Protectionism

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Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. Proponents argue that protectionist policies shield the producers, businesses, and workers of the import-competing sector in the country from foreign competitors and raise government revenue. Opponents argue that protectionist policies reduce trade, and adversely affect consumers in general (by raising the cost of imported goods) as well as the producers and workers in export sectors, both in the country implementing protectionist policies and in the countries against which the protections are implemented.^[1]

Protectionism has been advocated mainly by parties that hold economic nationalist^[a] positions, while economically liberal^[b] political parties generally support free trade.^{[2][3][4][5][6]}

There is a consensus among economists that protectionism has a negative effect on economic growth and economic welfare,^{[7][8][9][10]} while free trade and the reduction of trade barriers have a significantly positive effect on economic growth.^{[8][11][12][13][14][15]} Many mainstream economists, such as Douglas Irwin, have implicated protectionism as an important contributing factor in some economic crises, most notably the Great Depression.^[16] A more reserved perspective is offered by New Keynesian economist Paul Krugman, who argues that tariffs were not the main cause of the Great Depression but rather a response to it, and that protectionism is a minor source of allocative inefficiency.^[17][18] Although trade liberalization can sometimes result in unequally distributed losses and gains, and can, in the short run, cause economic dislocation of workers in import-competing sectors,^[19][20] free trade lowers the costs of goods and services for both producers and consumers.^[21]

A variety of policies have been used to achieve protectionist goals. These include:

• Tariffs and import quotas are the most common types of protectionist policies.^[22] A tariff is an excise tax levied on imported goods. Originally imposed to raise government revenue, modern tariffs are now used primarily to protect domestic producers and wage rates from lower-priced importers. An import quota is a limit on the volume of a good that may be legally imported, usually established through an import licensing regime.^[22]
• Protection of technologies, patents, technical and scientific knowledge^[23][24][25]
• Restrictions on foreign direct investment,^[26] such as restrictions on the acquisition of domestic firms by foreign investors.^[27]
• Administrative barriers: Countries are sometimes accused of using their various administrative rules (e.g., regarding food safety, environmental standards, electrical safety, etc.) as a way to introduce barriers to imports.
• Anti-dumping legislation: "Dumping" is the practice of firms selling to export markets at lower prices than are charged in domestic markets. Supporters of anti-dumping laws argue that they prevent the import of cheaper foreign goods that would cause local firms to close down. However, in practice, anti-dumping laws are usually used to impose trade tariffs on foreign exporters.
• Direct subsidies: Government subsidies (in the form of lump-sum payments or cheap loans) are sometimes given to local firms that cannot compete well against imports. These subsidies are purported to "protect" local jobs and to help local firms adjust to the world markets.
• Export subsidies: Export subsidies are often used by governments to increase exports. Export subsidies have the opposite effect of export tariffs because exporters get payment, which is a percentage or proportion of the value of exported. Export subsidies increase the amount of trade, and in a country with floating exchange rates, have effects similar to import subsidies.
• Exchange rate control: A government may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. Doing so will raise the cost of imports and lower the cost of exports, leading to an improvement in its trade balance. However, such a policy is only effective in the short run, as it will lead to higher inflation in the country in the long run, which will, in turn, raise the real cost of exports, and reduce the relative price of imports.
• International patent systems: There is an argument for viewing national patent systems as a cloak for protectionist trade policies at a national level. Two strands of this argument exist: one when patents held by one country form part of a system of exploitable relative advantage in trade negotiations against another, and a second where adhering to a worldwide system of patents confers "good citizenship" status despite 'de facto protectionism'. Peter Drahos explains that "States realized that patent systems could be used to cloak protectionist strategies. There were also reputational advantages for states to be seen to be sticking to intellectual property systems. One could attend the various revisions of the Paris and Berne conventions, participate in the cosmopolitan moral dialogue about the need to protect the fruits of authorial labor and inventive genius...knowing all the while that one's domestic intellectual property system was a handy protectionist weapon."^[28]
• Political campaigns advocating domestic consumption (e.g. the "Buy American" campaign in the United States, which could be seen as an extra-legal promotion of protectionism.)
• Preferential governmental spending, such as the Buy American Act, federal legislation which called upon the United States government to prefer US-made products in its purchases.
• Regulations obstructing the importation or sale of articles not made to local standards or barring certain types of promotion.

