Protectionism versus Free Trade Market 

           Free trade refers to market model which trade between countries can be done without government restrictions such as taxes, tariff, trade barriers, and other legislation. In theory, free trade must be a net gain for all trading partners.

            Though Free trade has many advantages, there are also many environmentalists, peace advocates, labor organizations, and many political lobbyists who oppose free trade. Some people also claim that it increases the gap between the upper and lower classes.
 
            On the other hands, protectionism refers to economic policy that trade between countries are restricted by high tariffs, restrictive quotas, and variety of government restrictions. The goal of protectionism economic policy is to discourage import to protect domestic business sectors from foreign competition.

Current World Trends :

            Even though there are many countries in the world that still enforce protectionism, the world is heading toward elimination of protectionism. World Trade organization is a good example.

            Ironically, protectionism quota can cause foreign manufactures to earn more profit. The quota restricts supply to exceed the demand. The foreign manufactures usually raise their price as premium products. The voluntary export quotas of Japanese automobile in the United States( 1981 – 1994 ) is one of a very good examples.  The increasing profits jump from 1.68 million U.S. dollars to 1.85 million U.S. dollars in 1984. It has gone up to 2.3 million U.S. dollars in 1985. Japanese automobile industries has earned more profit from restrict quota from protectionism economic policy.

.