restrICTIONS on international trade,
primarily in the form of non-tariff barriers,
have multiplied rapidly in the 1980s.’ The
Japanese, for example, began restricting
automobile exports to the United States in 1981.
One year later, the U.S. government, as part of
its ongoing intervention in the sugar market,
imposed quotas on sugar imports.
The increasing use of protectionist trade
policies raises national as well as international
issues. As many observers have noted, international
trade restrictions generally have costly
national consequences.
5 The net benefits received
by protected domestic producers (that is,
benefits reduced by lobbying costs) tend to be
outweighed by the losses associated with excessive
production and restricted consumption
of the protected goods. Protectionist trade
policies also cause foreign adjustments in pro