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Is Protectionism a Bad Economic Policy?
Protection of companies inside the borders will reduce competition, thus make companies less prepared for an economic recession.
International competition encourages a more efficient allocation of economic resources on the part of firms in the economy. Under protectionist economic policy, companies do not face the same pressure to compete efficiently. As a result, the whole economy suffers.
The EU has seen significant economic growth since integration which allowed companies to compete across national borders. According to one
GDP per capita of the EU would be approximately one-fifth lower today if no integration had taken place since 1950.