Are Protectionist Policies Beneficiak to Business? Essay

10942 Words Feb 11th, 2013 44 Pages
Street−Street: Taking Sides: Clashing Views in Management, Third Edition

IV. Environmental and International Management Issues

18. Are Protectionist © The McGraw−Hill Taking Sides: Clashing Views in Management, Third Edition Policies Beneficial to Companies, 2010 Business?

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ISSUE 18
Are Protectionist Policies Beneficial to Business?
YES: Ha-Joon Chang, from “Protecting the Global Poor,” Prospect Magazine ( July 2007) NO: Robert Krol, from “Trade, Protectionism, and the US Economy: Examining the Evidence” in Trade Briefing Paper No. 28, The Cato Institute (September 16, 2008) ISSUE SUMMARY YES: In support of the idea that protectionist policies help business, Ha-Joon Chang focuses attention on developing industries in poor
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“The Greening of Trade Wars” Forbes, 183(8), 26. Retrieved May 10, 2009, Forbes.com.) Although many believe that protectionism may indeed afford some advantages for domestic business, opponents of protectionism argue that due to the interdependence of global trade and financial systems, these advantages are offset by many negative consequences (William A. Kerr. (2009). “Recession, International Trade and the Fallacies of Composition.” The Estey Centre Journal of International Law and Trade Policy: Special Section on Geographical Indicators, 10(1), 1–11). For instance, an unintended—and unavoidable—consequence of subsidies and tariffs is higher prices for products available to consumers. Protectionist policies also tend to lower the overall quality of goods available and ultimately increase the tax burden on the general public. Writing in the “No” selection for this debate topic, Professor of Economics at California State University Robert Krol describes the findings of various economic studies of international trade. He looks at the effect of trade on employment and wages as well as examining the costs of trade restrictions. From his research, he concludes that “Although international trade forces significant adjustments in an economy, as the evidence shows, the costs of international trade restrictions on the economy outweigh the limited benefits these restrictions bring to import-competing industries.” (p. 10) The opposing view, taken from Prospect Magazine, is

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