Evaluate to what extent is protectionism convenient?
Protectionism is a measure employed by the government of a country by placing restrictions on imports to protect their domestic industries from global competition. Governments to benefit their countries, increase their aggregate demand and decrease their debts carry out protectionism. There are various types of methods used to protect a country’s economy such as tariffs, quotas, embargoes, subsidies, etc. As well there are multiple advantages and disadvantages of protectionism that I will further discuss in my essay.
One of the advantages of protectionism is the fact it protects a infant industry. When a local industry is trying to develop, it is likely it will face the challenge of competing with foreign companies or firms. The government will therefore protect the domestic industry by imposing tariffs or quotas on imports, allowing it to increase in size. However infant industries have not shown a successful growth in the long run. We are therefore able to say that it is difficult for the government to identify promising industries to protect. In order to choose an infant industry, it undergoes a selection process that creates opportunity costs. On the other hand by becoming more skilled, infant industries have managed to succeed, they influence the government to impose trade barriers. The problem with barriers is that it creates problems with the international community. Instead a government may be more willing to award subsidies to help infant industries.
The protection of jobs is another reason protectionism should be employed, by restricting imports the government is protecting if not creating jobs. Jobs in MEDC’s are usually better paid, so they will fear losing their jobs. For this reason they may recur to trade unions seeking protection. In the short run this measure is beneficial for domestic producers. However on the long run consumers will be affected due to higher prices (production...