PROTECTIONISM AS DETERMINANT OF THE DEVELOPMENT OF AUTOMOBILE MANUFACTURING IN GREAT BRITAIN

Abstract

The tariff policy on imports, which was introduced in Great Britain at the beginning of the World War I and was in force for about 60 years, is considered. Based on historical facts and figures, it is substantiated on the example of the automotive industry that the so-called McKenna duties in the long term had an impact on the growth of production, employment, and budget revenues; led to a decrease in prices on the domestic market, a reduction in imports and an increase in exports, promoted foreign investments, the transfer of advanced technologies, and the wider engagement of local potential in business processes. It is demonstrated that the protective duties currently launched by the Indian government to regulate the import of goods, the production of which has been defined by the government as a priority (in particular, electric cars production is concerned), are a reflection of the measures implemented by Great Britain at the beginning of the 20th century. It is emphasized that protective tariffs for these goods in Ukraine are significantly lower. It is shown that the USA also uses import duties for national security purposes.
Taking into account the provisions of the GATT/WTO and the EU–Ukraine Association Agreement, as well as modern examples of their application, it is quite obvious that Ukraine, under the current conditions of external and internal challenges and institutional restrictions, can take advantage of the protectionist policy for the development of industry in the post-war recovery period, based on its right to determine "the most important exceptions for security reasons" in order to ensure the socio-economic and financial stability of the country and the welfare of the nation. In view of this, it is necessary to rethink the current Ukraine’s policy on automobile manufacturing, in particular as regards the foreign trade regulation, and to create a new policy based on effective protectionism theory and effective protection rate calculations, assessment of the current state and prospects of enterprises, the results of a professional discussion on the priorities of the industry: whether it should remain at semi knocked-down kit stage or aim for full-cycle production with a high level of localization.