In the modern trade arena, many other initiatives besides tariffs have been called protectionist. For example, some commentators, such as Jagdish Bhagwati, see developed countries' efforts in imposing their own labor or environmental standards as protectionism. Also, the imposition of restrictive certification procedures on imports is seen in this light.

Further, others point out that free trade agreements often have protectionist provisions such as intellectual property, copyright, and patent restrictions that benefit large corporations. These provisions restrict trade in music, movies, pharmaceuticals, software, and other manufactured items to high-cost producers with quotas from low-cost producers set to zero.^[29]

There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth.^{[11][12][13][8][30][31][32]} However, protectionism can be used to raise government revenue and enable access to intellectual property, including essential medicines.^[33]

Protectionism is frequently criticized by economists as harming the people it is intended to help. Mainstream economists instead support free trade.^[34][35] The principle of comparative advantage shows that the gains from free trade outweigh any losses as free trade creates more jobs than it destroys because it allows countries to specialize in the production of goods and services in which they have a comparative advantage.^[36] Protectionism results in deadweight loss; this loss to overall welfare gives no-one any benefit, unlike in a free market (without trade barriers), where there is no such total loss. Economist Stephen P. Magee claims the benefits of free trade outweigh the losses by as much as 100 to 1.^[37]

A 2016 study found that "trade typically favors the poor", as they spend a greater share of their earnings on goods, as free trade reduces the costs of goods.^[38] Other research found that China's entry to the WTO benefited US consumers, as the price of Chinese goods were substantially reduced.^[39] Harvard economist Dani Rodrik argues that while globalization and free trade does contribute to social problems, "a serious retreat into protectionism would hurt the many groups that benefit from trade and would result in the same kind of social conflicts that globalization itself generates. We have to recognize that erecting trade barriers will help in only a limited set of circumstances and that trade policy will rarely be the best response to the problems [of globalization]".^[40]

An empirical study by Furceri et al. (2019) concluded that protectionist measures like tariff increases have a significant adverse impact on domestic output and productivity.^[41] A prominent 1999 study by Jeffrey A. Frankel and David H. Romer found while controlling for relevant factors, that free trade does have a positive impact on growth and incomes. The effect is quantitatively large and statistically significant.^[42]

Economist Arvind Panagariya criticizes the view that protectionism is good for growth. Such arguments, according to him, arise from "revisionist interpretation" of East Asian "tigers"' economic history. The Asian tigers achieved a rapid increase in per capita income without any "redistributive social programs", through free trade, which advanced Western economies took a century to achieve.^[32][43]

According to economic historians Findlay and O'Rourke, there is a consensus in the economics literature that protectionist policies in the interwar period "hurt the world economy overall, although there is a debate about whether the effect was large or small."^[44]

According to Dartmouth economist Douglas Irwin, "that there is a correlation between high tariffs and growth in the late nineteenth century cannot be denied. But correlation is not causation... there is no reason for necessarily thinking that import protection was a good policy just because the economic outcome was good: the outcome could have been driven by factors completely unrelated to the tariff, or perhaps could have been even better in the absence of protection."^[45] Irwin furthermore writes that "few observers have argued outright that the high tariffs caused such growth."^[45]

One study by the economic historian Brian Varian found no correlation between tariffs and growth among the Australian colonies in the late nineteenth century, a time when each of the colonies had the independence to set their own tariffs.^[46]

According to Oxford economic historian Kevin O'Rourke, "It seems clear that protection was important for the growth of US manufacturing in the first half of the 19th century; but this does not necessarily imply that the tariff was beneficial for GDP growth. Protectionists have often pointed to German and American industrialization during this period as evidence in favor of their position, but economic growth is influenced by many factors other than trade policy, and it is important to control for these when assessing the links between tariffs and growth."^[47]

There is broad consensus among economists that free trade helps workers in developing countries, even though they are not subject to the stringent health and labor standards of developed countries. This is because "the growth of manufacturing—and of the myriad other jobs that the new export sector creates—has a ripple effect throughout the economy" that creates competition among producers, lifting wages and living conditions.^[48] The Nobel laureates Milton Friedman and Paul Krugman have argued for free trade as a model for economic development.^[11] Alan Greenspan, former chair of the American Federal Reserve, has criticized protectionist proposals as leading "to an atrophy of our competitive ability. ... If the protectionist route is followed, newer, more efficient industries will have less scope to expand, and overall output and economic welfare will suffer."^[49]

