free trade and protectionism - 1169 Words

Free trade and protectionism Free trade: It takes place between countries when there are no barriers to trade put in place by governments or international organization. Good and services are allowed to move freely between countries Pros Cons Protecting domestic employment Protecting the economy from low cost labour Protecting an infant (sunrise) industry To avoid the risks of over-specialization Strategic reasons To prevent dumping To protect product standards To raise government revenues To correct a balance of payments deficit Arguments against protectionism OTHERS : Red Tape Health and Safety standards Embargoes Nationalistic campaigns Protecting domestic employment industries that are in decline -†¦show more content†¦Any change in the world markets for these products might have serious consequences for the country’s economy. Strategic reasons protected in case they are at times of war (agriculture or steel) protected in order to stay competitive unlikely that they will not be in war ex US they wont go to war and if they do not on our turf they now have nuclear weapons that they can use. To prevent dumping Dumping is the selling by a country of large quantities of a commodity, at a price lower than its production cost in another country. How can you prove dumping. If they can’t then is dumping a valid answer.not going to have access to their notes. WTO May ruin the domestic producers in the developing country. Where countries can prove that their industries have been severely damaged by dumping, their gov. are allowed, to impose anti-dumping measures to reduce damage. Gov. that subsidizes domestic industry may actually support dumping. To protect product standards on imported goods for safety and match the standards of the domestic goods. the cost involved in meeting the product standard - trade barrier particular concern for producers in developed countries. (great cost and getting appropriate approval and documentation to prove that the standards have been met are extremely high). producers in develop. countries at a disadvantage - harder to exploit their comparative advantage successfully. STDF - help developingShow MoreRelatedFree Trade vs Protectionism3918 Words   |  16 PagesOne of the greatest international economic debates of all time has been the issue of free trade versus protectionism. Proponents of free trade believe in opening the global market, with as few restrictions on trade as possible. Proponents of protectionism believe in concentrating on the welfare of the domestic economy by limiting the open-market policy of the United States. However, what effects does this policy have for the international market and the other respective countries in this marketRead MoreProtectionism Vs. Free Trade1869 Words   |  8 PagesProtectionism vs Free Trade The model of a country’s trade regulations, rules, and openness to trade can generally be classified under two ordeals, which are protectionism and free trade. A country that chooses to have a closed barrier of entry for imports and generally refuses to take part in the world trading system is said to be practicing protectionism, which is when a country doesn’t open their economy for the world (Hill, 2015). On the other hand, a country that welcomes foreign firms andRead MoreFree Trade Vs. Protectionism952 Words   |  4 Pagesconcepts of free trade and protectionism, the benefits of each of the different policies and cases in which such policies are used, as well as conflicts generated by those political decisions. 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