<p>The only protection that sincere free trade offers is the increased competivity forced by the "natural selection" against foreign competitors.
Protected economies tend to accumulate competitive disadvantages, which in the long run, may overcome the barriers to trade.</p>

<p>Inserting distortions on the economy is like blocking the natural course of water. Market forces just accumulate until they grow beyond the point were they destroy the barriers.</p>

<p>But opening markets does not mean that anybody will collect the benefits. Free trade produces creative destruction of unfit competitors, so they use their influence to distort the market on his favor, with uncompetitive practices, and pressuring governments to introduce distortions favorale to themselves.</p>

CC BY-SA 3.0
2017-02-20T23:25:01.350Z
2017-02-20T23:25:01.350Z
nafagise
<p>I am not sure what you mean by 'free-trade economies', but yes, most countries/trade areas championing the free market do impose all sorts of tariffs. You can read about it on the World Trade Organizations homepage.</p>

<p><a href="https://www.wto.org/english/tratop_e/tariffs_e/tariffs_e.htm" rel="nofollow noreferrer">https://www.wto.org/english/tratop_e/tariffs_e/tariffs_e.htm</a></p>

<p>As you pointed out there are all sorts of other tools such as defining specifications for a product that foreign rivals would find difficult to meet in the short term. I would argue that this is frequently difficult to spot as it usually takes the guise of environmental or consumer protection.</p>

CC BY-SA 3.0
2017-02-20T18:18:48.830Z
2017-02-20T20:41:03.633Z
2017-02-20T20:41:03.633Z
Giskard
<p>In addition to points made in other answers, the costs of transporting goods over long distances can act as a form of protection against imports. How significant they are depends to a considerable extent on the value-to-weight ratio of the goods: the lower the ratio the greater the addition to the total cost of imports.  Also relevant is whether the goods are perishable and so require extra costs of preservation (eg refrigeration of meat). The quality of transport infrastructure is also a factor, and improvements may reduce transport costs but will not eliminate them altogether. Thus transport costs are a natural barrier to trade, which can be added to by poor infrastructure in either the exporting or the importing country.</p>

<p>As an example, <a href="http://www.nottingham.ac.uk/credit/documents/papers/06-11.pdf" rel="nofollow noreferrer">this study by Kiringai (2006)</a> found that transport costs added significantly to the costs of some exports from Kenya (see especially p 12).</p>

CC BY-SA 3.0
2017-02-21T11:30:25.823Z
2017-02-21T11:51:21.570Z
2017-02-21T11:51:21.570Z
Adam Bailey
<p>I think the (or at least, a) relevant concept is that of <strong>non-tariff barriers to trade</strong>. Wikipedia <a href="https://en.wikipedia.org/wiki/Non-tariff_barriers_to_trade" rel="noreferrer">has a nice summary</a>.</p>

<p>Let me quote a couple of sections from the article:</p>

<blockquote>
  <p>Non-tariff barriers to trade (NTBs) or sometimes called "Non-Tariff Measures (NTMs)" are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. The SADC says, "a Non-Tariff Barrier is any obstacle to international trade that is not an import or export duty. They may take the form of import quotas, subsidies, customs delays, technical barriers, or other systems preventing or impeding trade." According to the World Trade Organisation, non-tariff barriers to trade include import licensing, rules for valuation of goods at customs, pre-shipment inspections, rules of origin ('made in'), and trade prepared investment measures.</p>
</blockquote>

<p>-</p>

<blockquote>
  <p>According to statements made at United Nations Conference on Trade and Development (UNCTAD, 2005), the use of NTBs, based on the amount and control of price levels has decreased significantly from 45% in 1994 to 15% in 2004, while use of other NTBs increased from 55% in 1994 to 85% in 2004. [...] The need to protect sensitive to import industries, as well as a wide range of trade restrictions, available to the governments of industrialized countries, forcing them to resort to use the NTB, and putting serious obstacles to international trade and world economic growth. Thus, NTBs can be referred as a new of protection which has replaced tariffs as an old form of protection.</p>
</blockquote>

<p>So regulatory and similar barriers to trade have become widespread—often as a way to circumvent restrictions on protectionism. </p>

