Tariffs, import quotas, and regulatory barriers are forms of protectionism that “unfairly” promote domestic goods in foreign markets.…
Usually, import restrictions that protect one sector of a country's economy will result in foreign retaliation against another sector.…
The United States has to set high tariffs and quotas to restrict trade with foreign countries. Tariffs are the tax that one country sets on imported goods and services of another nation. And a quota is the restriction of trade of the amount of goods and services over a fixed period of time to maintain the country’s interest on imported goods. Tariffs and quotas set by the United States have control over the amount of goods that come into the United States to help the economy while continuing to keep healthy trade and relationships with other countries. The United States uses these trade restrictions to find suitable trade opportunities from other countries. And there put in place to safe guard and protect the country’s economic interest. Some…
Throughout the global economy, there are free trade zones and there are restricted zones. Free Trade exists when there is an absence of government imposed barriers in existence between nations in order to restrict trade. When barriers such as those referred to as protectionist policies exist, free trade becomes restricted. Protection is essentially defined as any action by national governments that will give an artificial competitive advantage to domestic producers at the expense of foreign producers. National governments aim to protect their nation from the disadvantages of free trade, through protectionist policies in the form of subsidies, tariffs, local content rules, quotas, export incentives and voluntary export restraints. Reasons for protection include “The Infant Industry argument” which states that some industries in a given country may develop a comparative advantage if only they are sheltered from foreign competition for a while, by means of temporary protection. So if in the future, the infant industries ‘grow up’ and form a comparative advantage, the domestic economy will gain access to a larger demand market, creating an injection into the economy, resulting in increased economic activity and employment. The domestic protection argument states that free trade and increased global competition can result in structural unemployment. Therefore, it has become apparent that infant industries need to be protected, dumping prevented, domestic employment sustained and the defense and self sufficiency of a nation ensured.…
The most common way to protect one’s economy from import competition is to implement a tariff: a tax on imports. Generally speaking, a tariff is any tax or fee collected by a government. Sometimes the term “tariff” is used in a nontrade context, as in railroad tariffs. However, the term is much more commonly used to refer to a tax on imported goods.…
Dumping, is a pricing practice where a firm charges a lower price for exporting goods than it does for the same goods sold domestically. It is said to be the most common form of price discrimination in international trade. Dumping can only occur at places where imperfect competition and where the markets are segmented in a way such that domestic residents cannot easily purchase goods intended for export. It is a subtle measure of protection which comes under the non-tariff barriers and is product and source specific. Antidumping duties were…
In last ten years Japan’s economy is one of the biggest. The nominal GDP of Japan in 2010 was 5458 million dollars – so it was the third one, after USA and China. Of course this was not an easy task for Japan. It’d made a really mysterious level of economic development, and entered the top of wealthiest countries, in spite of nearly totally destructed economy after the World War II. The economic development was generally provided by enlarging amount of international trade, especially exporting of manufactured goods. The secrets which allowed to reach the “Economic Miracle” consist of highly effective economic and trade policies in the presence of impartial civil service.[1]…
There are two basic ways to provide protection to domestic import-competing industries; a tariff or a quota. The choice between one or the other is likely to depend on several different concerns.…
Tariffs are effective and widely used to protect the local industries from foreign competition (Sumner, et. al., 2002). However, this protection comes with an economic cost, where consumers have to pay a higher price to imported goods, which effectively lowering their buying power and leads to inefficient allocation of resources.…
Free trade is a system in which goods, capital and labor flow freely between member countries of an organization. It is a policy through which governments do not use tariffs, subsidies or quotas to interfere with the flow of goods between countries and therefore cause trade discrimination. Even so, it is not always that way. As we will discuss later on, one of the main issues in the free trade topic is the differential treatment regarding tariffs and subsidies that some countries apply to…
Protectionism is the government practice of restricting imports and exports between one country and another. Tariffs are sometimes placed on imports or exports, raising the price for doing such things. In contrast, free trade removes such restrictions. The aims of protectionism are to preserve jobs. By increasing the cost of importing, businesses are encouraged to produce products within the country where the products will be sold. Free trade advocates argue that protectionism leads to higher prices because workers at home are not necessarily willing to work for lower wages.…
Protectionism is defined as the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow fair competition between imports and goods and services produced domestically. Those economic policies get their success back during unfavorable economic times – recessions or crisis.…
Export-Import (EXIM) Policy alternatively known as Trade Policy refers to Policies adopted by a country with reference to exports and imports. Trade Policy can be free trade policy or protective trade policy. A free trade policy is one which does not impose any restriction on the exchange of goods and services between different countries. A free trade policy involves complete absence of tariffs, quotas, exchange restrictions, taxes and subsidies on production, factor use and consumption. Though free trade, theoretically, offers several advantages, in reality, particularly underdeveloped countries were at a disadvantage in such a system of international trade. As a result, in the early 20th century, international economy saw the emergence of protective trade policies. A protective trade policy pursued by a country seeks to maintain a system of trade restrictions with the objective of protecting the domestic economy from the competition of foreign products. Protective trade policy constituted an important plank in the commercial policies of underdeveloped…
Finger, J. M., F. Ng and S. Wangchuk (2002), ‘Antidumping as Safeguard Policy’, in R. M. Stern (ed.), Issues and Options for US-Japan Trade Policies (Ann Arbor, MI: University of Michigan Press). Lindsey, B. (1999), ‘The US Antidumping Law: Rhetoric versus Reality’, CATO Institute Centre for Trade Policy Studies Working Paper No. 7. Mastel, G. (1998), Antidumping Laws and the US Economy (Armonk, NY: M. E. Sharpe). Miranda, J., R. A. Torres and M. Ruiz (1998), ‘The International Use of Antidumping: 1987–1997’, Journal of World Trade, 32, 5, 5–71. Murray, T. (1991), ‘The Administration of the Antidumping Duty Law by the Department of Commerce’, in R. Boltuck and R. E. Litan (eds.), Down in the Dumps (Washington, DC: Brookings Institution). Prusa, T. J. (1992), ‘Why Are So Many Antidumping Petitions Withdrawn?’, Journal of International Economics, 33, 1–2, 1–20. Prusa, T. J. (2000), ‘On the Spread and Impact of Antidumping’, Canadian Journal of Economics, 34, 3, 591–611. Prusa, T. J. and S. Skeath (2002), ‘The Economic and Strategic Motives for Antidumping Filings’, Weltwirtschaftliches Archiv, 138, 3, 389–413. Shin, H. J. (1998), ‘Possible Instances of Predatory Pricing in Recent US Antidumping Cases’, in R. Z. Lawrence (ed.), Brookings Trade Forum 1998 (Washington, DC: Brookings Institution), 81–97. Zanardi, M. (2004), ‘Antidumping: What are the Numbers to Discuss at Doha?’, The World Economy, 27, 3, 403–33.…
Though free trade, theoretically, offers several advantages, in reality, particularly underdeveloped countries were at a disadvantage in such a system of international trade. As a result, in the early 20th century, international economy saw the emergence of protective trade policies. A protective trade policy pursued by a country seeks to maintain a system of trade restrictions with the objective of protecting the domestic economy from the competition of foreign products. Protective trade policy constituted an important plank in the commercial policies of underdeveloped countries during the 50s, 60s, and 70s and to some extent in the 80s.…