Netherlands, as a small country, is one of the wealthiest and most important economic centers of Europe. This success of Dutch started with the oldest company of the world, Dutch East India, which turned into a global trade empire. Although the country was under the domain of Spanish Empire for decades, victim of many wars, and struggled the tough sailing conditions between Far East and Europe, it never stopped trading. They recognized the importance of collaboration within the country and investors shared their risks which led to emergence of the securities market for the first time in the world.
Starting from Dutch East India, since 17th century, the countrys international trade capacity increased constantly. The country underwent a transformation since the 1970s by privatizing the public sectors and investing in advanced technologies which also created competitive advantage in the global market. Also, as a result of free trade policy and liberal market economy, with slight government intervention, the country has a trade surplus for the last 25 years (3.84 Billion Euros in August, 2020). Its economic expansion is based on foreign trade and investment. With well-developed infrastructure for international trade, Port of Rotterdam is Europe’s largest and worlds 4th port. The transportation business in this port contributes 6.6 billion Euros to Dutch GDP annually and it is a market of over 500 million customers.
As we have seen in Dutch example, free trade targeted policies can improve economic well-being of a country. Can you also give examples of countries or situations where trade restrictions lead to economic growth? Do you think it is sustainable in the long run?
Discuss the effect of protectionism on the economic performance of countries during the Corona pandemic. Do you think countries that try to preserve their national economy with trade barriers will avoid adverse impacts of the pandemic? (In your responses you may refer to historic evidence from other countries in crises periods.)