Protectionists postulate that new industries may require protection from entrenched foreign competition in order to develop. Mainstream economists do concede that tariffs can in the short-term help domestic industries to develop but are contingent on the short-term nature of the protective tariffs and the ability of the government to pick the winners.^[50][51] The problems are that protective tariffs will not be reduced after the infant industry reaches a foothold, and that governments will not pick industries that are likely to succeed.^[51] Economists have identified a number of cases across different countries and industries where attempts to shelter infant industries failed.^{[52][53][54][55][56]}

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards for the regulation by national governments of different forms of intellectual property (IP) as applied to nationals of other WTO member nations.^[57] TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT)^[c] between 1989 and 1990^[58] and is administered by the WTO. Statements by the World Bank indicate that TRIPS has not led to a demonstrable acceleration of investment to low-income countries, though it may have done so for middle-income countries.^[20]

Critics argue that TRIPS limits the ability of governments to introduce competition for generic producers.^[59] The TRIPS agreement allows the grant of compulsory licenses at a nation's discretion. TRIPS-plus conditions in the United States' FTAs with Australia, Jordan, Singapore and Vietnam have restricted the application of compulsory licenses to emergency situations, antitrust remedies, and cases of public non-commercial use.^[59]

One of the most visible conflicts over TRIPS has been AIDS drugs in Africa. Despite the role that patents have played in maintaining higher drug costs for public health programs across Africa, this controversy has not led to a revision of TRIPS. Instead, an interpretive statement, the Doha Declaration, was issued in November 2001, which indicated that TRIPS should not prevent states from dealing with public health crises and allowed for compulsory licenses. After Doha, PhRMA, the United States and to a lesser extent other developed nations began working to minimize the effect of the declaration.^[60]

In 2020, conflicts re-emerged over patents, copyrights and trade secrets related to COVID-19 vaccines, diagnostics and treatments. South Africa and India proposed that WTO grant a temporary waiver to enable more widespread production of the vaccines, since suppressing the virus as quickly as possible benefits the entire world.^[61][62] The waivers would be in addition to the existing, but cumbersome, flexibilities in TRIPS allowing countries to impose compulsory licenses.^[63][64] Over 100 developing nations supported the waiver but it was blocked by the G7 members.^[65] This blocking was condemned by 400 organizations including Doctors Without Borders and 115 members of the European Parliament.^[66] In June 2022, after extensive involvement of the European Union, the WTO instead adopted a watered-down agreement that focuses only on vaccine patents, excludes high-income countries and China, and contains few provisions that are not covered by existing flexibilities.^[67][68]

Protectionism has been attributed as a major cause of war. Proponents of this theory point to the constant warfare in the 17th and 18th centuries among European countries whose governments were predominantly mercantilist and protectionist, the American Revolution, which came about ostensibly due to British tariffs and taxes. According to a slogan of Frédéric Bastiat (1801–1850), "When goods cannot cross borders, armies will."^[69]

On the other hand, archaeologist Lawrence H. Keeley argues in his book War Before Civilization that disputes between trading partners escalate to war more frequently than disputes between nations that don't trade much with each other.^[70] The Opium Wars were fought between the UK^[d] and China over the right of British merchants to engage in the free trade of opium. For many opium users, what started as recreation soon became a punishing addiction: many people who stopped ingesting opium suffered chills, nausea, and cramps, and sometimes died from withdrawal. Once addicted, people would often do almost anything to continue to get access to the drug.^[71]

Barbara Tuchman says both European intellectuals and leaders overestimated the power of free trade on the eve of World War I. They believed that the interconnectedness of European nations through trade would stop a continent-wide war from breaking out, as the economic consequences would be too great. However, the assumption proved incorrect. For example, Tuchman noted that Helmuth von Moltke the Younger, when warned of such consequences, refused to even consider them in his plans, arguing he was a "soldier", not an "economist".^[72]

In the 18th century, Adam Smith famously warned against the "interested sophistry" of industry, seeking to gain an advantage at the cost of the consumers.^[34] Friedrich List saw Adam Smith's views on free trade as disingenuous, believing that Smith advocated for free trade so that British industry could lock out underdeveloped foreign competition.^[73]

