Neutrality, protectionism and the international community

Abstract

Foreign economic policy can be explained from two different points of view. Firstly, it constitutes an aspect of foreign policy in general. The international situation imposes certain limitations on a country's foreign economic policy. Secondly, there are certain independent aims of policy, i.e. interests of social groups, articulated by political parties and interest organizations. According to professor Knut Borchardt the historical tendencies towards liberalizing international trade have been dictated mainly by specific international political circumstances, i.e. by non-economic considerations by governments, whereas the protectionist tendencies have enjoyed strong support among organized groups and the public. In his model of the political market, the organized groups (Verbände) represent the demand for protection, while the state represents its supply.