The Choice of Instrument for Industry Protection

Governments select the form of protection given to import-competing producers from a wide range of tariffand non-tariff instruments. There has been a worldwide increase in the use of non-tariff instruments. Indeed, the New Protectionism has usually been identified with an increase in the use of non-tariff instruments of protection, both in the form of increasing commodity coverage of non-tariff instruments and in the form of greater trade restrictiveness of the existing coverage. (For details of the forms of non-tariff protection and their spread, see, for example, Krauss, 1979 or Page, 1981). And it has been observed that there is a remarkable similarity across the industrialised countries in the commodity groups or industries in which the growth of non-tariff barriers to import trade has been concentrated. (On this score, see in particular, Walter and Chung, 1972, and Page, 1981.) Therefore, in order to understand the growth of barriers to trade one must understand the reasons why non-tariff instruments have been the chosen instruments for the increased protection granted to certain industries. Yet the commentaries on the resurgence of protectionism have been confined almost exclusively to suggesting explanations that relate to protection per se, such as the growing rate of unemployment of labour and the capital stock, rather than to explanations of the simultaneous and fundamental shift in the pattern of protection by instrument.