniously pull the blanket over yourself, as this will provoke retaliatory actions from other countries.
Why is there a protectionism policy?
Its task is to stimulate the development of the national economy, as well as protection from foreign competition using non-tariff methods. When intensifying the process of globalization, it is extremely important to develop an adequate protectionism policy in order to increase the
competitiveness of goods in the domestic and foreign markets. With active and rational actions, the state protectionism policy for the enterprise will allow them to adapt efficiently and quickly to the changing conditions of the development of the world economy.
What does history tell us?
In different periods, state formations constantly changed their areas of economic policy. They moved to
free trade, then to protectionism. True, not a single state
policy of protectionism has ever taken a radical form. So, for an absolutely
open economy, it is necessary that there is a movement of goods, technologies, capital and labor without any restrictions. And this state of affairs has its own nuances, because of which nothing like this was organized. Therefore, absolute state protectionism is something from the realm of fantasy. Now any government regulates the circulation of resources in their country. Despite the fact that declaring the openness of the economy is widespread, they essentially cover up the rather cunning protectionism of state economic interests.
Dilemma
A significant theoretical challenge is the choice: what is better - protectionism or free trade. So, the advantages of the former are that it allows the development of national industry. Freedom of trade boasts that national costs are compared with international ones. And there is no end to the edge of the discussion about what is better.
If we consider the development of this dilemma, it is worth noting that until the beginning of the 70s of the last century the countries of the world gradually switched to supporting free trade and intensified liberalization. But from that moment on, the opposite trend has been recorded. Thus, states are fenced off from others by sophisticated tariffs and various barriers, protecting their economies from foreign competition.
Types of protection
What, then, are different states setting themselves as their goals, turning towards protectionism? On the features allow you to judge the types of protection. In total, there are two of them:
- Real-time protection. It is used to shield industries from foreign competition, which are of strategic importance for the domestic economy (agriculture, military industry), and are of great importance in critical situations (for example, war).
- Temporary protection. It is used in order to enclose the growths that were recently created until they become so stable that they can successfully compete with similar areas of other states.
Appropriate measures may also be taken if trading partners have imposed certain protectionist restrictions on their part. Explicit government protectionism is a measure that almost always entails a response. A kind of solution may be propaganda to buy domestic products without activating any restrictions.
Forms of Protectionism
In what form can it exist? Four forms are distinguished:
- Selective protectionism. Implies protection against a specific product / state.
- Sectoral protectionism. This includes the protection of a certain area of economic life (for example, agriculture).
- Collective protectionism. By this we mean the mutual protection of several countries that have united in an alliance.
- Hidden protectionism. It is understood as protection, during which non-customs methods are used, including those that stimulate the domestic producer.
Modern protectionism
It means non-tariff and customs and tariff restrictions. The main task of the government in the field of international trade is to help exporters sell products on foreign markets by increasing their competitiveness, as well as limiting imports using means to reduce the attractiveness of foreign goods in the country. Moreover, most of the regulatory methods are involved in regulating imports. The rest are boosting exports.
Speaking about tariff restrictions, it should be said that there are only customs duties and quotas. This is all that applies to measures of state protectionism and is not hidden by anyone. All are focused on regulating imports. But non-tariff restrictions apply to measures of state protectionism. It refers to quotas, licensing, public procurement, various requirements for the presence of local components, technical fees, taxes and fees for non-residents, dumping, subsidizing and lending to exports. This implies measures of state protectionism. A number of other less important components also apply to them, but due to the rarity of application and specificity, they will be omitted within the framework of this article. By the way, we can say that the introduction of sanctions against other countries also applies to measures of state protectionism. But this is a specific issue, on which there is no consensus yet.
State protectionism in Russia: current state of affairs and development prospects
Regarding customs and tariff regulation, it should be noted that new technologies are being introduced, which allows for improved administration and monitoring of the situation. In the non-tariff field, there is an increase in the use of specific methods in the management framework. At the same time, there is a focus on the export of high-tech services, goods and technologies.
In the long run, innovation is important. Especially its importance grows with the gradual exhaustion of the effectiveness potential of other factors. Innovation policy should presuppose the creation of conditions under which developing activity and the share of investments will grow, which is aimed at introducing products and technological processes of a new quality. In the final result, this will be of exceptional importance in the matter of improving the quality of life of the population.
Important to meet the needs of people is the support of small and medium-sized businesses. Here you can work to reduce the number of administrative barriers, simplify documentary processes (registration and closure of an enterprise), reduce the list of activities that require a license. Ultimately, it is necessary to strive to create an attractive investment environment. Not least by reducing the total tax burden on business entities. In the meantime, it cannot be said that this aspect relates to measures of state protectionism.