Government intervention on tradeIntroductionIt is an apparent fact that the post war periods after World War II have seen a greater shift towards the minimization of trade barriers. Nonetheless, governments in different regions around the world have continued to restrict free trade based on different motivations. This phenomenon is best epitomized in Britain whereby in the post-World War II epoch, the high manufacturers tariffs which were evident in the 1930s were shrouded with even higher and more strict exchange and trade control. This phenomenon was also apparent in France whereby there was only a gradual dismantling of the severe trade controls in the after the world wars.
Nonetheless, eventual developments saw greater restriction and skyrocketing tariffs on all the imports which were perceived to be competing with the products which were being manufactured in the local market. Even the latter efforts to increase intra-European liberalization were frustrated and restricted by elevated tariffs as well as re-imposition of controls in this country. Similarly, the restoration of private trade in Japan between 1949 and 1950 saw the reemergence of restrictions on all the manufacturers and foodstuffs which were competing with the local products (Horowitz, 2004).
This scenario epitomizes a greater paradigm shift towards the intervention of different governments in trade, despite the net socio-economic benefits which are linked to the minimization of government interventions and opening up the national and regional economies to trade (Anderson, 2004). Against this background, this paper is a profound effort to explore the political, economic as well as cultural motives which informs the move by various governments to intervene in trading activities in their regions of jurisdiction. Political motivesThe first political motivation towards the move by various governments to restrict trade is founded on the concept of political sovereignty.
This is whereby when a given political regime exhibits extensive overreliance on commodities from a given region, this affects the sovereignty of the recipient nation in terms of robust bargaining power in case of contested interests in the international platform. This approach to sovereignty has been perceived as having played a key role in informing the debates in the US congress in the decision making process on whether the US should accept as well as execute the outcomes of the Uruguay Round of trade negotiations (Sarooshi, 2004). In this particular case, governments perceive that by permitting free trade between themselves and other nations, this is bound to degenerate to economic overdependence on the products from certain countries.
This relationship can impede the government’s autonomy in making political decisions which affect their countries and thus clearly pose a major blow to their sovereignty. In this case, the foreign policy which is adopted by the importing government ought to be aligned with the economic interests of the exporting country, failure to which the exporting nation can decide to cut their supply and detrimentally affect the economy of the importing county.
Subsequently, majority of the governments impose heavy tariffs on imports from other dominant countries aimed at encouraging their local manufacturers. As a result, they are bound to have greater politico-economic autonomy and develop their foreign policies without fear of being intimidated by countries which they depend on as sources of various products.