The national security argument for protection of domestic industries

Authors

Kwok Hon, Leonard CHENG, Department of Economics, Lingnan UniversityFollow
Gregory W. WHITTEN, Department of Economics, Lingnan UniversityFollow
Jingbo HUA, Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan UniversityFollow

Document Type

Paper Series

Publication Date

7-2019

Abstract

Tracing the origin of the national security argument for protection of domestic industries to Adam Smith, Alexander Hamilton, and Friedrich List, we study its post-GATT applications with reference to Article XXI of the WTO. We compare the use of tariff, production/input subsidy, and government procurement as alternative instruments of protection from the perspective of economic efficiency and study the disapproval of inward FDI to gain insights into the underlying national security concerns. The case studies of a) the US tariffs on aluminum and steel, b) German disapproval of the acquisition of a technology firm Leifeld Metal Spinning by a Chinese firm, and c) US’ all out global effort to cripple China’s telecom equipment giant Huawei are presented for illustration.

Comments

PSEI Working Paper Series No.1

Language

English

Recommended Citation

Cheng, L. K. H., Whitten, G. W., & Hua, J. (2019). The national security argument for protection of domestic industries (PSEI Working Paper Series No.1). Retrieved from Lingnan University website: http://commons.ln.edu.hk/pseiwp/1