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The case for import controls

The case for import controls EDITORIAL COMMENT The case for import controls IF there was one action designed to over manufacturing and trading policies British clothing, footwear and textile gratify the emotions of free traders it is growing stronger in every country — industry to become run-down (always was British Leyland's "Superdeal" including the free enterprise stronghold assuming, of course, that the unions are announcement. With other UK-based prepared to see members lose thei r jobs), of the US — these questions need to be car manufacturers swiftly following suit but let not the free trade advocates raised constantly lest the import control with their own better-deal-for-the complain when overseas producers, issue is viewed in the misleading isola­ customer schemes, there came the having cornered the market, exercise tion of quotas and levies. obvious reaction from those who are their right to jack up prices. Pressures Opponents of import curbs are opposed to the current clamour for from workers to obtain better working always pointing out the dangers of retal­ import controls. and living standards are potentially as iation by trading partners. It is also great in Taiwan as they have been in Is it not better, they argue, t o com­ argued that an industry shielded from Leicester. bat foreign competition by making the competition will lapse into complacency domestic product more attractive, To draw a parallel in the raw materials and thus inefficiency. rather than resort t o protectionism? field, the coal industry was allowed to Conversely, for those engaged in the Of course, they are right. And their go into decline because successive labour versus capital debate, there is the governments went on the optimistic reasons might well go unchallenged in call for some form of import restraint assumption that imported oil would an international trading arena where when jobs are at risk. contestants are left to fight it out with remain relatively cheap. Then look what Nowhere is this more graphically no help whatsoever from their respective happened. demonstrated than clothing and textiles. Governments. Then there is the point about retalia­ The Shirt Manufacturers' Federation, tion , a deterrence which seems to be But that, as every free enterprise protesting about the "rising tide of largely psychological. What forms of advocate must concede, is not the case. cheap imports" from the Far East, point retribution have been made against The pros and cons of protectionism do to a dramatic reduction in the domestic Japan, Australia and Italy, who are not rest solely on such tangible labour force over the last ten years, with restraints as import quotes and levies. leading practitioners of import controls a 15 per cent workforce cut among in one form or another? One country's import curb can be some medium-sized manufacturers since Clearly, no one wit h memories of the interpreted as no different from another January alone. stultifying effects of pre-war protection­ country's export subsidy, and i t is with­ The attractions of not putting up ism would support the wholesale re- in this wider context that protectionist trade barriers apply t o importers for the policies are impossible to identify and erection of trade barriers. Few, if any, obvious reason that it would damage disentangle. countries have that degree of self-suffic­ their livelihood; to retailers who fear a iency. If one country slaps a 30 per cent drop in volume sales if an import ban levy on imported cars that, clearly, can Nevertheless, a case can be made out was introduced; and t o consumers who, be construed as a trade barrier. But for controls: either to allow an industry naturally enough in these hard times, what of the situation where, instead of a with no viable future to be phased out have few scruples about buying foreign levy, that country's government hands with appropriate job replacement for if the price is relatively cheap for a out massive aid to enable its own car those affected; or to allow manufacturers product which is comparable in quality. industry to compete successfully in the who are going through a rough patch to home market against foreign rivals? But what opponents of any form of carry out a capital investment pro­ Alternatively, it may introduce stringent import control conveniently overlook is gramme which will enable them to that cheap goods from abroad — while safety and anti-pollution measures become competitive once more on which, - though laudibie in apparent tempting in the short-term — endanger world markets. intent — effectively put a temporary both the longer term viability of the Like most measures which, on the block on many imported models. home manufacturer and ultimately the face of it, appear untenable, import con­ consumer. By all means allow the A t a time when government influence trols are justified — in moderation. ■ INDUSTRIAL MANAGEMENT http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Management Emerald Publishing

The case for import controls

Industrial Management , Volume 75 (10): 1 – Oct 1, 1975
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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-6929
DOI
10.1108/eb056564
Publisher site
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Abstract

EDITORIAL COMMENT The case for import controls IF there was one action designed to over manufacturing and trading policies British clothing, footwear and textile gratify the emotions of free traders it is growing stronger in every country — industry to become run-down (always was British Leyland's "Superdeal" including the free enterprise stronghold assuming, of course, that the unions are announcement. With other UK-based prepared to see members lose thei r jobs), of the US — these questions need to be car manufacturers swiftly following suit but let not the free trade advocates raised constantly lest the import control with their own better-deal-for-the complain when overseas producers, issue is viewed in the misleading isola­ customer schemes, there came the having cornered the market, exercise tion of quotas and levies. obvious reaction from those who are their right to jack up prices. Pressures Opponents of import curbs are opposed to the current clamour for from workers to obtain better working always pointing out the dangers of retal­ import controls. and living standards are potentially as iation by trading partners. It is also great in Taiwan as they have been in Is it not better, they argue, t o com­ argued that an industry shielded from Leicester. bat foreign competition by making the competition will lapse into complacency domestic product more attractive, To draw a parallel in the raw materials and thus inefficiency. rather than resort t o protectionism? field, the coal industry was allowed to Conversely, for those engaged in the Of course, they are right. And their go into decline because successive labour versus capital debate, there is the governments went on the optimistic reasons might well go unchallenged in call for some form of import restraint assumption that imported oil would an international trading arena where when jobs are at risk. contestants are left to fight it out with remain relatively cheap. Then look what Nowhere is this more graphically no help whatsoever from their respective happened. demonstrated than clothing and textiles. Governments. Then there is the point about retalia­ The Shirt Manufacturers' Federation, tion , a deterrence which seems to be But that, as every free enterprise protesting about the "rising tide of largely psychological. What forms of advocate must concede, is not the case. cheap imports" from the Far East, point retribution have been made against The pros and cons of protectionism do to a dramatic reduction in the domestic Japan, Australia and Italy, who are not rest solely on such tangible labour force over the last ten years, with restraints as import quotes and levies. leading practitioners of import controls a 15 per cent workforce cut among in one form or another? One country's import curb can be some medium-sized manufacturers since Clearly, no one wit h memories of the interpreted as no different from another January alone. stultifying effects of pre-war protection­ country's export subsidy, and i t is with­ The attractions of not putting up ism would support the wholesale re- in this wider context that protectionist trade barriers apply t o importers for the policies are impossible to identify and erection of trade barriers. Few, if any, obvious reason that it would damage disentangle. countries have that degree of self-suffic­ their livelihood; to retailers who fear a iency. If one country slaps a 30 per cent drop in volume sales if an import ban levy on imported cars that, clearly, can Nevertheless, a case can be made out was introduced; and t o consumers who, be construed as a trade barrier. But for controls: either to allow an industry naturally enough in these hard times, what of the situation where, instead of a with no viable future to be phased out have few scruples about buying foreign levy, that country's government hands with appropriate job replacement for if the price is relatively cheap for a out massive aid to enable its own car those affected; or to allow manufacturers product which is comparable in quality. industry to compete successfully in the who are going through a rough patch to home market against foreign rivals? But what opponents of any form of carry out a capital investment pro­ Alternatively, it may introduce stringent import control conveniently overlook is gramme which will enable them to that cheap goods from abroad — while safety and anti-pollution measures become competitive once more on which, - though laudibie in apparent tempting in the short-term — endanger world markets. intent — effectively put a temporary both the longer term viability of the Like most measures which, on the block on many imported models. home manufacturer and ultimately the face of it, appear untenable, import con­ consumer. By all means allow the A t a time when government influence trols are justified — in moderation. ■ INDUSTRIAL MANAGEMENT

Journal

Industrial Management – Emerald Publishing

Published: Oct 1, 1975

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