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In addition, the US government also put a 100% import tariff on various European goods, ranging from cashmere sweaters to electric tea and coffee makers (Lightner, O’Mara, n/d). After many twists and turns, the December 2009 agreement required the EU to reduce its tariffs “on imported bananas from 176 euros ($224; £140) per tonne to 114 euros per tonne within eight years.” (BBC, 2012)
The “banana wars” are known to be one of the bright examples of trade protectionism. Fouda (2012) defines protectionism as “an economic policy of restraining trade between nations, through such methods as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports and prevent foreign take-over of local markets and companies.”
Fouda (2012) states that free trade opposes such government-imposed restrictions as in the above example of “banana wars”. However, supporters of the trade protectionism underline that such policies protect home or also known as “infant” industries.
Would you agree that advantages such as protecting domestic markets and producers outweigh the disadvantages of trade protectionism?
support and justify your answer.
