Trade Protectionism in Australia: Its Growth and Dismantling

33 Pages Posted: 20 May 2020

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Date Written: May 2020

Abstract

Protection from import competition was a defining feature of the birth of the Australian federation in 1901. For the next 70 years, the extent of protection grew, and broadened from mainly tariffs to also involving import licencing after World War II. There was a one-off 25% across-the-board cut in tariffs in 1973 and some dismantling of agricultural subsidies, but that was followed by the re-imposition of import quotas for the most-protected manufactured goods. Then a new reformist government began, in the mid-1980s, a long process of dismantling all protection as part of an overall economic reform program that also involved de-regulation, privatization and moving to a flexible exchange rate. The rewards included three decades of faster economic growth and an unprecedented rise in Australians' living standards. This paper provides a history of economic thought on the pros and cons of protectionism for the small, distant, natural resource-rich Australian economy and a survey of the literature on the extent, effects and political economy reasons behind the growth of Australian protection and its eventual dismantling.

Keywords: Import Restrictions, Political economy of trade policy, price-distorting policies, sectoral assistance, tariffs

Suggested Citation

Anderson, Kym, Trade Protectionism in Australia: Its Growth and Dismantling (May 2020). CEPR Discussion Paper No. DP14760, Available at SSRN: https://ssrn.com/abstract=3603992

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

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