arguments why nations impose trade restrictions

6
Task 6 Discuss any arguments why nations impose trade restrictions if free trade is the best policy

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arguments why nations impose trade restrictions

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Page 1: arguments why nations impose trade restrictions

Task 6Task 6

Discuss any arguments why nations impose trade restrictions if free trade is the best

policy

Discuss any arguments why nations impose trade restrictions if free trade is the best

policy

Page 2: arguments why nations impose trade restrictions

increase competitiveness of domestic product trade

barriers

• Competition from import goods will decrease.

• Avoid unemployment

• Competition from import goods will decrease.

• Avoid unemployment

Page 3: arguments why nations impose trade restrictions

Retaliation

• Countries may also set tariffs as a retaliation technique if they think that a trading partner has not played by the rules

• Countries may also set tariffs as a retaliation technique if they think that a trading partner has not played by the rules

Page 4: arguments why nations impose trade restrictions

Protecting Domestic Jobs

• The possibility of increased competition from imported goods can threaten domestic industries.

• The unemployment argument often shifts to domestic industries complaining about cheap foreign labour, and how poor working conditions and lack of regulation allow foreign companies to produce goods more cheaply.

• The possibility of increased competition from imported goods can threaten domestic industries.

• The unemployment argument often shifts to domestic industries complaining about cheap foreign labour, and how poor working conditions and lack of regulation allow foreign companies to produce goods more cheaply.

Page 5: arguments why nations impose trade restrictions

Protection of Growing Industries / Infant Industries

• Start-up or small industries in a country may not able to compete against foreign competitors.

• Without trade restrictions, small industries might crushed by competition from abroad.

• Trade barriers help keep industries safe until it can compete on its own.

• Start-up or small industries in a country may not able to compete against foreign competitors.

• Without trade restrictions, small industries might crushed by competition from abroad.

• Trade barriers help keep industries safe until it can compete on its own.

Page 6: arguments why nations impose trade restrictions

Protection Against Other Countries• Trade barriers can also protect a country

against other, predatory nations. "Dumping" occurs when one nation sells large amounts of its product in another country below cost, allowing them to starve out possible competition

• For example, if a lumber-exporting country wishes to establish a monopoly in another nation, they may "dump" their exports on that country until its lumber companies can no longer afford to compete. In these cases, trade barriers in the form of import quotas or tariffs can limit the ability of another country to "dump" its industry, preserving domestic competitors against those with an unfair advantage.

• Trade barriers can also protect a country against other, predatory nations. "Dumping" occurs when one nation sells large amounts of its product in another country below cost, allowing them to starve out possible competition

• For example, if a lumber-exporting country wishes to establish a monopoly in another nation, they may "dump" their exports on that country until its lumber companies can no longer afford to compete. In these cases, trade barriers in the form of import quotas or tariffs can limit the ability of another country to "dump" its industry, preserving domestic competitors against those with an unfair advantage.