« Alcoa argues for interests of “future generations” to take precedence over exports | Home | Globalisation & the Decline of the Welfare State »
Do tariffs matter any more?
By Michael Cebon | December 4, 2008
Martin Feil has an interesting article in The Age today criticising “free trade” as not particularly free. he argues that
The global industry protection policy development of the past 30 years has moved light years away from tariffs and has extended into the much broader arena of every other form of government assistance.
Our government is giving money to the car industry. It is guaranteeing the money markets. It is lowering interest rates to stimulate sales in the finance sector. It will tax us to pay for innovations in climate change. It will give individuals cash gifts to stimulate spending. It will spend the surplus to bring infrastructure forward to create jobs in the construction industry. It is picking winners and losers all over the place.
So does that mean that tariff levels are pretty irrelevant now? (In Australia at least…)
And a more important question: If successful economies are using government assistance in place of tariffs to protect and support their economies, where does that leave developing countries? Restricted in their use of tariffs by mulilateral or bilateral trade agreements, but unable to afford significant government assistance to industry in the ways listed above, how are developing countries supposed to develop?
Topics: Australian Trade Policy, Global Economics |