Anti Dumping and Protectionism

Part II : Protectionism Last year the rapid economic growth in China accompanied by an “open door “ policy on the part of the regime, can be viewed in Western nations as a source of major investment and trading opportunities. However, China 's size and its political complexion can also be interpreted as a potential threat. This fear of China leads to the path of protectionist atmosphere. After a introduction about protectionism, the section II will show that Anti-dumping measure is a protectionist measure. Then, section III will present some theoretical models in favor of free trade. Section IV will examine most common fears about China. Section V will sum up with the necessity of using trade as “economic development aid”. I. Introduction: Protectionism Following Wikipedia, protectionism is the economic policy of restraining or distorting trade between states. This section will define and give European 's example of the most common forms of protectionism. An import tariff is a tax levied on import. It can be “ad valorem” which means a percentage of the price or fixed duties. Since 1947 the GATT ( General Agreement on tariff and trade), thanks to MFN(most favored nation) principle and negotiations, permit to substantially lower this kind of protectionism1. MFN principle means that countries must apply the same tariff for all. However the EU continues using some import tariff as Anti-dumping. For instance the EU have imposed an anti-dumping tariff for China 's and Vietnam 's leather shoes of 16,8 % for Vietnam and 19,4% for China.2 Anti-subsidies “are similar to anti-dumping except they specially correct the trade-distorting effect of WTO-actionable subsidies to foreign producers”3 An imported quota sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. Quotas have the same effects ( as tariffs) on welfare. An example is the quota against textile from 2005 to 2007. 4 Subsidies are a financial assistance paid to