CC BY-SA 3.0
2017-02-20T18:51:22.927Z
2017-02-20T18:51:22.927Z
Ubiquitous
<p>The aimed-for outcome of the protectionist could be said to be the shielding of domestic markets from competition with an "unfair" advantage. For example, an emerging economy might have non-existent workers' rights enabling lower production cost.</p>

<p>However, discussions surrounding naive protectionist policies typically descend into "define a biscuit" type arguments. In short: the difficulty in defining the boundaries of tariffs quickly turns arguments to farce.</p>

<p>But there must be other, better ways to achieve the desired outcome. I have read that in the early 2000s Germany "protected" its intra-EU car sales by ensuring EU emissions regulations were closely aligned with the emissions of their own diesel engine technology making market entry by (for example) American cars with big petrol engines more difficult. Whether this is apochryphal or not, the point remains.</p>

<p>Do free-trade economies typically endeavour to protect themselves in ANY way, or does "free mean free" in the minds of these legislatures?</p>

CC BY-SA 3.0
2017-02-20T21:07:06.310Z
Non-tariff barriers are generally not "better" than tariffs: they typically impose higher costs on domestic consumers without the silver lining of revenues for their government which could lead to reductions in other taxes
Henry
CC BY-SA 3.0
2017-02-20T21:31:52.117Z
The government benefits from higher tax revenues from the protected industry and the entitlement- and other savings associated with not having joblessness etc. The "hidden" nature of this protectionism could also be seen as a benefit. Certainly if the German anecdote in the OP is true then the secrecy/obfuscation was a critical component in securing a protectionist measure favourable to one member of a bloc.
52d6c6af
CC BY-SA 3.0
2017-02-20T21:36:20.740Z
Those potential benefits from protection could happen with tariffs too (indeed should happen if the tariffs have the same trade effects as the equivalent non-tariff barriers).  But with tariffs there is revenue - with non-tariff barriers there is just wasteful inefficiency
Henry
CC BY-SA 3.0
2017-02-20T21:40:35.037Z
@Henry for stuff like emission regulations you also get the advantage of lower emissions where the goods are used.
Paŭlo Ebermann
CC BY-SA 3.0
2017-02-20T21:47:09.103Z
@PaŭloEbermann - not if your domestic producers design the emissions regulations [to be cheated or at least not be meaningful in real world use](https://www.theguardian.com/business/2016/apr/21/all-top-selling-cars-break-emissions-limits-in-real-world-tests)
Henry
CC BY-SA 3.0
2017-02-21T13:39:20.857Z
There is positive and negative protection policies. Technical barrier can be circumvent with compliant.  Red tape barrier is the most difficult to deal with, e.g. impose additional control and let appointed third party rent seeker to profit from it , which the cost is actually pass down to the consumer. Even though those essential goods are not produced by these country.
mootmoot
<free-trade>
Do free-trade economies typically offer any protection for domestic markets?
52d6c6af
# Do free-trade economies typically offer any protection for domestic markets?

(Asked by: username_0 on 2017-02-20)

The aimed-for outcome of the protectionist could be said to be the shielding of domestic markets from competition with an "unfair" advantage. For example, an emerging economy might have non-existent workers' rights enabling lower production cost.

However, discussions surrounding naive protectionist policies typically descend into "define a biscuit" type arguments. In short: the difficulty in defining the boundaries of tariffs quickly turns arguments to farce.

But there must be other, better ways to achieve the desired outcome. I have read that in the early 2000s Germany "protected" its intra-EU car sales by ensuring EU emissions regulations were closely aligned with the emissions of their own diesel engine technology making market entry by (for example) American cars with big petrol engines more difficult. Whether this is apochryphal or not, the point remains.

Do free-trade economies typically endeavour to protect themselves in ANY way, or does "free mean free" in the minds of these legislatures?

