National consumers have to pay for these goods as before. The demand decreases and the supply exceeds the demand. The excess will be sold to world market prices or less on the world market. The government pays, as a subsidy to the producers, the difference between this price and the guaranteed floor price. That’s why foreign consumers may buy the same product cheaper than domestic consumers.

Let’s take a look at China’s WAPI policy. Ever since China joined the World Trade Organization in 2001 there was a certain hope that the market of that country would be open to foreign investors and exporters. By the end of 2003 the Chinese government announced that all Wireless Local Area Network (WLAN) equipment sold on Chinese territory have to comply with the Wireless LAN Authentication and Privacy Infrastructure (WAPI) standard. Moreover, for foreign firms to gain access to WAPI technology, they would need to partner with one of twodozen Chinese firms designated by the Chinese government. The policy ostensibly grew out of security concerns regarding Wi-Fi, although it is unclear whether WAPI is more secure (http://www.law.duke.edu/journals/dltr/articles/2005dltr0018.html ) . China’s WAPI policy can be defined as excessive protectionism. It promotes the interests of domestic manufacturers at the expense of their foreign competition. Most economists consider protectionism a bad policy. It is more than obvious that protectionism results in higher pricing but there’s a common argument opposing to the low prices : the loss of jobs. Unrestricted imports (and lower prices for consumers) are often seen as a threat to existing domestic jobs. Except that, a moral argument exists: The illegitimate use of a state by economic interests for their own ends is based upon a preexisting illegitimate power of the state to enrich some persons at the expense of others (http://hackvan.com/pub/stig/articles/cost-of- trade-protectionism.html ).

Trade puts the consumer on first place but protectionism (as you may see from the above example) puts the producer on that place. Protection isn’t in favour of the consumers because protectionism restricts their choice. The domestic products may not be as good as foreign ones but consumers are limited by their finances and their choice, in most cases, is determined by the price of the product. Governments limit consumer’s choice in the name of a greater good, the good of national economy. The actual result is that producers become less responsive to consumers.

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