Understanding the Pros and Cons of Protectionism

Protectionism is a type of trade policy by which governments attempt to prevent or limit competition from other countries. While it may provide some short-term benefit, particularly in poor or developing nations, unlimited protectionism eventually harms the country’s ability to compete in international trade. This article examines the tools of protectionism, how they are applied in the real world, and the advantages and disadvantages of limiting free trade. Key Takeaways: Protectionism Protectionism is a government-imposed trade policy by which countries attempt to protect their industries and workers from foreign competition. Protectionism is commonly implemented by the imposition of tariffs, quotas on import and exports, product standard, and government subsidies. While it may be of temporary benefit in developing countries, total protectionism typically harms the country’s economy, industries, workers, and consumers. Protectionism Definition Protectionism is a defensive, often politically-motivated, policy intended to shield a country’s businesses, industries, and workers from foreign competition through the imposition of trade barriers such as tariffs and quotas on imported goods and services, along with other government regulations. Protectionism is considered to be the opposite of free trade, which is the total absence of government restrictions on trade.   Historically, strict protectionism has been used mainly by newly developing countries as they build the industries necessary to compete internationally. While this so-called â€Å"infant industry† argument may promise brief, limited protection to the businesses and workers involved, it ultimately harms consumers by increasing the costs of imported essential goods, and workers by reducing trade overall.  Ã‚   Protectionism Methods Traditionally, governments employ four main methods of implementing protectionist policies: import tariffs, import quotas, product standards, and subsidies. Tariffs The most commonly applied protectionist practices, tariffs, also called â€Å"duties,† are taxes charged on specific imported goods. Since tariffs are paid by the importers, the price of imported goods in local markets is increased. The idea of tariffs is to make the imported product less attractive to consumers than the same locally produced product, thus protecting the local business and its workers. One of the most famous tariffs is the Smoot-Hawley Tariff of 1930. Initially intended to protect American farmers from the post-World War II influx of European agricultural imports, the bill eventually approved by Congress added high tariffs on many other imports. When European countries retaliated, the resulting trade war restricted global trade, harming the economies of all countries involved. In the United States, the Smoot-Hawley Tariff was considered an overly-protectionist measure that worsened the severity of the Great Depression. Import Quotas Trade quotas are â€Å"non-tariff† trade barriers that limit the number of a specific product that can be imported over a set period of time. Limiting the supply of a certain imported product, while increasing prices paid by consumers, allows local producers a chance to improve their position in the market by filling the unmet demand. Historically, industries like autos, steel, and consumer electronics have used trade quotas to protect domestic producers from foreign competition. For example, since the early 1980s, the United States has imposed a quota on imported raw sugar and sugar-containing products. Since then, the world price of sugar has averaged from 5 to 13 cents per pound, while the price within the U.S. has ranged from 20 to 24 cents. In contrast to import quotas, â€Å"production quotas† occur when governments limit the supply of a certain product in order to maintain a certain price point for that product. For example, the nations of the Organization of Petroleum Exporting Countries (OPEC) imposes a production quota on crude oil in order to maintain a favorable price for oil in the world market. When the OPEC nations reduce production, U.S. consumers see higher gasoline prices. The most drastic and potentially inflammatory form of import quota, the â€Å"embargo† is a total prohibition against importing a certain product into a country. Historically, embargoes have had drastic impacts on consumers. For example, when OPEC proclaimed an oil embargo against nations it perceived as supporting Israel, the resulting 1973 oil crisis saw the average price of gasoline in the U.S. jump from 38.5 cents per gallon in May 1973 to 55.1 cents in June 1974. Some lawmakers called for nationwide gas rationing and President Richard Nixon asked gasoline stations not to sell gas on Saturday nights or Sundays.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Product Standards Product standards limit imports by imposing minimum safety and quality requirements for certain products. Product standards are typically based on concerns over product safety, material quality, environmental dangers, or improper labeling. For example, French cheese products made with raw, non-pasteurized milk, cannot be imported into the United States until they have been aged at least 60 days. While based on a concern for public health, the delay prevents some specialty French cheeses from being imported, thus providing local producers a better market for their own pasteurized versions. Some product standards apply to both imported and domestically-produced products. For example, the U.S. Food and Drug Administration (FDA) limits the content of mercury in imported and domestically harvested fish sold for human consumption to one part per million. Government Subsidies Subsidies are direct payments or low-interest loans given by governments to local producers to help them compete in the global market. In general, subsidies lower production costs enabling producers to make a profit at lower price levels. For example, U.S. agricultural subsidies help American farmers supplement their income, while helping the government manage the supply of agricultural commodities, and control the cost of American farm products internationally. Additionally, carefully applied subsidies can protect local jobs and help local companies adjust to global market demands and pricing. Protectionism vs. Free Trade Free trade—the opposite of protectionism—is a policy of completely unrestricted trade between countries. Devoid of protectionist restrictions like tariffs or quotas, free trade allows goods to move freely across borders. While both total protectionism and free trade have been tried in the past, the results were usually harmful. As a result, multilateral â€Å"free trade agreements,† or FTAs, such as the North American Free Trade Agreement (NAFTA) and the 160-nation World Trade Organization (WTO) have become common. In FTAs, the participating nations mutually agree on limited protectionist practices tariffs and quotas. Today, economists agree that FTAs has averted many potentially disastrous trade wars. Protectionism Pros and Cons In poor or emerging countries, strict protectionist policies like high tariffs and embargoes on imports can help their new industries grow by protecting them from foreign competition. Protectionist policies also help create new jobs for local workers. Protected by tariffs and quotas, and bolstered by government subsidies, domestic industries are able to hire locally.  However, the effect is typically temporary, actually reducing employment as other countries retaliate by imposing their own protectionist trade barriers. On the negative side, the reality that protectionism hurts the economies of countries that employ it dates back to Adam Smith’s The Wealth of Nations, published in 1776. Eventually, protectionism weakens domestic industries. With no foreign competition, industries see no need for innovation. Their products soon decline in quality, while becoming more expensive than higher quality foreign alternatives. In order to succeed, strict protectionism demands the unrealistic expectation that the protectionist country will be able to produce everything its people need or want. In this sense, protectionism is in direct opposition to the reality that a country’s economy will prosper only when its workers are free to specialize at what they do best rather than trying to make the country self-sufficient. Sources and Further Reading Irwin, Douglas (2017), Peddling Protectionism: Smoot-Hawley and the Great Depression, Princeton University Press.Irwin, Douglas A., Tariffs and Growth in Late Nineteenth-Century America. World Economy. (2001-01-01). ISSN 1467-9701.Hufbauer, Gary C., and Kimberly A. Elliott. Measuring the Costs of Protectionism in the United States. Institute for International Economics, 1994.C. Feenstra, Robert; M. Taylor, Alan. Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century. National Bureau of Economic Research. ISBN: 978-0-226-03075-3Irwin, Douglas A., Free Trade Under Fire, Princeton University Press, 2005.

