Some proponents of “free trade” believe that the economy requires efficiency-enhancing “creative destruction”, and opening up to imports is a good way to achieve this. Despite the appeal of the argument for free trade, no country practices this approach. Hence, the US protects its steel, autos and financial services industry, among others — and heavily subsidises agriculture and the defence sector. Japan protects agriculture, steel etc. South Korea for years protected ship-building, while the European Union has provided hundreds of billions in subsidy to its “inefficient” agriculture. Secondly, reducing the level of protection to domestic industry and agriculture at a time of severe challenges in the form of the internal security situation and the energy crisis of the past seven years, and expecting these sectors to improve their efficiency under such conditions — and in some cases against heavily-subsidised competition — is a recipe for disaster.
Posted on: Fri, 14 Mar 2014 16:29:48 +0000