Protectionist measures: what are they?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

For the prosperity of the state and its economy, it is necessary to take care that there are appropriate conditions for development. They can either arise during the planned development of mankind, or be created separately. Here is the last aspect we will consider in this article.

What is protectionism?

This is the name of economic patronage from the state, aimed at the producer within the country. It manifests itself in the protection of the economic sector from competition with foreign goods. It also encourages the export of its competitive products to the foreign market. Protectionist policy measures are aimed at developing the national economy and protecting it through tariff/non-tariff regulation. The main opposing philosophy is "free market".

What is protectionism?

There are such forms:

1. Permanent protection. It implies support for strategic industries (like agriculture), the weakness of which would make the country vulnerable in a war.
2. Temporary protection. Used to support industries that have been recently established and need time to mature and compete withworld analogues.
3. Retaliation. Applied when trading partners are the first to introduce certain restrictions.

Types of protectionism

Depending on the development of trends, the following types are distinguished:

1. Selective protectionism. It means protection from a specific product or from a specific state.
2. Industry protectionism. This is the name given to the protection of a certain area of the economic sector (for example, it can be the same agriculture).
3. Collective protectionism. This is the name given to the mutual protection of several countries that have united in an alliance.
4. Hidden protectionism. This is protection during which non-customs methods are used (stimulating the country's economy, etc.).

Protectionist measures in Russia and the rest of the world

What tools are used to protect domestic industries? Russian protectionist measures will be considered, but it should be noted that world ones are very close to them or even the same with them (depending on the country). So, applies:

1. Antitrust regulation. Protectionist measures in this case imply a focus on protecting the national producer, as well as creating a competitive environment. Here, within the framework of interest, there is a regulation of natural monopolies, as well as a mechanism to prevent the piecework creation of this situation. The main body responsible for the implementation of these provisions is the FAS RF.
2. Customs and tariffregulation. Protectionist measures in this case have a dual nature. So, they imply the establishment of restrictions on the import of goods of a certain type (such as metallurgical products, chemical and others) - this is customs regulation. Also, all imported products are subject to duty, which is charged at a certain rate. Thus, it becomes more expensive, and it is easier for domestic products to compete with it.
3. Non-tariff regulation. This includes various measures that are taken within the framework of administrative regulation. Here, protectionism can be expressed in helping to export high-tech products (agreements at the level of governments of countries, holding exhibitions), creating bureaucratic barriers for importers, and other similar actions.



4. Stimulation of innovative development. In the long term, the effectiveness potential of other factors will be exhausted. Beneficial innovations are needed to improve the quality and standards of life. Therefore, a policy is being pursued to increase the activity of developing advanced technologies. It also stimulates an increase in the share of investments that are aimed at introducing qualitatively new products. Companies that do this receive a wide range of support.
5. Support for small and medium businesses. It is expressed in the gradual reduction of the number of administrative barriers, the simplification of the registration of an enterprise and the conduct of business with the state.
6. Creating an attractive investment environment. Here the state has taken the path of reducingthe total tax burden on business entities. By 2020, it is planned to reduce the level of taxes in the budget system of the Russian Federation to 33 percent of the gross domestic product.

It should be noted that the focus of the article was on the Russian Federation. But other states of the world act in a similar way.