The Comparative Advantage Theory and the Infant Industry Protection Argument (비교우위이론과 초기 산업 보호 논쟁)

목차

Ⅰ. Introduction.

Ⅱ.1. Comparative Advantage Theory - Ricardian model, Heckscher-Ohlin model, preference, and economies of scale
Ⅱ.2. The Infant Industry Protection Theory
Ⅱ.3. Case Studies-why and in what situation protection policy fails

Ⅲ. Conclusion.

본문내용

are like the two sides of coins.
Ⅲ. Conclusion.
Until now, many Free Trade Agreements have been established. EU, NAFTA are the beginners and in Asia, Japan and Singapore, Korea and Chile made FTA recently and the negotiation between Japan and Korea is on the way. It seems that now, free trade is a world wide tendency. But we need to know that there were many changes in choosing one way between free trade and government control. Before the Industrial Revolution mercantilism based on government control was general trend. Then by Adam Smith free trade was fervently welcomed, and after List proposed infant industry production policy, many late-comer countries in industrialization followed it. But before the Great Depression in 1930s free trade was powerful, and after that government intervened in economy actively. Now we are returning to free trade again. So, we need to have some discerning eyes to understand neither ways are absolutely good or completely bad and the appreciation depends on each situation. In globalism, there is little doubt that the final goal is to realize total free trade to maximize the benefit of comparative advantage theories studied before. But then, we face the concept of so-called regionalism along with the regionalism and regionalism appears to be the opposite trend of free trade goal from the global viewpoint because it could discriminate non-member countries economically, although it pursue free trade within their economic region. How can we or should we understand the situation of today?
Free trade and protection argument gives us important hints. It is interesting to perceive protecting a country's domestic industries could be understood in the same context with protecting a region's economic interests. As List argued the necessity of infant industry protection for a certain period of preparing time to go out to the world market, FTA in many regions today could be interpreted as a preparing stage of transition to accomplish worldwide free trade. But what we also have to remember is that just as domestic protection policy did fail in many cases, there is some possibility that regionalism could fail by giving huge disadvantage to non-member countries. So, the conclusion is that by reflecting the past experiences of fail and success of free trade and protection policies, we should learn good lessons and with them we can prepare for the globalization of 21st century.
References
Debraj Ray, "Development Economics"(Princeton University Press, 1998)
Douglas A. Irwin, "Against the Tide : An Intellectual History of Free Trade"(Princeton University Press, 1996)
Evelina M. Viloria, "The world : History and Civilization"(Vibal publishing house, Manila, 2002)
Hane, Mikiso, "Premodern Japan-A Historical Survey" (Westview Press, Colorado, London, 1991)
Hayami, Yujiro, "Development Economics"(Oxford University Press, 2003)
Tetsuji Murase, "A Zone of Asian Monetary Stability"(Asia Pacific Press, 2002)
佐藤次高, “詳說 世界史”(山川出版社, 東京 2004)

키워드

Infant Industry,   FTA,   the comparative advantage theory ,   the infant industry protection argument,   Ricardian model,   Heckscher-Ohlin model,   economies of scale,   Listian Trap