global markets. If export sales rose, then the infant industry had succeeded and the government could phase

out protectionism. If export sales did not rise, then the infant industry policy had failed and the government

could phase out protectionism. Either way, the protectionism would be temporary.

Following these rules is easier said than done. Politics often intrudes, both in choosing which industries will

receive the benefits of treatment as “infants” and when to phase out import restrictions and other subsidies.

Also, if the country's government wishes to impose costs on its citizens so that it can provide subsidies to a few

key industries, it has many tools for doing such as direct government payments, loans, targeted tax reductions,
484 20 • Globalization and Protectionism

and government support of research and development of new technologies. In other words, protectionism is

not the only or even the best way to support key industries.

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