Protectionism is defined as the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow fair competition between imports and goods and services produced domestically. Those economic policies get their success back during unfavorable economic times – recessions or crisis. The most evident application of protectionism in order to respond a difficult economic situation has been recorded as a response to the 1929 financial crisis. In fact, during the 1930s, in the most developed and influential countries at the time (USA and European countries) have started imposing duties and taxation on imports, aiming to restore job losses and GDP collapse deriving from the crisis. This call for protectionism resulted in a worsening of the world situation, which eventually led to the Great Depression. The sharp global economic downturn in 2008-09 and the protracted weakness of the global economy have nurtured fears that governments might resort to trade protectionism in order to support their economies by sheltering them from foreign competition. This fear of a rise in protectionism is well founded given the overwhelming empirical evidence for the time period prior to the financial crisis, showing that governments were more likely to erect trade barriers whenever their economies experienced recessions and/or losses in competitiveness As an aftermath of the recent global economic and financial crisis, the incidences of widespread protectionism were manifested around the world, even though not to the extent of 1930s, thanks to the more integrated global economy. The main reason why governments are still launching those protectionist policies – even knowing there have been historical failures – is that it is normally the most common and widely accepted response for people loosing money and jobs due to international...
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