According to economic historians Douglas Irwin and Kevin O'Rourke, "shocks that emanate from brief financial crises tend to be transitory and have a little long-run effect on trade policy, whereas those that play out over longer periods (the early 1890s, early 1930s) may give rise to protectionism that is difficult to reverse. Regional wars also produce transitory shocks that have little impact on long-run trade policy, while global wars give rise to extensive government trade restrictions that can be difficult to reverse."^[74]

One study shows that sudden shifts in comparative advantage for specific countries have led some countries to become protectionist: "The shift in comparative advantage associated with the opening up of New World frontiers, and the subsequent "grain invasion" of Europe, led to higher agricultural tariffs from the late 1870s onwards, which as we have seen reversed the move toward freer trade that had characterized mid-nineteenth-century Europe. In the decades after World War II, Japan's rapid rise led to trade friction with other countries. Japan's recovery was accompanied by a sharp increase in its exports of certain product categories: cotton textiles in the 1950s, steel in the 1960s, automobiles in the 1970s, and electronics in the 1980s. In each case, the rapid expansion in Japan's exports created difficulties for its trading partners and the use of protectionism as a shock absorber."^[74]

In 2010, Paul Krugman wrote that China pursues a mercantilist and predatory policy, i.e., it keeps its currency undervalued to accumulate trade surpluses by using capital flow controls. The Chinese government sells renminbi and buys foreign currency to keep the renminbi low, giving the Chinese manufacturing sector a cost advantage over its competitors. China's surpluses drain US demand and slow economic recovery in other countries with which China trades. Krugman writes: "This is the most distorted exchange rate policy any great nation has ever followed". He notes that an undervalued renminbi is tantamount to imposing high tariffs or providing export subsidies. A cheaper currency improves employment and competitiveness because it makes imports more expensive while making domestic products more attractive. He expects Chinese surpluses to destroy 1.4 million American jobs by 2011.^{[75][76][77][78][79][80] [81][82][83]}

In June 2015, the international community, through the IMF, rejected this notion and assessed the renminbi as suggested to be no longer undervalued.^[84]

Later that year, American economist Charles Calomiris wrote that US presidential candidate at the time Donald Trump had falsely characterized the trajectory of the renminbi's exchange rate in nominal terms and especially so when using the real exchange rate, and that a recent devaluation by the PBC was a passive one where inaction would've led to an even steeper devaluation by market forces, understandably so after the disappearance of "a lot of [Chinese economic growth] low-hanging fruit that was easily picked in the 1980s, 1990s, and 2000s."^[85]

Europe became increasingly protectionist during the eighteenth century.^[44] Economic historians Findlay and O'Rourke write that in "the immediate aftermath of the Napoleonic Wars, European trade policies were almost universally protectionist", with the exceptions being smaller countries such as the Netherlands and Denmark.^[44]

Europe increasingly liberalized its trade during the 19th century.^[86] Countries such as the Netherlands, Denmark, Portugal and Switzerland, and arguably Sweden and Belgium, had fully moved towards free trade prior to 1860.^[86] Economic historians see the repeal of the Corn Laws in 1846 as the decisive shift toward free trade in Britain.^[86][87] A 1990 study by the Harvard economic historian Jeffrey Williamson showed that the Corn Laws (which imposed restrictions and tariffs on imported grain) substantially increased the cost of living for British workers, and hampered the British manufacturing sector by reducing the disposable incomes that British workers could have spent on manufactured goods.^[88] The shift towards liberalization in Britain occurred in part due to "the influence of economists like David Ricardo", but also due to "the growing power of urban interests".^[86]

Findlay and O'Rourke characterize 1860 Cobden Chevalier treaty between France and the United Kingdom as "a decisive shift toward European free trade."^[86] This treaty was followed by numerous free trade agreements: "France and Belgium signed a treaty in 1861; a Franco-Prussian treaty was signed in 1862; Italy entered the "network of Cobden-Chevalier treaties" in 1863 (Bairoch 1989, 40); Switzerland in 1864; Sweden, Norway, Spain, the Netherlands, and the Hanseatic towns in 1865; and Austria in 1866. By 1877, less than two decades after the Cobden Chevalier treaty and three decades after British Repeal, Germany "had virtually become a free trade country" (Bairoch, 41). Average duties on manufactured products had declined to 9–12% on the Continent, a far cry from the 50% British tariffs, and numerous prohibitions elsewhere, of the immediate post-Waterloo era (Bairoch, table 3, p. 6, and table 5, p. 42)."^[86]

