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Protectionism is the economic policy of promoting favored
domestic industries through the use of high tariffs and other regulations to discourage imports. Historical
variants of this policy have included mercantilism, a trade policy aimed at
maximizing currency reserves by running large trade surpluses; and
import substitution, a trade policy in which targeted imports
are replaced by local manufactures in order to stimulate local production.
Recent examples of protectionism are typically motivated by the desire to protect the livelihoods of politically powerful
groups, such as farmers in the United States and European Union, who in the
absence of tariffs might be unable to compete with lower-cost foreign producers. In
recent years, there has been a renewed disucssion of protecionism due to offshore outsourcing. Most economists view this form
of protectionism as a disguised transfer payment from consumers (who pay higher prices for food or other protected goods) to local high-cost
producers.
It is the stated policy of most First World countries to eliminate
protectionism through free trade policies enforced by international treaties
and organizations such as the World Trade
Organization. Despite this, many of these countries still maintain tariff barriers to protect some favored industries, and
the elimination of such barriers remains a contentious political and diplomatic issue.
See also: the Candlemakers' petition, a
satire of protectionism.
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