My sumptuous grid by Rachna Shukla

Plenary - Arguments in favour of and against Protectionism

rachna_shukla15 — 2023-10-06 14:41:08 UTC

•On balance is protectionism ever justified ? Justify your arguments.

Entry Ticket - Protectionism

rachna_shukla15 — 2023-10-06 14:44:59 UTC

What do you understand by export dumping and Beggar Thy Neighbor Policy?

Export Dumping occurs when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter's domestic market.

2023-11-13 05:59:14 UTC

Aida

Beggar-thy-neighbor

2023-11-13 06:02:02 UTC

The idea behind beggar-thy-neighbor policies is the protection of the domestic economy by reducing imports and increasing exports. That is usually achieved by encouraging consumption of domestic goods over imports using protectionist policies such as import tariffs or quotas to limit the amount of imports.

Aida

2023-11-13 06:04:00 UTC

Export dumping is when a company or country exports goods at a lower price than the foreign imported market while Beggar-thy-neighbor is the idea of increasing demand for a nation’s exports while reducing the reliance in the imports.

Daisy

Export Dumping & Beggar Thy Neighbour Policy- James

2023-11-13 06:04:17 UTC

Export Dumping: Export dumping occurs when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter's domestic market. The biggest advantage of dumping is the ability to flood a market with product prices that are often considered unfair.

Beggar Thy Neighbour Policy: Refers to economic and trade policies that a country engages in that end up negatively affecting its neighbours and/or trading partners. Protectionist barriers such as tariffs, quotas, and sanctions are all examples of policies that can hurt the economies of other countries.

Arguments For & Against Protectionism- James

2023-11-13 06:46:30 UTC

For:

Protecting infant industries until they can achieve economies of scale
Protecting sunset industries and attempting to reduce the level of structural unemployment
Raising government revenue through tariffs to help with domestic budgets
To protect key/ politically viable industries

Against:

Trade barriers could negatively impact low-income households due to price increases
Risk of prolonged trade wars between countries
Free trade increases FDI which could benefit the country greatly

Protectionism

2023-11-13 06:46:40 UTC

Protectionism has both arguments for and against.

One of the arguments for trade barriers is that its help to protect domestic industries (infant industry), firms in a new industry may be too small to achieve significant economies of scale and could be pressured by established firms in other countries.

Another factor is the increasing tax revenue, that made through creating import tariffs, that therefore may be used and invest in other areas.

Also trade barriers improve the trade balance when there is a large trade deficit, and a country is running low on foreign currency reserves.

Trade barriers also allow to lower the risk of being left without particular products, if the import country decide to limit its export or put sanctions,

However, protectionism may lead to misallocation of resources, therefore lead to loss of allocative and productive efficiency. Other problem is rising cost due to taxes on import goods, that can affect the consumers a special one in relative or absolute poverty, therefore leads to a loss in welfare.

Through the import control domestic firms will gave a chance to increase their monopoly power.

Aida

2023-11-13 06:46:41 UTC

Protectionism protects the domestic production and therefore protects the domestic workforce (jobs), the welfare and it can also improve the trade balance. However, it has many risks, like the risk of retaliation and the misallocation of resources that can lead to inefficiency. So protectionism in the short run can be justified as the country can specialize/improve its trade balance and, in the long run then the country could try free trade as in can benefit the misallocation of resources and loss of allocation of resources.

Daisy