**Tags:** free-trade

> **Comments:**
> **username_1**: Non-tariff barriers are generally not "better" than tariffs: they typically impose higher costs on domestic consumers without the silver lining of revenues for their government which could lead to reductions in other taxes  
> **username_0**: The government benefits from higher tax revenues from the protected industry and the entitlement- and other savings associated with not having joblessness etc. The "hidden" nature of this protectionism could also be seen as a benefit. Certainly if the German anecdote in the OP is true then the secrecy/obfuscation was a critical component in securing a protectionist measure favourable to one member of a bloc.  
> **username_1**: Those potential benefits from protection could happen with tariffs too (indeed should happen if the tariffs have the same trade effects as the equivalent non-tariff barriers).  But with tariffs there is revenue - with non-tariff barriers there is just wasteful inefficiency  
> **username_2**: @username_1 for stuff like emission regulations you also get the advantage of lower emissions where the goods are used.  
> **username_1**: @PaŭloEbermann - not if your domestic producers design the emissions regulations [to be cheated or at least not be meaningful in real world use](https://www.theguardian.com/business/2016/apr/21/all-top-selling-cars-break-emissions-limits-in-real-world-tests)  
> **username_3**: There is positive and negative protection policies. Technical barrier can be circumvent with compliant.  Red tape barrier is the most difficult to deal with, e.g. impose additional control and let appointed third party rent seeker to profit from it , which the cost is actually pass down to the consumer. Even though those essential goods are not produced by these country.  

---

## 4 answers

### Answer by username_7 on 2017-02-20. Score: 5 | Accepted answer

I think the (or at least, a) relevant concept is that of **non-tariff barriers to trade**. Wikipedia [has a nice summary](https://en.wikipedia.org/wiki/Non-tariff_barriers_to_trade).

Let me quote a couple of sections from the article:

> Non-tariff barriers to trade (NTBs) or sometimes called "Non-Tariff Measures (NTMs)" are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. The SADC says, "a Non-Tariff Barrier is any obstacle to international trade that is not an import or export duty. They may take the form of import quotas, subsidies, customs delays, technical barriers, or other systems preventing or impeding trade." According to the World Trade Organisation, non-tariff barriers to trade include import licensing, rules for valuation of goods at customs, pre-shipment inspections, rules of origin ('made in'), and trade prepared investment measures.

-

> According to statements made at United Nations Conference on Trade and Development (UNCTAD, 2005), the use of NTBs, based on the amount and control of price levels has decreased significantly from 45% in 1994 to 15% in 2004, while use of other NTBs increased from 55% in 1994 to 85% in 2004. [...] The need to protect sensitive to import industries, as well as a wide range of trade restrictions, available to the governments of industrialized countries, forcing them to resort to use the NTB, and putting serious obstacles to international trade and world economic growth. Thus, NTBs can be referred as a new of protection which has replaced tariffs as an old form of protection.

So regulatory and similar barriers to trade have become widespread—often as a way to circumvent restrictions on protectionism.


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### Answer by username_4 on 2017-02-20. Score: 2

The only protection that sincere free trade offers is the increased competivity forced by the "natural selection" against foreign competitors.
Protected economies tend to accumulate competitive disadvantages, which in the long run, may overcome the barriers to trade.

Inserting distortions on the economy is like blocking the natural course of water. Market forces just accumulate until they grow beyond the point were they destroy the barriers.

But opening markets does not mean that anybody will collect the benefits. Free trade produces creative destruction of unfit competitors, so they use their influence to distort the market on his favor, with uncompetitive practices, and pressuring governments to introduce distortions favorale to themselves.


---

### Answer by username_5 on 2017-02-20. Score: 2

I am not sure what you mean by 'free-trade economies', but yes, most countries/trade areas championing the free market do impose all sorts of tariffs. You can read about it on the World Trade Organizations homepage.

<https://www.wto.org/english/tratop_e/tariffs_e/tariffs_e.htm>

As you pointed out there are all sorts of other tools such as defining specifications for a product that foreign rivals would find difficult to meet in the short term. I would argue that this is frequently difficult to spot as it usually takes the guise of environmental or consumer protection.


---

### Answer by username_6 on 2017-02-21. Score: 1

In addition to points made in other answers, the costs of transporting goods over long distances can act as a form of protection against imports. How significant they are depends to a considerable extent on the value-to-weight ratio of the goods: the lower the ratio the greater the addition to the total cost of imports. Also relevant is whether the goods are perishable and so require extra costs of preservation (eg refrigeration of meat). The quality of transport infrastructure is also a factor, and improvements may reduce transport costs but will not eliminate them altogether. Thus transport costs are a natural barrier to trade, which can be added to by poor infrastructure in either the exporting or the importing country.

As an example, [this study by Kiringai (2006)](http://www.nottingham.ac.uk/credit/documents/papers/06-11.pdf) found that transport costs added significantly to the costs of some exports from Kenya (see especially p 12).


---

