6/7/2018 Protectionism (1)


Protectionism (1)
President Trump’s trade policy is likely to exert a dangerous influence on international trade. Although I disagree with his protectionism, I do not think the principle of free trade is desirable to humankind. It has two serious defects.
The first is that it assumes all production plans can be adjusted without costs. It claims that if country A’s wine production has become competitively weaker than country B’s, country A should produce something else. Such a change of production plan incurs enormous costs which are ignored by that principle.
              The second defect is that it ignores national security. International trade can be and actually has been used to threaten foreign countries or put them in a subordinate position by suggesting restriction of export of indispensable products. USA invoked oil and iron embargoes against Japan to induce the ‘Pacific War.’ It has used trade quite strategically. China invoked rare metal embargoes a few years ago. A defect of free trade is that embargoes can be imposed strategically.
              On the other hand, USA demanded voluntary restraints on car exports from Japan in the 1980s. Japan has produced many cars in the USA since then. The US import tax on cars being considered now is nothing but Trump’s egoism and has nothing to do with national security.
              It is quite shameful that a country like USA whose fundamental principle is freedom demands voluntary restraints on exports from foreign countries and production within its territory to protect its employment and avoid reduction in its GDP.
              It is obvious that the principle of free trade has been used expediently in history.

Comments and questions are welcome.
Kazuhiro Arai’s English twitter:       　https://twitter.com/araikazuhiroe88
Kazuhiro Arai’s Japanese twitter:　     https://twitter.com/araikazuhiro88
Kazuhiro Arai’s Japanese blog:         https://araikazuhiro.blogspot.jp/
Kazuhiro Arai’s Japanese home page:   http://araikazuhiro.world.coocan.jp/






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