| In history, many countries implement different trade policy because of the domestic economic status and interest bias of political groups.England once pursued mercantilism for a long time. However, it was the first country who advocated Free Trade after industrial revolution made it a manufacturing center of the world, Because a lot of cheap industrial goods need a larger market. But England started to reflect the Free Trade Policy which had been prevailed for more than100years from the end of19th century and finally gave it up and turned to Trade Protectionism in1930s.These two major trade policy revolutions due to complicated social and economic reasons had extensive and profound influences. This thesis tries to analyze and compare them comprehensively in terms of reasons and expressions from domestic aspect and abroad.1. Britain from mercantilist to free trade transformationFirst, the reason of this change. From the social environment, the glorious revolution laid the cornerstone of British parliamentary system, the development of the industrial revolution, making the Industrial asset class stronger. The first parliamentary reform in1832, made the industrial assets class getting participating politics right, the Industrial assets resorted their own economic requirements in the political. Theoretically, Adam Smith advocated "laissez-faire", David Ricardo in the19th century developed Adam Smith’s thoughts, making laissez-faire the leading thought, then Bentham’s utilitarianism, supported the theory "laissez-faire" from the individual perspective. The Navigation Acts and The Corn Laws carried out successively, European countries fell into frequent tariff wars, seriously influenced Britain’s foreign trade. With the arrival of the industrial revolution, the British needed overseas market expansion, so, it was urgent to break the bondage of old trade system.Second, on the realization process of free trade. Britain followed a gradual way. Through the transition stage gradually improved, and by1846the Corn Laws completely abolished, the British achieved a truly free trade.Third, influence of British free trade. This paper not only sees the British foreign trade’s promoting role, but also pays attention to its negative side. Such as, the destruction of the British agricultural production. Its damage to other countries’ economic development. 2. Britain from free trade to trade protectionFirst of all, the reasons of the change. From the inside:during the First World War, Britain took national intervention of economic policy, it laid a foundation of the economic policy transformation for the later. The imbalance of British industrial structure and government economic policy adjustment limitations declined British competitiveness in international market. From the outside, the United States and Germany strength surpassed Britain, in the international market competition with Britain, Britain gradually lost world dominance. In the stage of capitalist transition to the monopoly, inside and outside of the impact of the economic crisis situation recounted, the British could only give up free trade policy, turn on the protection of national economic policy.Secondly, in the change of the performance, a shift from the classical liberalism to the new liberal thought; from free trade policy to the state intervention policy.This thesis also summarizes some method for reference from the cases happened during the Great Depression with the hope that it can give us some hints of dealing with today’s trade frictions and the development of world economy. First, we should be clear about the essence and regular pattern of Trade Protectionism and Free Trade. We should give priority to national interest. Second, we should be aware of the fact that different political group will inevitably implement the policy which is favorable to the class interests they represent. Third, we should follow and implement the international practice strictly. But when the overall interests of the state and nation are injured or suffer unfair treatment, we must protect ourselves. The government should improve the ability to coordinate the Free Trade and Trade Protectionism and make development in competition, achieve protection during collaboration. In the end, analyzes and summarizes the trade policy’s developing trend in order to give some alarm in the future. |
