Thursday, March 09, 2006


Nations Rebuild Barriers to Deals
Heather Timmons, New York Times

This article discusses the growing tendency of governments to block or place conditions on corporate takeovers. At one point the article quotes an economist who sees the restrictions on takeovers as a form of protectionism. He is quoted as saying that “protectionism remains the major threat to global growth.”

It is worth noting that many forms of protectionism have persisted in the world economy, even as trade deals have removed some barriers, and in some cases have even been extended. For example, the United States has greater protection for doctors at present than it did a decade ago. While protection for doctors and other professionals is almost never discussed in the context of trade, in economic theory, protection that raises the cost of doctors and other professionals to people in the United States (and prevents foreign professionals from being able to sell their services in the United States) is every bit as harmful as protection that restricts imports of clothes or agricultural products.

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