Once again, we have a concern of protectionism rising in international trade. Being marine insurers, our primary interest is in free trade and IUMI has long been a supporter of this.  

Numerous cases from history have taught us that protectionism does not work in the long run. 

When one nation starts to export goods that are competitive in price towards other nations, those nations may take action to protect their domestic industries using custom tariffs or similar mechanisms. In the 19th century the world had already learnt that protectionism does not turn out with favourable results. When governments protected domestic industries from international competition, it resulted in them maintaining weak industries - and maintaining weak industries led to economic stagnation. The world learnt this lesson back in the 19th century when the industrial revolution made the UK highly competitive and other nations raised custom tariffs as a result. These nations soon learnt that protectionism did not strengthen their own economies and that free trade was better in the long run. Eventually they switched their stance to facilitate free trade again. 

But we forget these lessons. 

After the first world war protectionism was on the rise once again and this time it had serious effects. It created the bloc economy which led the world into the second world war.  

Remembering how protectionism heralded a catastrophic disaster, the world came together immediately after the second world war with GATT (General Agreement on Tariffs and Trade) in order to maintain free trade. As we know GATT has now been replaced by the World Trade Organization (WTO).  

A famous philosopher (repeated by a famous politician) said “Those that fail to learn from history are doomed to repeat it.” The world needs to remember that.