The Education and Healthcare Gap - 1686 Words

In the worlds of politics, sociology and economics, debates have raged concerning the relative equality or inequality in America. Over the past one hundred years, we have seen a sizable shift toward equality in the legal rights of minorities. However, this legal equality is undermined by a pervasive and broadening socioeconomic inequality, especially in regards to healthcare and education. These issues disproportionately affect minorities. This paper will first touch on two other types of inequality: civic and income. Then it will move into how healthcare and education play an important role in this growing inequality, and finally address the broader implication of socioeconomic inequality and ultimately why these†¦show more content†¦Others argue that inequality is acceptable and, indeed, beneficial. Martin Feldstein argues that, according to the Pareto principle, the gain of some over others is not injurious as long as others are not made worse-off. Instead, he argues that policies should simply focus on reducing poverty. However, in his assessment of how to remedy this issue, he discusses inadequate schooling and work training for those with lower incomes (39). These issues are directly related to problems of inequality in America . specifically, the inequality of opportunity. Income inequality can only be justified if people are given a chance to alter their socioeconomic status. If this shift is inhibited, then inequality rather than creating opportunity destroys it. Although income inequality is an extensive issue that needs to be addressed, education and healthcare provide a more immediate and disquieting problem within America. Here, in the land of opportunity, we have an undeniable and pervasive inequality of opportunity. In an America moving consistently from a manufacturing to a service economy, an education is becoming increasingly pertinent in job attainment and mobility (Waters l.3 s.30). In addition, low-income families cannot afford to place their children in schools that have more resources and are more competitive for colleges. Instead, they are forced to rely on public schools, whichShow MoreRelatedWhat Intervention Activities Would Be The Most Help For Addressing Haiti s Health Problem1432 Words   |  6 Pagesincluded in the Appendix. However, the critical factors targeted in this intervention come down to four focus areas. These priorities are: 1) provision of safe water and sanitation infrastructure, 2) carry out health education among community members, 3) fill critical healthcare gap, and 4) improve and increase epidemiological surveillance In a blog post written by Sokari Ekine, the Nigerian social justice activist explains that cholera is an illness â€Å"exacerbated by heavy rains; poor sanitation;Read MoreGender Inequality Of The Work Force1305 Words   |  6 Pagesoccurs every day. 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Dumping of oil, liquid wastes Free Essays