Some European powers did not liberalize during the 19th century, such as the Russian Empire and Austro-Hungarian Empire which remained highly protectionist. The Ottoman Empire also became increasingly protectionist.^[89] In the Ottoman Empire's case, however, it previously had liberal free trade policies during the 18th to early 19th centuries.^[90]

The countries of Western Europe began to steadily liberalize their economies after World War II and the protectionism of the interwar period,^[44] but John Tsang, then Hong Kong's Secretary for Commerce, Industry and Technology and chair of the Sixth Ministerial Conference of the World Trade Organization, MC6, commented in 2005 that the EU spent around €70 billion per year on "trade-distorting support".^[91]

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Britain became one of the most prosperous economic regions in the world between the late 17th century and the early 19th century as a result of being the birthplace of the Industrial Revolution that began in the mid-eighteenth century.^[92] Successive British government protected Britain's merchants using trade regulations, barriers and subsidies to domestic industries in order to maximise exports from and minimise imports to Britain. The Navigation Acts of the late 17th century required all trade in England and its colonies to be conducted with English-flagged ships with at least 75% of their crews being English subjects.^[93]

The Navigation Acts also prohibited British colonies from exporting certain products to countries other than Britain along with mandating that imports be sourced only through Britain. The colonies were forbidden to trade directly with other nations or rival empires with the intention of maintaining them as dependent agricultural economies geared towards producing raw materials for export to Britain. The growth of native industries in the colonies were discouraged in order to keep them dependent on the metropole for finished goods.^[94][95] From 1815 to 1870, the United Kingdom reaped the benefits of being the world's first modern, industrialised nation. It became known as "the workshop of the world", with British finished goods being produced so efficiently and cheaply that they could often undersell comparable, locally manufactured goods in almost any other market.^[96]

By the 1840s, the United Kingdom had adopted a free-trade policy, meaning open markets and no tariffs throughout the empire.^[97] The Corn Laws were tariffs and other trade restrictions on imported food and corn enforced in the United Kingdom between 1815 and 1846, and enhanced the profits and political power associated with land ownership. The laws raised food prices and the costs of living for the British public, and hampered the growth of other British economic sectors, such as manufacturing, by reducing the disposable income of the British public.^[98] The Prime Minister, Sir Robert Peel, a Conservative, achieved repeal in 1846 with the support of the Whigs in Parliament, overcoming the opposition of most of his own party.

While the United Kingdom espoused a policy of free trade in the late nineteenth century, it was hardly the case that Britain was unaffected by the tariffs imposed by its trade partners—tariffs that generally increased during the late nineteenth century.^[99] According to one study, Britain's exports in 1902 would have been 57% higher, if all of Britain's trade partners also embraced free trade.^[100] The decline in overseas demand for British exports, resulting from foreign tariffs, contributed to the so-called late-Victorian climacteric in the British economy: a decline in the growth rate, i.e. a deceleration.^[101][102]

During the interwar era, Britain abandoned free trade. There was a limited erosion of free trade during the 1920s under a patchwork of legislation including the Safeguarding of Industries Act of 1921, the Safeguarding of Industries Act of 1925, and the Finance Act of 1925. The McKenna Duties, which were imposed during the First World War on motorcars; clocks and watches; musical instruments; and cinematographic film were retained.^[103] Under commodities that were early to receive protection included matches, chemicals, scientific equipment, silk, rayon, embroidery, lace, cutlery, gloves, incandescent mantles, paper, pottery, enamelled holloware, and buttons.^[104] The duties on motorcars and rayon have been determined to have expanded output considerably.^[105][106] Amid the Depression, Britain passed the Import Duties Act of 1932, which imposed a general tariff of 10% on most imports and created the Import Duties Advisory Committee (IDAC), which could recommend even higher duties.^[107] Britain's protectionism in the early 1930s was shown by Lloyd and Solomou to have been productivity-enhancing.^[108]

The possessions of the East India Company in India, known as British India, was the centrepiece of the British Empire, and because of an efficient taxation system it paid its own administrative expenses as well as the cost of the large British Indian Army. In terms of trade, India turned only a small profit for British business.^[109] However, transfers to the British government was massive: in 1801 unrequited (unpaid, or paid from Indian-collected revenue) was about 30% of British domestic savings available for capital formation in the United Kingdom.^[110][111]

