ABSTRACT
The infant-industry argument is probably the argument most used for protection. It is argued that the free trade theory would be 'static', in the sense that it would take into account the existing comparative advantages and not potential comparative advantages. The infant-industry argument leads one to support artificially any project that is not cost-effective during a certain period. The greater apparent profitability of the protected infant industry necessarily corresponds to a lower profitability of other activities, whether or not they are infant industries. The protectionist argument according to which certain national activities are priority activities and must be protected is in fact very close to the infant-industry argument. Protectionism is often put forward or used as a policy aiming at 'external equilibrium': the elimination of what is called a 'balance of payments deficit'. Customs duties are taxes and they can play the main role of all taxes, namely transferring resources to the public power.
