Extract G (lines 14–16) states: 'Historical evidence suggests that many high-income nations today initially leveraged selective protectionism to build their industrial base before advocating for global trade liberalization.'
Using the data in the extract and your knowledge of economics, assess the view that emerging and developing economies, such as India and Nigeria, should pursue protectionist policies to achieve economic development.
Protectionist rhetoric has gained traction among emerging markets seeking to accelerate industrialization and protect local employment. Opponents of free trade point to the historical pathway of Western nations, arguing that selective trade barriers are vital to nurturing early-stage domestic firms.
In Nigeria, the government has utilized import bans and high tariffs on products such as rice, cement, and automotive parts to stimulate local production. By raising the cost of foreign competitors, domestic conglomerates have expanded capacity, creating thousands of manufacturing and processing jobs. Similarly, India's raised tariffs on foreign-made electronics and components under its national manufacturing initiatives have compelled global tech giants to set up manufacturing facilities within the country to maintain market access. This tariff-jumping foreign direct investment (FDI) has transferred technology and built skilled local workforces. Historical evidence suggests that many high-income nations today initially leveraged selective protectionism to build their industrial base before advocating for global trade liberalization.
However, these measures have come at a heavy cost to consumers. In Nigeria, import restrictions on staple foods have driven up food inflation, disproportionately affecting low-income households. In India, local manufacturers often face higher costs for imported intermediary components, making their final goods less competitive globally. Critics argue that shielding industries from foreign competition permanently dulls the incentive to innovate. A representative from an international trade body noted: 'High tariff walls isolate emerging industries from global value chains, resulting in lower productivity and allocative inefficiency. True economic development requires integration, not isolation.'