Most Latin American countries gained independence in the early 19th century, with notable exceptions including Spanish Cuba and Spanish Puerto Rico. Following the achievement of their independence, many of the Latin American countries adopted protectionism. They both feared that any foreign competition would stomp out their newly created state and believed that lack of outside resources would drive domestic production.^[112] The protectionist behavior continued up until and during the World Wars. During World War 2, Latin America had, on average, the highest tariffs in the world.^[113][114]

Argentina, which had been insignificant during the first half of the 19th century, showed an impressive and sustained economic performance from the 1860s up until 1930. A 2018 study describes Argentina as a "super-exporter" during the period 1880–1929, and credits the boom to low trade costs and trade liberalization on one hand and on the other hand to the fact that Argentina "offered a diverse basket of products to the different European and American countries that consumed them". The study concludes "that Argentina took advantage of a multilateral and open economic system."^[115]

Beginning in the 1940s, Juan Perón erected a system of almost complete protectionism against imports, largely cutting off Argentina from the international market. Protectionism created a domestically oriented industry with high production costs, incapable of competing in international markets. At the same time, output of beef and grain, the country's main export goods, stagnated.^[116] The IAPI began shortchanging growers and, when world grain prices dropped in the late 1940s, it stifled agricultural production, exports and business sentiment, in general.^[117] During this period Argentina's economy continued to grow, on average, but more slowly than the world as a whole or than its neighbors, Brazil and Chile. By 1954, while still leading the region, Argentina's GDP per capita had fallen to less than half of that of the United States, from being 80% equivalent before the 1930s.^[118][119]

According to Douglas Irwin, tariffs have historically served three main purposes: generating revenue for the federal government, restricting imports to protect domestic producers, and securing reciprocity through trade agreements that reduce barriers. The history of U.S. trade policy can be divided into three distinct eras, each characterized by the predominance of one goal. From 1790 to 1860, revenue considerations dominated, as import duties accounted for approximately 90% of federal government receipts. From 1861 to 1933, the growing reliance on domestic taxation shifted the focus of tariffs toward protecting domestic industries. From 1934 to 2016, the primary objective of trade policy became the negotiation of trade agreements with other countries. The three eras of U.S. tariff history were separated by two major shocks—the Civil War and the Great Depression—that realigned political power and shifted trade policy objectives.^[120]

Political support by members of Congress often reflects the economic interests of producers rather than consumers, as producers tend to be better organized politically and employ many voting workers. Trade-related interests differ across industries, depending on whether they focus on exports or face import competition. In general, workers in export-oriented sectors favor lower tariffs, while those in import-competing industries support higher tariffs.^[120]

Because congressional representation is geographically based, regional economic interests tend to shape consistent voting patterns over time. For much of U.S. history, the primary division over trade policy has been along the North–South axis. In the early 19th century, a manufacturing corridor developed in the Northeast, including textile production in New England and iron industries in Pennsylvania and Ohio, which often faced import competition. By contrast, the South specialized in agricultural exports such as cotton and tobacco.^[120]

In more recent times, representatives from the Rust Belt—spanning from Upstate New York through the industrial Midwest—have often opposed trade agreements, while those from the South and the West have generally supported them. The regional variation in trade-related interests implies that political parties may adopt opposing positions on trade policy when their electoral bases differ geographically. Each of the three trade policy eras—focused respectively on revenue, restriction, and reciprocity—occurred during periods of political dominance by a single party able to implement its preferred policies.^[120]

Trade policy was a subject of controversy even prior to the independence of the United States. The thirteen North American colonies were subject to the restrictive framework of the Navigation Acts, which directed most colonial trade through Britain. Approximately three-quarters of colonial exports were enumerated goods that had to pass through a British port before being reexported elsewhere, a policy that reduced the prices received by American planters.^[120]

Historians have debated whether British mercantilist policies harmed American colonial interests and fueled the American Revolution. Harper estimated that trade restrictions cost the colonies about 2.3% of their income in 1773, though this excluded benefits of empire, such as defense and lower shipping insurance.^[121] The economic burden of the Navigation Acts fell mostly on the southern colonies, especially tobacco planters in M