Free trade vs protection: Battle still on

The priority given to free trade has generated expectations that are yet to be met

The evolution of trade agreements finds its genesis in a series of flip-flops in the trade policies of Europe and the United States which, for over two centuries, were heavily influenced by mercantile economic theory. A favourable balance of trade through tariffs and quotas on imports and thwarting anything that might help a foreign nation to compete with the domestic production of goods were the overarching objectives.

The questioning of this doctrine by Adam Smith gave birth to the “absolute advantage argument for free trade”, igniting the first movement towards liberalised trade. The Reciprocity of Duties Act of 1823 made