Free Trade vs Protectionism

[Gustaf]

The correct short answer is that free trade is good and the way to go.

Once you study it more in-depth there is, of course, a longer somewhat more complicated answer butit is still roughly the same.

Trade restrictions can really only be argued as a special interest position and under the assumption of unequal power distribution, which is hard to justify on principle (it basically amounts to "me screwing you over because I can")

[Gustaf]

Free trade does little but flood the markets with cheap foreign goods that harm industry and encourage over consumption. Protectionism is a more acceptable economic model as it has a clear micro-economic benefit which offsets the cost. Furthermore, a proper protectionist system would allow us to replace the income and corporate taxes with a tariff-based revenue system - putting even more money back into local economies that are now operating on a level playing field.

What is this clear micro-economic benefit?

[Gustaf]

Between nations who have reached a comparable level of economic progress, free trade should usually be the way to go.

Under different conditions, free trade can be a desaster.
"Free trade" between Germany/USA/Britain and Sierra Leone/Malawi/Angola is, of course, not trade, but an economic massacre.
The African countries desperately need tariffs to be save from European products that flood their markets, but, sadly, IWF/WTO usually don't allow them to enforce such tariffs.

Why is it an "economic massacre"? If it is, how come the Western manufacturing and farming industries are complaining so much?

[Gustaf]

Why is it an "economic massacre"? If it is, how come the Western manufacturing and farming industries are complaining so much?

Because complaining is part of business. Especially if you're a farmer, but also if your a businessman in general.

I call it an economic massacre when we sell parts if our chicken to western Africa so cheap that it destroys their own agricultural market, which is the only sector they have that may be competitive in the near future on the world market. But they need to improve it first, what they can't when they are flooded with our agricultural goods. Therefor, tariffs would help them.

But...that's only happens because we heavily subsidize our agricultural sector. Congratulations, you just made the argument for free trade for me!

If you think it is realistic for protectionism to apply only to poor countries but not to rich and powerful ones I'm not sure where you're coming from...

[Gustaf]

But...that's only happens because we heavily subsidize our agricultural sector. Congratulations, you just made the argument for free trade for me!

Fair enough.

I'*m pretty sure though, that even without any subsidies our industrie and agriculture will compete the third world into the ground.

But at the very last, third world countries should be allowed to implement tariffs as long as the EU and the US subsidize their agriculture. You should agree with that?

Why would they out-compete the third world?

As for the second point, I guess any country is allowed to do whatever. But since the tariff hurts the country itself it's a bit silly and I think overall free trade would be a better solution.