ABSTRACT
From the point of view of the countries of East and Central Europe, the protectionist tendency brought about at least two effects. First, it threatened that the industrialized world would close its markets to agricultural products and raw materials, which were the lion's share of the region's exports. That would be a result of preferences the more advanced countries had given, especially in the 1930s, to their own agricultural producers. A League of Nations report stated that the Great Depression affected the countries of eastern and southeastern Europe particularly acutely. Second, the protectionist tendency confirmed the region's governments' belief that in the given circumstances embracing protectionism was the only rational choice. Import quotas make a useful instrument of foreign trade policy; they allow the fluctuation of domestic prices to be separated from world prices for the equivalents subjected to restrictions, and thus to protect domestic production. Hungarians imposed exchange control in July 1931.
