Introduction

Protectionism is an economic policy that restricts the importation of goods from foreign countries through the imposition of tariffs on imported goods in a bid to cut unfair competition from foreign countries. On the other hand, free trade also known as laissez-faire is a policy that does not restrict any importation of foreign produce. Furthermore, the elimination of tariffs in free trade makes the availability of goods easy and cheap for customers. It is essential to look at the advantages of both policies to decide which is better than the other.

Advantages of Protectionism and Free Trade

One merit of protectionism is that it safeguards domestic industries and creates employment because overreliance on imported items hinders the growth of local imminent sectors. Additionally, free trade creates loopholes for the importation of counterfeit goods, which are generally of low or poor quality. Hence, the stringent measures applied in protectionism can assist in maintaining the quality standards of products and services.

On the contrary, many argue that free trade is good for traders and consumers because the elimination of tariffs on goods and services leads to a reduction in prices and increased competition. Furthermore, protectionism can lead to destructive trade wars as each company tries to protect its economy and this will increase the cost and uncertainty of trade in respective countries.

During the American Revolution, economists like Adam Smith advocated for protectionism whose main aim was to protect infant industries. Protectionism is a good policy but should not be implemented on a long term basis because the results can be detrimental to an economy. Similarly, free trade should not be completely free because it can lead to a total collapse of the domestic industry.

Conclusion

Both protectionism and free trade policies are essential in any given economy. They have the power to either increase or reduce a country’s GDP significantly. Given the advantages of both mechanisms, it is prudent for states to strike a balance between the two to ensure maximum benefits to the country.

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