Of course getting rid of the waste is easy but there are several environmental and human health concerns that are raised as a result of it. Incineration of waste material exhibits different types of toxic air pollutants such as, cadmium, sulfur dioxide, lead, nitrogen oxide, and mercury that are very harmful and contaminate the air (oppapers. com, 2010). We will write a custom essay sample on Dumping of oil, liquid wastes or any similar topic only for you Order Now Acid rains and smog are the by-products of incineration that don’t only pollute the atmosphere but also the lands that are used for agricultural purposes. It’s of no wonder that if the wastes – either solid or liquid – are dumped improperly to any place results in the growth of mosquitoes that carry dengue fever virus, which has a domino effect of malaria and headache. Dengue fever has around 23 strains that worsen the health of the victim for several weeks or even months. On the other hand, sewage contamination worsens the water quality of the rivers or other reservoirs from where the water is supplied to the citizens. Over drinking such water, people became the victims of Diarrhea and other stomach problems; moreover, these diseases further deteriorate the skin of a person and causes skin cancer. Droughts or famines come when the landfills and acid rains make the soil infertile and incapable for the use of agricultural purposes. Not only this, along with human beings, the marine life and other animal species are vulnerable to our reckless waste disposal. Dumping of oil, liquid wastes, and throwing off of several other materials and wastes into the rivers and sea causes the marine life to extinct. As in the case of Chevron, previously known as Texaco, where the company dumped off huge amounts of solid and liquid wastes into the Amazon River which later resulted in the proliferation of several diseases for human beings along with other marine species. Considerable number of people and animals died as a result of it. Answer – 2 Children are more vulnerable to air pollutants due to several reasons. First, there organic and immune system is quite sensitive and vulnerable as compared to that of others; therefore, children have greater tendency of catching the diseases. Secondly, children often spend more time outside there home; for instance, six to seven hours in school and 2 to three hours playing outside with friends. Hence the probability of indulging and interacting with pollution increases, so is with the diseases. Answer – 3 As a Health Educator in this multi-disciplinary team, I would assist the nurse to develop and implement a program for the reduction of exposure of air pollution to the community in the following way. I would provide her with the necessary precautionary equipments such as, masks sun-screen lotions that must be there for the children if air pollution is quite dense. Secondly, I would recommend her not to let the children go out to play or do any other activity in case of bad weather or polluted air conditions. Third, I would assist her in planting as much plants and trees as possible so that they take away carbon dioxide from the atmosphere and release fresh oxygen. Fourth, forbid people to use the gas that burns more and emits toxic and dark black smoke that further worsens the environment. Fifth, minimizing smoking at home or workplace that can otherwise harm children; and finally, making use of air filters to get fresh air and not the polluted one. How to cite Dumping of oil, liquid wastes, Papers

Led Zeppelin The British Rock Band free essay sample

This was just the beginning of their rocks lives. During the early asss this band was at the peak of their success. They became very rich and did crazy things like trash the hotels they stayed in while on tour(dilemma Led Zeppelin: The real monsters of rock). Led Zeppelins fourth album was released in 1971 and had no name to it, but is one the best selling albums ever. It sold over 23 million copies in just the US, even though the band is also very popular and originated in the LIKE (Rockwell. Com Led Zeppelin Biography). In 1 980, something horrible happened to the band and its fans.Their rammer John Bonham was found dead by their tour manager and John Paul Jones. He died from asphyxiation from vomit. The band broke up after his death because they agreed it would not be the same without him(ultraconservative. Com Quote after Paragraph three). We will write a custom essay sample on Led Zeppelin: The British Rock Band or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Unfortunately, he lived the rock star life a little bit too hard. In the dads the band sold their music online like the modern day bands and music artists. In 2007 the band reunited for a concert in London with Bonham son Jason taking his place on the drums. (Rockwell. Com Paragraph eleven). I guess Led Zeppelin will always love the rock star life even at an old ages.