The persistence of protectionism in a globalized economy
Felix S
Currently, global trade accounts for over 57% of the world’s GDP: 1 a figure that would have been unimaginable only a few decades ago. Such an unprecedented level can be traced to the ever-deepening economic interdependence between nations – a process which economists refer to as globalization . This integration has been hailed as a source of economic prosperity, with the idea of free trade occupying the centre stage. The echoing of comparative advantage , an idea popularized by classical economist David Ricardo, 2 has ensured that nations enjoy the fruits of improved efficiency and lower opportunity cost. So, the thought of one country distorting this success would surely be an irrational deviation from efficiency. Yet, throughout history, such a narrative proves not so simple. Protectionism has not only withstood time but has been a pillar of support for countries going through economic strain or political turmoil. In our modern era, tariffs and sanctions are the protectionist measures that grab media attention; however, quotas, embargoes and more subtle non-tariff barriers are also tools that are available for strategic deployment, 3 shaping markets and controlling power dynamics. This essay will first outline the historical and theoretical case for free trade. It will then discuss how the persistence of protectionist policies is not a rejection of this logic; it is rather a pragmatic response which stems from the internal tensions present in trade and the pursuit of national objectives that supersede economic objectives. We must first explore what makes trade so attractive to all involved parties. Having mentioned David Ricardo, it would be hard to explain the foundations of trade without his theory of comparative advantage . 4 He showed that even if one country is more efficient in the production of two goods, there is an attainable gain from trade when each nation specializes in one good according to their respective advantages in production. In the early 20th century, the Heckscher-Ohlin model followed and showed how trade between countries often relied upon the scarcity of certain factors of production (land, labour, capital, enterprise). 5 For example, a country abundant in capital and land but scarce in labour will produce a good using those plentiful factors, such as grain, since it is relatively cheaper. The opportunity for profit makes that good desirable to export. Similarly, it is beneficial to begin importing a product which takes lots of labour to produce from a country which is abundant in it. A more contemporary idea comes from the American economist Paul Krugman, entitled the New Trade Theory . 6 1 World Bank. Trade (% of GDP). https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS. Consulted: 24/08/25. 2 Montevirgen, K. Comparative advantage. https://www.britannica.com/money/comparative-advantage. Consulted: 24/08/25 . 3 Pettinger, T. Examples and Types of Protectionism. https://www.economicshelp.org/blog/6911/alevel/examples- of-protectionism/ . Consulted: 24/08/25. 4 Montevirgen (note 2). 5 The Editors of Encyclopaedia Britannica. Heckscher-Ohlin theory. https://www.britannica.com/money/Heckscher-Ohlin-theory. Consulted: 24/08/25. 6 Pettinger, T. New Trade Theory. https://www.economicshelp.org/blog/6957/trade/new-trade-theory/. Consulted: 24/08/25.
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